PacSun Is Back to $900M in Sales, Focused on Partnerships and a Digital-first Strategy
PacSun is meeting young shoppers where they are today — and that’s online.
The California-based brand, selling teenage and young adult apparel and accessories, has been leaning on a digital-first strategy, from livestream shopping to gaming, while partnering with various creatives on a series of collection drops, tapping rapper A$AP Rocky as its first guest artistic director and accumulating 1.7 million followers on TikTok along the way, Gen Z’s social media platform of choice.
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“From a sales standpoint, we’ve seen really strong growth since 2017,” said PacSun’s co-chief executive officer Alfred Chang, who’s been with the company for 16 years. “Year after year, positive comp growth really driven out of digital. We’ve seen double-digit comp growth these last two years. So, as we look at 2021, over 2019, double-digit comp growth, and we believe that we are leading our competition. And we’ve also seen, from a revenue standpoint, we’re back to a business of over $900 million….We’ve got our sights set on returning to becoming an over billion-dollar business again. Only a few years ago, you know, we were a business that was under $700 million.”
It was during the Great Recession in 2008 that PacSun began shifting its focus.
“We understood that previous management and leadership had really lost its way in terms of authentically caring for brands that mattered to our target consumers,” Chang went on. “And during those years, there was a lot of work to try to rectify that. We understood that we needed to also create more unique brands and collaboration and product with celebrities and influencers, people that were really driving the culture — and that really started in 2013.”
That was the year the company launched Kendall + Kylie, an eponymous line by the Jenner sisters — then teenagers — found exclusively at the retailer.
PacSun’s president Brieane Olson noted the collaboration as a significant move for the retailer.
“One of the largest pivots, when you think about the women’s business, was our partnership with Kendall and Kylie,” said Olson, who joined PacSun a few months after Chang in 2007. “We signed them nine years ago, and at the time, they were not who they are today. And so, arguably, our organization thought we were taking a really big risk, but we knew it was important in order to start to set the stage that we were an L.A. lifestyle brand and that there would be different creators that would come to life, and they would bring a different lens inside of fashion.”
Later that same year they teamed with Kanye West, releasing a capsule collection of Yeezus tour merchandise — again, exclusively at PacSun.
“I think that was another pivotal moment,” Olson continued. “We were working on tour merch with him, and we were trying to do his first collection and bring to life his ideas, which at the time were very far-fetched. And he was trying to work with Gap, and they were telling him no. And he was trying to work with Disney, and they were telling him no. And he was trying to work with Adidas and Nike, but we opened up the doors for him. And in the end, we launched the product, and it did incredibly well. And, you know, then he went and signed a lot of these really large contracts. But I think what PacSun is great at is we make investments with talent and creators, and we’re willing to truly partner to bring those visions to life. Because we know they’re so important to the core.”
Though the relationship with West was short-lived, lasting 12 to 18 months, she said the connection led to relationships — and more partnerships — with creatives in West’s orbit: the late Virgil Abloh, Heron Preston and Jerry Lorenzo of Fear of God.
“That really opened us up to, again, a whole new pipeline of what’s relevant in culture today and who those voices are,” Olson said.
Today, those voices include 20-year-old YouTuber Emma Chamberlain, the face of the brand since 2021; 18-year-old “Euphoria” actress Storm Reid, who dropped her second swimwear collection with PacSun last month, and Circulate’s Corey Populus, curator of Circulate Market — a selection dedicated to Black-owned brands with a charitable element, offering 100 percent of profits from a T-shirt in each collection to a cause; the latest is Clean Up South Central, a nonprofit offering community service in the underserved L.A. region. Others include Miki Guerra of The Magnolia Park, collaborator on PS Reserve — a category devoted to the resell market with brands like Air Jordan, Yeezy, Supreme and Bape — and A$AP Rocky (born Rakim Athelaston Mayers), who, while also holding his title, offers the A$AP Worldwide line.
“To be able to incorporate my relationship with brands close to me and my partnership with PacSun to release select items for certain drops, echoes my original sentiments of creating premium products based off my love for nostalgia and heritage brands that are accessible at different price points,” Rocky told WWD in an exclusive statement. His line is priced between about $35 and $200.
