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Long-struggling surfwear chain nearing bankruptcy

April 5, 2016

Pacific Sunwear of California Inc., the long-struggling surfwear chain that operates 11 stores in Indiana, is preparing to file for bankruptcy, according to people with knowledge of the situation.

The Chapter 11 filing could come as soon as next week, said one of the people, who asked not to be identified because the process isn’t public. The situation remains fluid, and the timing could change, the people said.

PacSun has local stores at Castleton Square, Greenwood Park Mall and at the Shops at Perry Crossing in Plainfield.

Other Indiana locations include Edinburgh, Muncie, Fort Wayne and Terre Haute.

PacSun is the latest casualty of sluggish retail spending and shifting consumer tastes, which have pushed chains such as American Apparel Inc. and Quiksilver Inc. into bankruptcy court during the past year. PacSun has recorded losses every year since 2008, and its shares have plunged about 90 percent in the past 12 months.

The Anaheim, California-based company, which operated 613 stores as of December, didn’t immediately respond to a request for comment.

Founded in 1980, PacSun had more than 1,300 stores in all 50 states and a market value of more than $2 billion prior to the Great Recession. Revenue was $826.8 million in fiscal 2015.

An affiliate of private equity firm Golden Gate Capital has provided PacSun with a $60 million senior secured term loan, giving it sway in a potential bankruptcy. San Francisco-based Golden Gate’s consumer and retail portfolio includes California Pizza Kitchen, Eddie Bauer and Payless ShoeSource.

PacSun shares fell as much as 37 percent, to 22 cents each, on Tuesday morning.

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