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Pacific Sunwear files for bankruptcy protection

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Staff writer ▼ | April 7, 2016
Apparel retailer Pacific Sunwear of California filed for Chapter 11 bankruptcy protection, succumbing to mounting losses and intense competition in the industry.
Pacific Sunwear
PacSun   Mounting losses and intense competition in the retail industry
The company's shares fell as much 42 percent to a record low of 5 cents in early morning trading.

Private investment firm Golden Gate, which plans to take PacSun private after it emerges from bankruptcy, will convert more than 65 percent of its debt into equity and provide a minimum of $20 million in additional capital, the company said. Golden Gate had lent PacSun about $60 million in 2011.

The Anaheim, California-based retailer listed assets in the range of $50 million to $100 million, and liabilities of between $100 million and $500 million, according to a court filing.

PacSun listed sportswear maker Nike and mall operator Simon Property Group among its top creditors, to which it owes $5.7 million and $3.8 million, respectively. The company also said it had a debtor-in-possession credit agreement of $100 million with Wells Fargo Bank.

PacSun's top investors include investment firm GI2, which owns a 28.6 percent stake, and Adage Capital Management with a 14.1 percent stake.

PacSun said it would continue to operate all of its 600 stores and does not expect the bankruptcy filing to have an immediate impact on employees.


 

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