1. Allyson Woodward & Mark Abramsky

2. Agenda Quiz Video History Marketing Mix Brand Prism Perceptual Map
PADR
Social Media Analysis
Focus Group
Financials
Current Situation, Issues, and Efforts
Revival Strategy and Recommendations

3. Quiz
Which celebrity promotes Pacsun? A) Mac Miller B) Kendrick Lamar C) Kylie Jenner D) Ariana Grande
How many employees work for Pacsun?
A) 500
B) 1000
C) 5000
D) 10,000
In its prime, Pacsun had
retail locations.
A) >500
B) >1000
C) >2500
D) >5000

4. VIDEO
Do you like any of these?

5. HISTORY
1980:
Founded as a surf shop in Newport Beach, CA by Jack Hopkins and Tom Moore
1997:
Brand acquires a chain called “Good Vibrations” for $9.2 Million
1998:
Reveals launch of second retail concept “D.E.M.O”
2005:
Sales at all time high.
Nearly 1000 stores nationwide.
2008:
Tipping point to failure.
Last D.E.M.O store closes
Brand starts to report losses/ close stores
2011:
Launches first national advertising campaign, “Dress Irresponsibly”
2016:
Files for bankruptcy
1997: For the first time in its history, Pacific Sunwear completed an acquisition, purchasing a 15-unit, young men's and junior chain named Good Vibrations for $9.2 million in September. Similar to Pacific Sunwear, Good Vibrations was a regional mall-based retailer of casual young men's apparel whose annual sales, collected from the company's stores in Florida, amounted to $17 million.
1998: revealed intentions to launch second retail concept whose merchandise would duplicate Pacific Sunwear merchandise to a limited extent. Named "d.e.m.o.," expected to offer, "popular and emerging cross-cultural brands," catering to urban fashion tastes rather than retailing the clothing trends of suburbia. After initial experiments proved positive, Good Vibrations stores were converted to the d.e.m.o. format
2011: The highlight of the campaign included television commercials aired across a variety of networks that featured famous athletes from the brands they work with. Appearances by Rob Machado, Bucky Lasek etc, were significant in helping re-establish the brand among its male audience. Other elements included print media in endemic and fashion publications, and a digital engagement initiative on Facebook titled 'Dress Irresponsibly: Style Challenge.' Through a customized Facebook app fans were encouraged to upload photos of themselves that met weekly style challenges in exchange for a chance to win a styling gig at Nylon in New York City.

6. MARKETING MIX Product Price Place Promotion Giftcards Casual apparel
Footwear
Accessories
Swimwear
Boardshorts
Hoodies
T-shirts
Jeans
Giftcards
Price
Women’s clothing: $5 - $300
Men’s clothing: $5 - $300
Accessories: $5 - $500 (watches)
Giftcards: $5 - $500
Place
Shopping malls
Outlet malls
Suburban areas
Beach towns
Promotion
BOGO 50% Off
Mix and Match 50% Off
10% Off Sitewide
Tees – 2 for $30
Free shipping over $50
Sale on Sale

7. BRAND PRISM What When For Whom Against Casual Apparel Footwear
Accessories
Swimwear
Board-shorts
Hoodies
T-shirts
Jeans
When
Any time of year
High School
The beach
Surfing
Skateboarding
Night out
For Whom
Generation Z
‘It’ kids
Fashionable teens
Bohemians
“Beach bums”
California natives
Teens inspired by the California lifestyle
Against
Baby boomers
Generation X
Generation Y
Professionals
Sophisticates
“Preppies”
Nonconformists
People who don’t like trends
People against consumerism
What
Casual Apparel
Active-wear
Footwear
Accessories
Board-shorts
Hoodies/T-shirts
Jeans
When
Any time of year
High School
The beach
Night out
Outdoor activities
For Whom
California natives
Young guys and girls inspired by the California lifestyle
‘It’ girls and guys
Generation Xers
Against Whom
Professionals
Millennials
Generation X
Generation Y

8. PERCEPTUAL MAP Price Popularity This is the perceptual map.
In the upper right corner, are the more popular, higher priced brands, such as Anthropology, Urban Outfitters, and Zara.
In the lower right corner, are the more popular, lower priced brands, such as American Eagle, Forever 21, and H&M.
In the upper left corner, are the less popular, higher priced brands including PacSun, Zumiez, TopShop, and Nordstrom.
In the lower left corner, are the less popular, lower priced brands including Tilly’s, Aeropostale, and Target.

