California-based surf and skate-related clothes retail chain Pacific Sunwear (PacSun) yesterday announced that it is closing 175-200 underperforming stores in the next 14 months, due to an uncertain economy that compels buyers to spend less on sports and fashion clothes.
PacSun, which competes with Zumiez Inc, will close 175-200 underperforming stores, among the 819 stores it now operates.
Schoenfeld, CEO of PacSun, said in a statement the closure of the umderperforming stores would enable the company to "focus on our targeted base of 550-600 better performing stores."
PacSun also said that private equity firm Golden Gate Capital has given a $60 million loan in return for a 20-per cent stake and two board seats.
Part of the money will be used by the retailer to fund lease buyout payments on the better performing stores.
PacSun would also receive a five-year, $100 million revolving facility from the US lender Wells Fargo.