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Golden Gate Capital acquires Pacific Sunwear of California

By Angela Gonzalez-Rodriguez

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Management

Five months after filing for Chapter 11 bankruptcy protection, Pacific Sunwear of California has been acquired by Golden Gate Capital, a San Francisco private-equity investment firm.

Golden Gate Capital completed its acquisition of PacSun on Tuesday when the U.S. Bankruptcy Court in Delaware confirmed the restructuring plan, reports the ‘Los Angeles Times’. Golden Gate Capital will be providing at least 20 million dollars in capital to the troubled fashion retailer, which filed for Chapter 11 bankruptcy protection in April.

Meanwhile, the San Francisco based private equity firm converted more than 65 percent of its term-loan debt into PacSun equity, reports ‘LA Times’. Likewise, Wells Fargo also provided a five-year, 100 million dollars revolving line of credit, which is subject to certain conditions.

Restructuring allows PacSun to renegotiate store leases and close unprofitable stores

The restructuring allows PacSun to either renegotiate its store leases or shutter unprofitable stores that have plagued the retailer that sold surfwear and apparel to teens and young adults.

Upon emerging from bankruptcy, PacSun had 583 stores, many less than the 601 shops it had back in April when it requested Chapter 11 protection. Additionally, the fashion retailer said it would be closing 20 stores in the next month.

“Looking ahead, we plan to continue our brand transformation and deliver our customers the most relevant speciality apparel and sneakers along with the best brands and great style that define PacSun,” further explained Gary Schoenfeld, PacSun president and chief executive.

For fiscal 2014, the company reported a 29.4 million dollars loss on 826.8 million dollars in revenues. For fiscal 2015, the company had an 8.5 million dollars loss on $801 million in revenues.

Image: PacSun

Pacific Sunwear of California
PacSun