Pacific Sunwear of California is carrying out a major restructuring that could involve substantial job cuts at the corporate level as the teen retailer seeks to trim $15 million from its current expenses in fiscal 2016.
The announcement followed Tuesday’s quarterly results that saw the Anaheim, California-based company’s net sales slip to $195.6 million for the three months ended August 1, down from $211.7 million in the year-ago period, while comp-store sales decreased 6 percent.
“Key seasonal categories including shorts, swim and sandals were down in both genders and were the primary causes of disappointing results,” Gary Schoenfeld, president and CEO, said in a statement.
Excluding a non-cash gain on derivative liability and assuming a tax benefit of roughly $3.3 million, the adjusted loss for the second quarter was $4.4 million, or $0.06 per diluted share, versus a net loss of $1.8 million and $0.03 per diluted share for the same period last year.
“Shifting trends in consumer spending and shopping patterns necessitate that we further reduce operating expenses, while at the same time strengthening our customer connections through a more seamless omnichannel experience,” Schoenfeld said, noting that the company will significantly reduce its current expenses in the next fiscal year.
He continued, “Approximately one-half of the savings would come through more streamlined execution in our stores and the other half through the restructuring of operations at our corporate headquarters and the reconfiguration of certain positions and departments.”
In connection with its expense reduction initiative, Senior Vice President and Chief Financial Officer Michael Kaplan has left PacSun. He has been replaced by Chris Tedford, formerly the company’s senior director and controller, while Ernie Sibal is now vice president of real estate, construction and strategy.