Pacific Sunwear of California doesn't really sell clothes. As every American teenager knows, it sells cool.
Cool it (recent article in Forbes)
By Kelly Barron
>>PACIFIC SUNWEAR of California Chief Executive Greg Weaver and President Timothy Harmon have each logged 100,000 frequent-flier miles. Reviewing a recent itinerary, Harmon, 46, rattles off cities like a train conductor, finishing breathlessly with: "Then the following week we flew... somewhere."
>>It's less wanderlust than survival. Visiting stores and talking to teens is the only way Anaheim, Calif.-based Pacific Sunwear can stay close to its young customer—typically a 15-year-old boy into boardsports, baggy cargo pants and clunky sneakers.
>>Leaning on a carousel of wide-legged blue jeans at the chain's Santa Ana store, Weaver, 44, points to a rack of flannel shirts. Last year the company devoted three racks to the lumberjack plaid tops, he says. This year? One. By questioning his teenage salespeople, Weaver learned the shirts were no longer cool. Out they went. In came more T shirts by hot brands like Birdhouse and Hook-ups.
>>Weaver, who spent 13 years with Jaeger Sportswear Ltd. before joining Pacific Sunwear in 1987, leaves little to chance. The company allocates up to 10% of its roughly $300 million retail merchandising budget to testing new garments and accessories before rolling them out to all stores. Example: experimenting with skateboard sales in just 50 of its 323 shops.
>>Getting it just right isn't easy—there's nothing that loses value faster than fashion merchandise that goes out of fashion. For the moment, Pacific Sunwear is getting it right. Earnings should grow 46%, to $24 million, this year on sales projected to rise 41%, to $321 million. Sales per square foot ($408) are one of the highest among specialty retailers.
>>Pacific Sunwear wasn't always riding so high. In 1995, in the dead of the Minnesota winter, the chain opened a store full of California beachwear—shorts and T shirts—at the Mall of America. "We had kids come in and say, 'This is a cool store. I'll be back when it's summer,'" says Weaver. That's when Weaver, previously chief operating officer, was put in charge. No more dependence on beachwear in midwinter. He added pants, jackets, shoes and a junior section for girls. But dresses and skirts bombed. Weaver admits he should have known better: In focus groups, girls said the only time they wore dresses was to funerals. The junior section was given a tomboyish look to mirror the stores' existing boys' lines. This year, juniors should account for 25% of sales.
>>"We've learned a lot, but we're not complacent," says Weaver. The chain stays in close touch with vendors, holding open house every Wednesday at its headquarters, where suppliers show buyers the latest merchandise. Pacific Sunwear frequently talks with bigger vendors such as Quiksilver about what clothes will be hot.
>>The company has big plans to open 100 stores next year, including a new apparel store called d.e.m.o., aimed at twenty-something urban males who like hip-hop music and streetwise brands like Mecca and FUBU. Still, this isn't an easy way to make a living: Miss a trend or strike a false note with the customers, and you're history.<<
forbes.com |
