California Apparel News

Pacific Sunwear of California Inc. reported on Nov. 16 a same-store-sales decline of 18 percent for the retail chain’s third fiscal quarter, which ended on Oct. 31. The retail chain’s new president and chief executive, Gary H. Schoenfeld, pledged to steer the once-high-flying company back on a profitable course.

Net sales for Anaheim, Calif.–based Pacific Sunwear were $268 million in the third quarter of fiscal 2009, compared with $324 million in net sales for the same quarter during the previous year.

There was a net loss of $10.9 million, or ($0.17) per diluted share, for the third quarter of 2009, compared with a net loss of $3.5 million, or ($0.05) per diluted share, for the same quarter in the previous year.

“Pacific Sunwear lost its way in the past five years,” Schoenfeld told Wall Street analysts during a Nov. 16 conference call. He joined the retailer in July. Schoenfeld said the retailer of surf-and-skate fashion for young men and juniors had ceased providing consumers with a major difference in merchandising.

The 46-year-old Schoenfeld mentioned a few initiatives to direct the company back to its dominant position at the mall during the conference call.

First, Pacific Sunwear will change its merchandising system and institute a program to localize merchandising for its far-flung fleet of 927 stores in 50 states and Puerto Rico. Stores will be able to focus on brands and products popular in the different regions where they are located, he said.

The company also will offer more of the brands that made it a destination for surf-and-skate styles. Schoenfeld pledged to find a better mix for private-label and branded products. However, he declined to state what that percentage would be.

Second, the retailer will begin to focus on footwear again. It may offer up to 45 SKUs of footwear in its young men’s section and a smaller percentage in juniors. Schoenfeld said he believes a stronger footwear section will provide a point of difference—the many vertical retailers it competes against.

This decision represents a big change for the retailer, which last year announced that it was going to get out of the footwear business and closed footwear sections at most of its stores. A few months earlier, it had announced plans to shutter its shoe-based concept store, One Thousand Steps, in October 2007.

Another measure will be to close down some stores. In the next three to five years, the PacSun fleet will be winnowed down to 750 to 800 stores. The retailer is currently in talks with many of its landlords, Schoenfeld said.—Andrew Asch