9. PADR
Prospector
Analyzer
Defender
Reactor

10. SOCIAL MEDIA Likes: 2.5 Million Posts: 15-300 Likes per post
Shares: 0-10
Comments: 0-30 Interaction Ratio: <1%
Followers:500K
Likes: per post
Retweets: 0-20 per post. Interaction Ratio <1%
Followers: 1.8 Mil
Likes: per post
Comments: per post Interaction Ratio: 5-10%
Subscribers: 25k
Views: Generally per post.
Major videos: 500k-3 million views per post

11. “Lame” FOCUS GROUP “Outdated” Temple Focus Group: 40 Students
33 - Unlikely to shop at Pacsun
4 – Neutral to shopping at Pacsun
3 – Are Likely to shop at Pacsun
“Over Priced”
“Outdated”
“Lame”

12. FINANCIALS Lost $10 million in the fourth quarter (2015)
Sales dropped 2.6% for the full year (2015)
Filed for bankruptcy – April 2016
Entered bankruptcy with:
Assets = $50 - $100 million
Liabilities = $100 - $500 million

13. CURRENT SITUATION Exits bankruptcy
September 2016
Debt-for-equity restructuring agreement
Golden Gate Capital
Wells Fargo agreement
CFO, Chris Tedsford, replaced by Ernie Sibal
17 employees leave Anaheim headquarters
CEO, Gary Schoenfeld, resigns (March, 2017)
Under reorganization plan, Pacsun will give all its stock to affiliates of Golden Gate Capital.
In exchange, amount owed by Pacsun will be reduced from $88 million to about $30 million
Golden Gate also agreed to invest $20 million (new debt)
Wells Fargo agreed to provide a 5-year $100 million credit facility once the retailer emerges from bankruptcy. Pacsun will be able to “draw capital as needed to manage seasonal swings in cash flow.”
Chief Financial officer resigns to “pursue other endeavors.”
Sibal has been with Pacsun since 2008 as VP of real estate, construction & strategy.
Employees that left included the VP of inventory management, the Senior Directors of financial planning & marketing, the Senior Merchandise Planner, and the Manager of Human Resources.
Schoenfeld will be replaced in the interim by James Gulmi, who served as CFO of footwear retailer Genesco Inc. from 1996 to 2015.

14. CURRENT ISSUES Red Ocean Strategy Lack of differentiation
Changing consumer motives
Decline in mall traffic – Online Shopping (Amazon)
“Fast Fashion” retailers (Forever 21, H&M)
Retailers that sell activewear
Teens are unfamiliar with the meaning of the brand
Online shopping has driven many well-known storefront & mall-based chaines into Chap. 11 in (Sports Authority, Aeropostale, American Apparel, Quicksilver)
Top female fashion trends in 2016: (Business Insider)
Leggings/Lulu Lemon
Victoria’s Secret
Converse
Nike
Boots
Top males fashion trends in 2016:
Jogger pants
Ralph Lauren
Preppy
Athletic wear
Nike – the biggest apparel retailer in the US is Generation Z’s favorite. 24% of teens consider it the top brand
Teens want to wear clothing that aligns with their values, has a social cause, and represents who they are.

15. CURRENT EFFORTS Refashion itself as edgy streetwear
Renegotiate current leases
BTM to implement & integrate EMV software
Collaboration with Kendall & Kylie Jenner
Campaign for Pacsun Denim starring Luka Sabbat & Lottie Moss
By renegotiating its current leases, Pacsun plans to reduce its current occupancy costs by $140 million.
BTM will provide the design, development, testing, delivery, pilot support & production lifecycle support services for EMV, tokenization, point-to-point encryption & payment settlement integration
EMV will enable the global standard for credit/debit card payments
By achieving EMV compliances across its chain of stores, it will strengthen payment security & protection of its customer’s data.
Sabbat is the ‘it’ kid out there for guys who look up for fashion
Sabbat is representative of what Pacsuns male demographic aspires to look like
Campaign plays on Maslow’s hierarchical need to feel socially accepted.