Following apparel releases with Russell Athletic, Eddie Bauer and Vans — sold at PacSun — Rocky has unveiled his latest release: a logo-heavy collection of bomber jackets, sweatpants, long-sleeved T-shirts and hats made in collaboration with Mercedes Benz and Rocky’s creative design agency, AWGE. Available now for online preorder and in PacSun stores in May, it’s the retailer’s fourth project with the music artist, known for his love of fashion — and headline-making relationship with Rihanna.
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Guerra, too, was quick to bring up accessibility at PacSun with the price point offered. PS Reserve, focused on sneakers (Guerra helps authenticate), has been a successful endeavor, selling out every time.
“The units are just huge now, larger than before, and we’re still seeing a ton of success,” Guerra said. “The demand is there.”
But with hundreds of retailers offering similar inventory, what makes PacSun a standout?
The retailer offers variety, trends and reliability, he said: “It has a lot to do with the experience as a consumer on PacSun. It shows up quick, you know it’s going to show up and you know it’s going to look good.”
According to Olson, denim is the retailer’s bestselling category, followed by graphic T-shirts and swim, across both genders (though unisex has been a growing focus for PacSun’s in-house creations). After the U.S. (with 325 stores — and four new shops slated to open this year), Asia and Europe are key markets, Chang said.
The messaging globally for PacSun — owned by Golden Gate Capital — has pulled away from being solely a surf-born brand, initially founded by Jack Hopkins and Tom Moore in 1980 (with roots traced back to a small surf shop in Seal Beach, Calif.). It’s been about showcasing the overall California lifestyle, with a spotlight on L.A., while allowing for each partnership’s messaging to shine through — and giving the collaborators a certain level of freedom to create.
“That’s the coolest part about working with PacSun,” said Populus, who was scouted at a trade show in Long Beach before being invited to sell his brand, Circulate, at the retailer. It was the result of a casual conversation with Richard Cox, PacSun’s vice president of men’s merchandising, that Circulate Market was born.
“I feel like, you know, for my brand’s existence, I’ll always want to work with them because they’ve just kind of been with us from the jump,” Populus continued. “And they’ve grown with us, and even in the beginning, when I feel like things weren’t moving as fast as other people’s brands. They were still there to hold me down and continue giving us orders and continued supporting us even though it wasn’t the hottest thing around at the time, when they first started carrying me.”
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With Reid, PacSun’s messaging has been centered on body positivity.
“It’s really about empowerment for both herself and others and her community,” Olson said.
“My PacSun partnership really came about organically,” Reid said in a statement. “It has always been my goal to remain authentic through anything I do as a person, and as an actor, producer, and now new designer, I knew I wanted to partner with a brand that I was familiar with as a consumer. I’ve always loved bathing suits from a very early age and knew that I would want to create a bathing suit line one day, so when we got the opportunity to partner with PacSun, it was a perfect fit. They have been so collaborative through this partnership and have allowed me to take control of my designs, so working with them has been a dream.”
Moving forward, “It’s about, how do we continue to evolve?” Cox said. “And then, how do we continue to bring newness and surprise the customer? And so, to do that, you have to come up with unique new ideas that may not even exist in your space yet.”
During the early days of the pandemic, after shutting down 330 stores (with some reutilized as fulfillment centers), PacSun accelerated its focus on all things digital, from hosting see now, buy now livestreams to launching an Instagram Live series, PacTalks (featuring the likes of actress Yara Shahidi), addressing issues like mental health as part of its charitable branch, PacCares (with the company pledging to donate up to $250,000 to causes from proceeds received from merchandise).
Now the company is getting in on the metaverse action — for one, reintroducing Chamberlain as an avatar for its second campaign with the influencer, spanning VR, AR and a video game.
“It’s something that I spend a lot of time thinking about in terms of a very thoughtful approach to enter the metaverse not because it’s a buzzword, but because for the past few years we’ve actually been kind of charting our course, alongside our consumer who has led us there, to understand why it’s important and that integration of the identity of the consumer in the virtual and physical worlds,” Olson said.
In October 2021, PacSun became a player in cryptocurrency, accepting Bitcoin via BitPay.
“When you have been with a brand for a long time, you know how important the reinvention is,” Olson added.
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