by Alexandra Steigrad
From WWD Issue 05/25/2011
A slight same-store sales increase wasn’t enough to prevent Pacific Sunwear of California Inc. from recording a wider first-quarter loss, as it continued to struggle with merchandising and marketing obstacles.
The Anaheim, Calif.-based firm also issued second-quarter guidance that fell below Wall Street’s expectations Tuesday.
For the three months ended April 30, PacSun’s net loss grew to $31.5 million, or 48 cents a diluted share, compared with a loss of $31 million, or 47 cents a share, in the year-ago quarter. Excluding the impact of a valuation allowance against deferred tax assets, the loss was 30 cents, 3 cents better than the 33-cent loss expected by analysts surveyed by Yahoo Finance.
Net sales slid 2.4 percent, to $185.8 million from $190.3 million, a year earlier. Comparable-store sales rose 1 percent after declining 8 percent during fiscal 2010. Gross margin for the quarter declined to 19.1 percent of sales versus year-ago margin of 22.3 percent.
Comps in the once-ailing women’s business rose 4 percent, while in the men’s division, quarterly comps fell 3 percent, due partially to weakness in boardshorts.
“I think in many cases two of the toughest parts of any turnaround have to do with talent and culture and reversing what’s by definition a systemic decline in sales,” said president and chief executive officer Gary Schoenfeld on the company call, explaining that the firm has “completely transformed” its women’s merchandising and design business. “We have closed nearly 100 stores, rebuilt critical brand relationships and, perhaps most importantly, we are creating a new culture within PacSun based upon creativity, collaboration, trust and a huge desire to win.”
Despite its optimism about its women’s business, the retailer said it expects a second-quarter loss, excluding special items, of between 22 cents and 29 cents a share, steeper than analysts’ prediction of an 18-cent loss.
Shares closed at $3.16, down 7 cents, or 2.2 percent, Tuesday. Results were disclosed after the trading day ended.
Showing posts with label PacSun. Show all posts
Showing posts with label PacSun. Show all posts
Wednesday, May 25, 2011
Tuesday, April 12, 2011
PacSun Recharges With New Ad Campaign
From WWD.COM
Pacific Sunwear of California Inc. is amplifying its turnaround efforts with advertising might.
The struggling Anaheim, Calif.-based company is taking to television, the Web, mobile phones, print publications and in-store displays with “Dress Irresponsibly,” a new ad campaign spotlighting branded merchandise available at PacSun from the likes of Fox, Hurley, Billabong and Volcom to connect with young customers by raising awareness of its fashion offerings. The campaign marks a transformation of PacSun’s marketing strategy from relying principally on in-store content to an expansive multimedia buy in order to recharge PacSun, which has been dragged down by same-store sales declines (negative 7 percent in the fourth quarter last year, the most recent reported) and a sales per square foot slide from $350 in fiscal year 2007 to $258 in 2010.
The new ad campaign “all starts from the big change that PacSun is going through right now,” said David Charles, a creative director at 72andSunny, the Los Angeles-based design and advertising firm that developed the ad campaign with PacSun. “Since the ceo Gary [Schoenfeld] joined, a lot of great changes have been made to elevate their product, and they finally needed something to elevate their branding as well.”
Charles’ fellow creative director at 72andSunny, Bekah Sirrine, explained the print ads are intended to shift the perception of PacSun from a T-shirts, bikinis and boardshorts resource to a place carrying a wide array of the latest fashions. In order to do so, ad images shot by Elizabeth Weinberg feature a cavalcade of models and action-sports athletes wearing branded apparel from summer and back-to-school collections. The print ads will break in magazines such as Nylon, Teen Vogue and Cosmopolitan starting today.
No fewer than 20 athletes, including surfers Rob Machado and Mitch Crews, skateboarders Levi Brown, Leticia Bufoni and Bucky Lasek, and motocross racer Ryan Dungey, chosen for their style and the brands they are sponsored by, took part in the ad shoot last month in Los Angeles. At the shoot, Machado said he mix-and-matches his outfits from the clothes he gets from Hurley, his sponsor. “I’m always seeing what’s coming out, something new that catches my eye,” he said, adding, while pointing to his get-up, “This is my standard right here: jeans, flip-flops, T-shirt and boardshorts.”
Bertrand Lagros de Langeron, who goes by So Me and has worked on music videos for Kanye West and MGMT, directed the television ads, which use Frank Sinatra’s song “Call Me Irresponsible” as a backdrop. Charles said So Me brings “authenticity” to the ads and the Sinatra song will help PacSun stand out from the “fast-paced indie rock” clutter by “slowing things down, in a sense, musically.” The ads are slated to run on Comedy Central, MTV and ABC Family, among other networks, and PacSun will be a corporate partner with MTV on its Video Music Awards broadcast airing live on Aug. 28.
The digital component of the ad campaign will center around a “Dress Irresponsibly” competition, in which people submit online photos exhibiting their style by clothing themselves with PacSun merchandise, and the person who submits the winning photo gets to style a shoot for Nylon magazine. “Our goal is that it will build a repository of awesome content to be in PacSun’s look book that will continue beyond the campaign,” said Sirrine.
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