Pacific Sunwear VP of Investor Relations Gar Jackson clarified the circumstances surrounding Division President Thomas M. Kennedys recent resignation during the Pacific Sunwear presentation at the Wedbush Morgan Securities California Dreamin Management Access Conference.
“The role [Kennedy had] was created when we had multiple directions And this change allows us to enter 2009 with an organization appropriate for a single brand,” said Jackson.
In 2008, Pacific Sunwear closed its demo chain, transitioned its distribution center to Olathe, KS, closed the sale of its Anaheim distribution center and removed sneakers and fashion footwear from its sales floor. This last accomplishment is one Jackson said has had a great impact on the business. The removal of footwear has helped clear the backroom of the store, allowing the stores to stock up on more apparel with minimal staffing on the floor.
Additionally in 2008, the company entered into a five-year $150 million asset-backed credit facility.
The company plans to close 30 to 40 stores over the next three years, said Jackson, “through the regular course of business,” and plans to renew the rest of the leases.
Through the third quarter of 2008, the juniors apparel category grew by $68 million and accounting for 51% of apparel sales in the quarter. Young mens accounted for the balance of apparel sales. Through the quarter, total apparel grew 12%, accounting for 81% of sales. PSUN anticipates its holiday and spring 2009 sales will be driven by colored denim.
Preliminary CapEx for fiscal 2009 is expected to be approximately $30 million versus $80 million to $85 million this year, said the company. Fiscal CapEx for 2009 will include investments in stores, merchandising systems, e-commerce and distribution capabilities.
