I’m not even asking as a fan of the company — if your mall doesn’t have a PacSun, is it really a mall at all? The surf-themed apparel store has long been a mainstay of this nation’s shopping centers, but the retail chain has fallen on hard times lately. Yesterday, PacSun filed for Chapter 11 Bankruptcy, but that doesn’t mean the heart and soul of the mall will be surfing off into the sunset just yet.
Word first got out last week, when PacSun CEO Gary Schoenfeld posted a message to customers on the company’s website announcing that the company will file for Chapter 11 bankruptcy. PacSun will become a privately held company, with Golden Gate Capital providing more operating cash and converting much of the company’s debt into equity. The company is reportedly also getting a $100 million loan from Wells Fargo to help keep the business afloat.
Bloomberg reports that the two major financial issues facing the company were $140 million per year spent on renting mall space and $90 million in long-term debt owed at the end of this year. However, in his message, Schoenfeld said, “we intend to operate business as usual with no plans at this time to close any stores.” He also noted that all loyalty programs, gift cards, and the company’s refund and exchange policies would be unaffected by the restructuring of the company. As of now, no store closures also means that there will be no job cuts among the company’s 8,000+ employees.
Granted, this is all a bit rosy — with rent cited as one of the biggest headaches for the company, it seems highly unlikely that PacSun won’t have to close at least some stores in the near future. Whatever happens, it’ll be a rough road ahead as PacSun figures out how to navigate declining mall traffic, the continued surge of online shopping, and, most sadly of all, the decrease in the popularity of surf culture. But, with PacSun still poised to survive at the end of it, at least we can rest easy knowing (some) malls will still be malls.