Pacsun enters into pact with Golden Gate Capital

In conjunction with the RSA, a Plan of Reorganisation (Plan) was approved by the company's board of directors, which provides a comprehensive roadmap for the company to continue to execute its strategy and position for long-term success as a privately owned entity by Golden Gate Capital.

To implement the Plan through a Chapter 11 process, Pacific Sunwear filed voluntary petitions to restructure under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.

Under the Plan, Pacific Sunwear will continue to operate its business without interruption to customers, vendors, partners and employees.

Pursuant to the Plan, Golden Gate Capital will be converting more than 65 per cent of its term-loan debt into the equity of the reorganised company and providing a minimum of $20 million in additional capital to the reorganised company upon its emergence from Chapter 11 to support its long-term growth objectives.

Commenting on the agreement, Gary Schoenfeld, president and CEO of Pacific Sunwear stated, “The plan negotiated with Golden Gate Capital and approved by our board of directors places Pacific Sunwear in a very promising position as we continue the brand and merchandising transformation that our team has worked relentlessly to achieve.”

“Golden Gate Capital's deep familiarity with our business, retail expertise, financial strength and industry experience make them an exceptional equity partner for us going forward. Importantly, great brand partnerships will remain paramount to Pacific Sunwear's success, and the Plan provides for all key suppliers to be paid in full following the effective date of the Plan,” he said.

Josh Olshansky, MD of Golden Gate Capital said, “Pacific Sunwear has successfully transitioned beyond its historical base of action sports brands to what we believe is the most relevant and coveted mix of brands celebrating the California lifestyle. We believe in the future of the company, as reflected by our significant injection of new capital into the business.”

“While there is still work to be done, we are supportive of the steps the company and its management team have taken to position Pacific Sunwear for success and growth long after emergence. Notably, the company has delivered positive comparable store sales in 13 of the past 16 quarters. We look forward to working closely with Gary and the Pacific Sunwear team to build a stronger future while continuing to deliver the compelling product assortment and great shopping experience that has long defined Pacific Sunwear to customers,” he added. (MCJ)

Pacific Sunwear of California