Another teen retailer has received a reprieve from doom.
Pacific Sunwear, the California-inspired chain better known as PacSun, emerged from Chapter 11 Wednesday with a new owner, San Francisco-based private investment firm Golden Gate Capital.
“We thank Golden Gate Capital for their partnership, which enabled PacSun to navigate the restructuring process in only five months, and we look forward to continuing our strong working relationship as we embark on our next chapter,” PacSun CEO Gary Schoenfeld said. “For more than 20 years, PacSun has been the largest retail partner for many of our industry’s most dynamic emerging brands, and we are very pleased to have had Golden Gate Capital’s full support in ensuring that all branded partners—both large and small—are to be paid in full as part of our plan.”
Following its Chapter 11 filing in April, PacSun reduced its annual occupancy costs and long-term debt, and built up its capital structure. Golden Gate has turned more than 65 percent of the retailer’s long-term debt into equity and granted $20 million in capital to the once-troubled chain. Wells Fargo also provided financial assistance for PacSun’s growth objectives with a five-year $100 million revolving line of credit.
“Now, with a strengthened balance sheet, reduced long-term debt and reduced annual occupancy costs, the company is well-positioned to build a stronger future and achieve long-term success,” Golden Gate’s managing director, Josh Olshansky, said. “We look forward to continuing to partner with PacSun and its experienced management team as the company executes its strategic plan, enhances its omni-channel customer experience and pursues growth opportunities.”