Pacific Sunwear Picks CEO Who Already Knows Company’s Style
Pacific Sunwear of California Inc. sequestered its executives at a resort in San Diego County in the summer of 1995 so the company could nail down a plan that would make the retail chain more attractive to inherently fickle teenage customers.
“We realized that we’d missed some opportunities over the years and we knew we needed to reinvent ourselves,” said Pacific Sunwear President Greg H. Weaver, who on Wednesday added the chief executive officer’s title.
In keeping with that plan, the 198-unit retail chain has moved beyond its traditional T-shirts and shorts, adding footwear departments and boutiques aimed at teenage girls. Pacific Sunwear also has started to build bigger stores and, in a break from the past, added jeans and slacks to its apparel mix.
Analysts described Weaver’s promotion to chief executive on Wednesday as part of a continuing transformation that is being well received by investors.
The company, which hit a 52-week low of $6.25 in October 1995, recently set a new yearly high of $34. Its shares closed up 75 cents at $31.50 on Wednesday in Nasdaq trading, just a week after Pacific Sunwear announced plans for a three-for-two stock split that would increase the number of outstanding shares to more than 8 million, up from nearly 5.4 million.
Weaver, who joined Pacific Sunwear in 1987, has a strong retail operations background, which is what the chain needs as it juggles product mix and expands its presence outside of its California stronghold.
“Greg seems to be the vision guy for them now, and the guy who’s putting the plan into action,” said Joseph Teklits, an analyst with Ladenburg, Thalmann & Co. in New York. Teklits credits Pacific Sunwear with hitting its marks: Back-to-school sales were bolstered by the addition of jeans and slacks, stores with junior women’s boutiques report strong sales, and analysts believe that the shoe departments will also help boost sales and profit.
The retailer reported sharp gains in net income and sales for the second quarter ended Aug. 4. The chain said net income rose to $1.5 million, or 27 cents a share, up from $218,000, or 4 cents a share. Revenue rose by 35% to $34.6 million from $25.7 million.
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Weaver’s addition of the chief executive’s title ends a confusing period at the company that began Jan. 31 when former President and Chief Executive Michael W. Rayden unexpectedly left the company to join Limited Inc. in Columbus, Ohio. At the time, the company said it had hired an executive search firm to replace Rayden, a six-year Pacific Sunwear veteran.
Pacific Sunwear Chairman Julius “Reb” Jensen III on Wednesday said that Weaver, who had been serving as president since March, has demonstrated “great success since assuming operational control. . .it is appropriate that we acknowledge Greg’s leadership and performance with this promotion.”
Pacific Sunwear is sticking with the aggressive expansion plan hammered out during the San Diego retreat. The chain operates in 33 states and plans to open 40 new stores and expand as many as 15 existing locations by the end of 1997. Most of the new stores, measuring 3,000 square feet, will be outside of California. The company also plans to enlarge older stores to accommodate junior women’s apparel and footwear.
Weaver also reports that the chain has successfully juggled the mix of nationally known brands and the company’s profitable private label offerings.
“We need the name brands for the kids who, after all, are very label-driven,” Weaver said. “But we know there’s a limit to how much money they have, so we have increased the amount of private label merchandise.”
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Pacific Sunwear’s decision to stock junior women’s apparel also seems to be working.
“Girls are dressing up in a much more feminine manner,” Weaver said. “It used to be a girl would come into our store dressed in beat-up jeans, a ripped flannel shirt and a baseball hat. It was hard to see what was wrapped up inside all of that.”
Weaver said that the decision to stock jeans--a potentially risky business for a chain that previously only sold shorts--has played an important role in the chain’s rebound.
“One of the biggest lost opportunities we had was not having pants,” Weaver said. “We should have added them three years ago. Our back-to-school numbers, which are very strong, are being driven by pants.”
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Pacific Sunwear at a Glance
Headquarters: Anaheim
Business: Casual clothing, footwear, accessories
Founded: 1982
CEO/President: Greg H. Weaver
Employees: About 1,900
Stores: 198 in 33 states
1995 sales: $113 million
1995 net income: $2.6 million
Source: Pacific Sunwear
