When you think of PacSun, you probably think of the grunge and SoCal style popular among high school students in the early 2000s.
PacSun was -- and largely still is -- known for its laid-back pacific lifestyle apparel and accessories. Shoppers will find denim, graphic tees, swim, surf, and skate wear lining the shelves of the dimly lit and oh-so-cool 350 locations across malls in the U.S. and Puerto Rico.
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PacSun was largely the Pacific coast answer to the east coast's Urban Outfitters (URBN) -). Less outwardly rebellious or counter culture, it exudes the Californian coolness that Hollister tries to capture without wading into preppy territory that competitors like Abercrombie (ANF) -) or American Eagle once dabbled in.
Somewhere along the way, though, PacSun started branching out. In 2012, the retailer launched one of its most high-profile partnerships with Kardashian sisters Kylie and Kendall Jenner. The line, which is still available today, offers low-priced tube tops, lace cropped shirts, and cargo mini skirts. None of which are distinctly SoCal, though perhaps there's an argument to be made that they target a particular high school demo.
Things got worse for the retailer in 2016, when PacSun filed for Chapter 11 bankruptcy and was bought and restructured by Golden Gate Capital, a private equity firm. It then merged with Eddie Bauer -- also owned by Golden Gate -- and began rapidly dwindling its store count from 593 stores at the time of bankruptcy to 400 at the time of the merger.
PacSun Tries its Hand at a Popular Trend
PacSun is no stranger to trying burgeoning fads or trends. In 2020, it began a "gender-free" shop for nonbinary shoppers. And now, it's getting in on the fitness trend.
The concept, called PAC1980, will open at the Mall of America in Bloomington, Minn. in a 1,500 square foot store. So you could say it's a big bet.
The collection kickstarted earlier this year but the retailer has seen "overwhelming success and response," with the activewear, so it will begin rolling out merchandise across its stores.
"We are thrilled to open our first PAC1980 store at the Mall of America,” VP of Design Merchandising Addie Rintel said. “Mall of America is one of our most successful locations, where we have witnessed consistent growth. The smaller PAC1980 footprint within our existing Pacsun stores has been very well-received by our customers, and with its own dedicated store, we look forward to offering an even more expansive look at this category.”
Articles in the line include leggings and yoga pants for around a $20 price point, exercise jackets for $30, and bralettes for $20.99.
It's noteworthy that a majority -- if not all -- of the merchandise is aimed at women and are available in only mostly colors. Perhaps PacSun is aiming its line at a demo of younger women who might ordinarily shop at Gap-owned Athleta or Abercrombie.
"As a brand, we have been working through the strategy of activewear over the past couple of years, of what our aesthetic looks like as compared to the rest of the market, what is differentiating to our product versus everyone else," Rintel said.
So PacSun is trying to differentiate, or at the very least, branch out, from what incumbents in the space are doing. Lululemon (LULU) -) is the darling of the activewear sector, but with yoga pants starting at around $90 per pair, a younger, more price-sensitive audience may look elsewhere for their sets. Abercrombie recently entered the space with Your Personal Best (YPB), certainly aimed at a younger demo with equally as neutral offerings. If you compare PacSun 1980 and YPB, the two storefronts look essentially the same at almost identical price points.
Gap-owned Athleta has a slightly different tack, with a more colorful selection and a price point closer to lululemon. Leggings start at around $80 and include a wider array of designs, prints and patterns.
It's too early to tell whether the space is too crowded or whether PacSun will squeeze a bit of market share out of the activewear space. But based on their target of "a slightly more cleaned up, modern aesthetic with a bit of a retro influence," it's clear that it's targeting mostly Gen Z shoppers, who have a growing appreciation for retro styles.
