This week PacSun filed for Chapter 11 bankruptcy protection after being unable to pay loans borrowed in 2011, when the company were facing tough times. Despite the shop having a more positive sales statistic in the last year, the debts of well over $160 million could not be repaid.
PacSun pointed the change in popularity was a result of changes in customer behaviour. They believe a monumental change to online shopping and a hasty decision to open too many stores and brand extensions has led to this financial situation. Analyst and Founder of A-Line Partners, Gabriella Santaniello said in an interview with Business Insider:
“It’s extremely unfortunate, because you could walk by a PacSun store right now and look inside and think, ‘wow! This looks great!’… and scratch your head and not understand what went wrong. I think that they’ve just been unfortunately a victim of fast fashion”.
PacSun currently have 601 stores open in the US but have had popularity online in the U.K after their collaboration with sisters Kendall and Kylie Jenner. It is not certain the exact future of the teenage fashion brand but Brand President and CEO Gary R. Schoenfeld was keen to stress that the restructuring process of the company would not effect customers and employees.
#Love.Peace.PacSun