17. Update brand offerings
STRATEGY
Define brand persona
Update brand offerings
Mobile & Social Media

18. Represent the new “California cool”
BRAND PERSONA
Represent the new “California cool”
Sustainability
Healthy lifestyles
Social movements
Music festivals
Pacific Sunwear was the epitome of California surf/skate cool in the 90’s and early 2000’s.
The brand failed to redefine itself when its target audience grew up and grew out of its clothing.
Iviyva – Teens say that Lulu Lemon’s younger sister brand is appealing to them because wearing the clothes makes them feel apart of a community for active girls.

19. NEW OFFERINGS Update the brand list Feature local artists & designers
Focus on activewear & festivalwear
Outdoor malls vs. indoor malls
Decrease number of stores
Activewear is a top trend among both males and females.
Studies show teens prefer shopping at stores that carry activewear.
Pacsun needs to reconsider the brands it carries. Calvin Klein does not match Pacsun’s brand identity.
The brands Pacsun carries need to stand for something that teens can relate to or support.
As it is widely known that mall traffic in general is at an all time low,
PacSun should relocate its stores from indoor malls to outdoor locations near popular teen hangouts
This would help PacSun increase it’s store traffic.

20. SOCIAL MEDIA Paid ads and posts featuring real teens Cost effective
Created & shared rapidly
Increase reach of campaign
Promote use of hashtags
Store selfie campaign
Sponsor social causes
Instead of going in the direction of featuring ‘it kids’ and models like Kendal and Kylie Jenner;
Pacsun should photograph real people who surf, skate, do yoga, etc. wearing their clothes.
Not only would this be a more cost effective, these photos could be created and shared rapidly on social media,
which would greatly increase the reach of the campaign
It’s also more relatable for teens
Brands like Aerie are already having success with a similar strategy.
Use hashtags on social media posts, and promote the use of PacSun hashtags to customers on social media.
Take a selfie in a PacSun store, and share it on social media with hashtag to win a free gift or discount.
Increases store traffic, and increases sales when customers receive a coupon

21. FLANK ATTACK Attack the competitor’s at their weak points
Sustainability
Social influence
Sponsorships
Advocacy
Internet presence
Support local artists

22. SOURCES
Center Locations and Information for PacSun. (n.d.). Retrieved April 21, 2017, from
Church, S. (2016, September 6). Pacific Sunwear Has ‘Retailer’s Dream’ as Bankruptcy Wraps Up. Retrieved April 4, 2017, from
Dimartino, M. (2016, April 27). PacSun CFO Departs. Retrieved April 21, 2017, from
Knight, T. (2017, March 14). PacSun Names Interim CEO as Gary Schoenfeld Departs Company. Retrieved April 21, 2017, from
Pacific Sunwear of California, Inc. (n.d.). Retrieved April 21, 2017, from
PacSun Seeks to Achieve EMV Compliance. (2017, February 28). Retrieved April 21, 2017, from

23. SOURCES
Schlossberg, M. (2015, October 08). Move over, millennials - here's where the young consumers of Generation Z are spending their money. Retrieved April 21, 2017, from
Schlossberg , M., & Lee, S. (2016, April 26). Here's what the modern American teenager looks like. Retrieved April 21, 2017, from
Schlossberg, M., & Lutz, A. (2016, June 10). The top 50 brands that cool teenage girls love. Retrieved April 21, 2017, from
Tabuchi, H. (2016, April 07). Pacific Sunwear Files for Bankruptcy. Retrieved April 21, 2017, from
Wolf, C. (2016, October 20). PacSun's New Campaign Uses Luka Sabbat to Attract Every Cool Teen™ in Existence. Retrieved April 21, 2017, from