Pacific Sunwear to Focus on Women’s Biz, Footwear Re-Entry for Growth

President and CEO Gary Schoenfield said the company isnt popping any champagne yet after turning in a solid Q1, but is optimistic about recent developments – including a rapid transition from mild Spring temperatures to hot weather across much of the country. Schoenfield said this would help PacSun in its effort to be relevant in the swimwear market, something the retailers plans to use as a springboard to generate more sales from its womens market, which has struggled significantly in recent years.

Schoenfield added that PacSuns recently-debuted Dress Irresponsibly marketing campaign was also expected to help revive the companys female business, noting that the campaign was developed to highlight the companys focus on both branded and proprietary merchandising as well as store execution.

Schoenfield also pointed to PacSuns recent re-entry into the footwear market as a key determinant of future growth prospects. 

Were pleased with the progress weve seen in footwear, he said. As you can imagine, we needed to re-learn the business. When we exited the business (in 2008), that meant not only losing the revenue, but also losing the institutional knowledge.

Schoenfield said footwear was in about half of PacSuns stores right now.
Regarding how the company is handling increasing sourcing costs, Schoenfield said the key was determining which product categories could sustain cost increases without a significant drop in sales. He also said PacSun would keep a close eye on competitors and what promotions were attracting the most attention from the consumer.

When Abercrombie got so aggressive back in July of last year, it was not a move that we anticipated: Schoenfield said. So were certainly trying to factor a lot of that into our thinking – I believe that there will be some price increases that stick. Being thoughtful about promotion is going to be critically important, and delineating between categories is going to be really important as well.