Private equity firm Golden Gate Capital acquires struggling mall shop PacSun
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Beachy teen retailer Pacific Sunwear of California, better known as PacSun, was acquired by San Francisco private equity firm Golden Gate Capital.
Golden Gate Capital said Tuesday it is providing at least $20 million in capital to the troubled mall staple, which filed for Chapter 11 bankruptcy protection in April. PacSun operates 583 stores nationwide and in Puerto Rico.
PacSun is just one of several teen-oriented retailers that have struggled in recent years. Companies such as Aeropostale and Abercrombie & Fitch have been walloped by the booming popularity of fast-fashion retailers such as Zara and H&M.
Surf and skate brands such as PacSun have proved especially vulnerable to shifts in trends among teenagers. Other Southern California surfwear retailers have also suffered: both Quiksilver Inc. and Wet Seal Inc. filed for Chapter 11 bankruptcy protection last year.
Under the restructuring plan, PacSun shed much of its long-term debt. In what’s known as a debt-for-equity swap, Golden Gate Capital converted more than 65% of its loans into equity in the newly private company.
Gary H. Schoenfeld, chief executive of PacSun, said in a statement that the company has emerged from bankruptcy “stronger and more competitive.”
“PacSun is on the right path to success during this period of unprecedented change in the marketplace,” he said Wednesday. “Looking ahead, we plan to continue our brand transformation.”
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