Pacific Sunwear is moving toward more fashion and away from bare basics to appeal to young women’s increasingly sophisticated buying habits and better compete in a much more crowded teen market with the likes of Abercrombie & Fitch, American Eagle, Aeropostale and Forever 21.


“We just need to do a much better job of executing girl’s fashion,” said Gary Schoenfeld, CEO for Pacific Sunwear of California in a presentation to the Goldman Sachs Retail Conference.


The chain's turnaround will also hinge in part meeting the needs of its aging customer base without alienating teen customers, said Schoenfeld.


PSUN has done this in part by differentiating in-house brands like Kirra, which is now being aimed at tanks tops and essential Ts for older girls, and Nollie, which is being targeted toward teens.


PSUN has made great strides in strengthening relationships with heritage brands like Hurley, Billabong, DC, Fox and Volcom. It has also added new brands like Maddox, Atwater, Freshjive, Commune, Ruka and WeSC in last 12 to 24 months and is working to draw more emerging brands back into the store. PSUN will experiment more with shop-in-shops in its stores to help promote these brands. 


“Short-term, I'm actually fairly bullish about holiday,” said Schoenfeld. “I think the consumer has clearly demonstrated a spend now, wear now kind of mindset. Having said that, we're still being pretty conservative in terms of our own internal planning.”


Schoenfeld said inflation will impact margins, although not at the 5% rate being widely discussed in the apparel industry. The company is dropping vendors in China and elsewhere that are increasing prices and changing it supply change accordingly.


Still, Schoenfeld said PSUN won’t be undertaking any major investment initiatives, including growth opportunities or a stock buyback program, in the near future.


“We need to turn our business around, and we need it to get back to positive comps, and then begin to look at where there might be appropriate investments in systems or in stores, or what have you,” Schoenfeld said.