Clothing retailer PacSun has filed for bankruptcy protection earlier this month. The company is the latest California teen activewear business that has struggled to adapt to the fast-changing fashion trends.
LA Times reported that the Anaheim apparel company filed for Chapter 11 bankruptcy protection on Apr. 7. Apparently, PacSun has struggled with the favor toward online shopping instead of physical stores.
"Fast fashion is killing these guys," Paula Rosenblum, a Retail Systems Research analyst, said. "If the surf look is not in, you've got to pivot to another brand of styling."
These teen activewear retailers have tried to streamline operations with the help of private equity firms. PacSun has revealed that it plans to reorganize through an agreement with San Francisco private equity firm Golden Gate Capital.
It was also noted that the retailer has no plans to close stores. Moreover, the bankruptcy filing will not have immediate impact on both customers and employees.
"The plan negotiated with Golden Gate Capital and approved by our board of directors places PacSun in a very promising position as we continue the brand and merchandising transformation that our team has worked relentlessly to achieve," PacSun Chief Executive Gary Schoenfeld said in a statement. Quiksilver Inc. and Wet Seal Inc. were among the Orange County retailers affected by the decline in the activewear trend.
"There is a general pattern over the past two to three years of waning interest in surf and skate," Betty Chen, senior analyst with Mizuho Securities, said. "Some of the trend seems to be gravitating toward basketball and athletics, as well as more hip-hop or street fashion."
PacSun's decline may come as a surprise to some especially after Kendall and Kylie Jenner collaborated with the company. MTV reported that Kendall and Kylie Jenner will be releasing another summer collection with the retailer.
The 20-year-old Kendall Jenner took to Twitter to break the news. "So excited to share our newest PacSun Summer Solstice looks with you all on 5/1!" the supermodel tweeted.