PacSun 3Q Profits Up 30 Percent
Net income for Pacific Sunwear of California Inc. shot up 30 percent during the third quarter to $31.9 million, Chief Executive Officer Greg Weaver said during a Nov. 8 conference call with retail analysts.
While the call examined reasons for PacSun’s third-quarter success, discussion also concentrated on what will happen within the Anaheim, Calif.–based company after Weaver leaves his position in April 2005.
Weaver said his top priority for his last few months with the company will be to ease the transition of Chief Operating Officer Seth Johnson into his chief executive position. After April 2005, Weaver will probably work two days each week for PacSun as executive chairman, developing new businesses and perhaps making acquisitions for the company, which he expects will manage 1,400 stores by 2007.
“We had many opportunities to do acquisitions in the past, and we’ve had many things presented,” Weaver said. “But we never had the manpower to consider it, so we haven’t been looking at acquisitions.”
Weaver did not mention specific companies to acquire, but he did say that PacSun achieved strong success by managing brands such as Volcom and Hurley International, both of Costa Mesa, Calif., and that the company could look for similar businesses in the teen space. (He did note, however, that the surfwear giant is not interested in vertical companies.)
Weaver also mentioned that because 40 percent of the teen retailer’s business is from non-apparel categories, the company will experiment with developing ways to strengthen and showcase that business.
PacSun will test whether it can develop business in new stores with more than 7,500 square feet of floor space. The first test store will open July 15, 2005, at the Galleria at Tyler in Riverside, Calif.
Weaver and Tim Harmon, president of PacSun, also discussed the company’s Spring fashions and its urban-concept chain store, d.e.m.o. PacSun will sell St. Louis, Mo.–based Apple Bottoms and New York labels Academiks Clothing and Lady Enyce at all d.e.m.o. stores, but the company dropped the Shady Ltd. and J. Lo brands.
Weaver and Harmon predicted that fleece and basic denim will continue to be popular at PacSun and that embroidered back pockets will be emphasized on girls’ jeans.
—Andrew Asch
