ANAHEIM, Calif. — PacSun is shaping up to be where the girls are.
Greg Weaver, chairman and chief executive of Pacific Sunwear, told shareholders at the annual meeting here Wednesday that, with men’s wear continuing to lag, the female portion of its business will grow to 45 percent of sales this year from 39 percent in 2001. Men’s wear will constitute the larger slice of the pie, but by a greatly reduced margin.
The teen retailer is, among other actions, focusing significant energy on getting the message out to young women, spending some $10 million on print ads in YM, Seventeen and Teen People. In a departure from years past, the company’s latest campaigns feature more women than men.
“There is a tremendous buzz [in-house] for this campaign,” said Weaver, showing one close-up shot of a fresh-faced girl in a white Roxy tank top.
“Girls are expecting everyday casual apparel with silhouettes that are more feminine,” Weaver said, noting more than 50 percent of the girls’ business comes from the retailer’s only private label brand, Tilt. Popular branded apparel for this market includes Roxy, Billabong and Hurley. Drivers in the men’s business are Quiksilver, Billabong and Hurley as well as Fox, Globe and Dickies.
Weaver told shareholders of “a need to raise the bar on this organization.” Last year “was the worst in many years,” he said, with profits falling 24 percent to $30.1 million as sales reached $685 million.
PacSun’s store expansion is expected to slow this year. There are currently 758 units under the PacSun, PacSun outlets and Demo banners, and the overall number is expected to grow 15 percent this year, less than half the 31 percent expansion pace of last year. Total stores are expected to reach 793 by year’s end, with PacSun adding 58 new stores, Demo adding 10 doors and the outlets adding seven stores.
Although Demo’s same-store sales dropped 3.7 percent in the first quarter ended May 4, Weaver said there is “a large opportunity” for the hip-hop oriented chain featuring brands such as J.Lo for women and Sean John for men. The Demo chain, currently 105 units, is expected to double in size, reaching some 200 doors by the end of 2005.
“The urban brands have their biggest distribution in department stores so this represents a big opportunity in the specialty store [category],” said Weaver.
Revenues overall are projected to reach $800 million in 2002.
Weaver did not specify a net income goal but called for an improvement in production in all divisions, stores to remain differentiated and brand-diverse and a general improvement in sales per square foot.
As reported, net income for the first quarter ended May 4 was $3.3 million compared to $980,000 in 2001. However, profits were lower with the exclusion of a one-time charge. Sales for the first quarter were $161.7 million, an increase of 17.4 percent over year-ago results, as same-store increased 0.6 percent on a 1.2 percent increase at PacSun.”