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PacSun Said to be Gearing for Bankruptcy Filing as Early as Next Week

Struggling teen surf-style chain Pacific Sunwear is preparing to file for bankruptcy, Bloomberg reported, citing sources with knowledge of the situation.

Though the unnamed source said timing could change, the Chapter 11 filing could come as early as next week.

Talk of a looming bankruptcy filing started circulating last month when PacSun said it had received a second notice of delisting from Nasdaq for failing to keep its stock price at or above the $1.00 requirement at least once in 30 straight business days.

At publication time, PacSun’s shares were down more than 72 percent to $0.10.

PacSun has posted steady losses since 2008 and reportedly amassed a debt load in the $160 million range. In its most recent quarter ended Oct. 31, net sales were down 3 percent to $205 million and net loss for the period totaled $3.4 million.

The retailer got a $60 million senior secured term loan from an affiliate of San Francisco-based private equity firm Golden Gate Capital, which according to Bloomberg would give it “sway” in a potential bankruptcy.