San Francisco, CA, United States (AHN) – Teen focused, surfer-dude retailer Pacific Sunwear of California announced Wednesday that it plans to close as many as 200 under-performing stores in the next 14 months as sales continue to slump.
However, things may soon begin to look a bit brighter for the company. In a deal announced along with PacSun’s earnings on Wednesday, Golden Gate Capital will receive the option to buy up to 19.9 percent of PacSun’s shares at a price of $1.75 in exchange for a five-year $60 million secured loan. Golden Gate will also receive two seats on PacSun’s board.
The retailer operates more than 800 stores across the United States. It sells men’s and women’s clothing largely targeted at the surf and skateboard set. Items include jeans, sweatshirts, hoodies and sneakers.
In closing up to 200 stores, PacSun hopes to refocus on its most profitable 550 to 600 locations.
The company has lost money for 12 consecutive quarters. Its latest release for the third quarter of 2011, the company showed a 26 cents per share loss, worse than the expected 20 cents analysts had forecast.
In afternoon trading Thursday, shares of PacSun were up over 17 percent at $1.58, but well off its 52-week high of $6.20.