Rumors have been flying that PacSun would soon declare bankruptcy, and today on its website it officially announced it had filed Chapter 11 (see letters to customers below). Under the plan, PacSun will continue to operate its business without interruption to customers, vendors, partners and employees. PacSun is a publicly traded company and in its announcement it said the company would be taken private.
PacSun blamed its demise on increased competition and the shift away from shopping in malls to online retailers, pointing out other retailers including American Apparel and Eddie Bauer, which also have recently filed for bankruptcy.
In a letter to its customer posted on its site today, PacSun stated, “During this process, we intend to operate business as usual with no plans at this time to close any stores. All PacSun stores nationwide will remain open on normal schedules and continue to operate in the ordinary course without interruption.”
While PacSun is pushing the business-as-usual message, it’s not clear how the company will handle outstanding invoices for vendors. As well, while the chain is not closing any doors now, Fortune magazine predicted closings would come in the fall.
There was a lot of talk last year about the difficulties streetwear brands were facing and it looks like some of those troubles are continuing into 2016.