Teen apparel retailer exits bankruptcy; gets new owner

Pacific Sunwear of California Inc. has emerged from Chapter 11 bankruptcy intact but with a new owner.



The chain’s reorganization plan was approved by the U.S. Bankruptcy Court of Delaware on Sept. 6. Under the plan, the chain gives all its stock to affiliates of private equity firm Golden Gate Capital, its senior lender.



“We thank Golden Gate Capital for their partnership, which enabled PacSun to navigate the restructuring process in only five months, and we look forward to continuing our strong working relationship as we embark on our next chapter,” said Gary H. Schoenfeld, PacSun president and CEO. “We are very pleased to have had Golden Gate Capital's full support in ensuring that all branded partners – both large and small – are to be paid in full as part of our plan.”



As part of the deal, Golden Gate will reduce the amount it is owed by PacSun to about $30 million initially from $88 million, Bloomberg reported. Golden Gate has also agreed to provide a minimum of $20 million in additional capital to the reorganized company to support PacSun’s long-term growth objectives.



“PacSun offers consumers the most compelling and desirable mix of brands celebrating the California lifestyle,” said Josh Olshansky, managing director at Golden Gate Capital. “Now, with a strengthened balance sheet, reduced long-term debt and reduced annual occupancy costs, the company is well- positioned to build a stronger future and achieve long-term success.”



PacSun filed for bankruptcy protection in April. At the time it had 593 stores. It has since closed about 10 locations and negotiated better rent deals for its stores with mall landlords. As of Sept. 7, 2016, the chain operates 583 stores in all 50 states and Puerto Rico.