It appears that PacSun will live to sell another Volcom T-shirt after a court ruling approved its reorganization plan, according to a story in the Orange County Register.
Under the reorganization plan approved Tuesday by U.S. Bankruptcy Judge Laurie Selber Silverstein in Delaware, PacSun will give all its stock to affiliates of private equity firm Golden Gate Capital, its senior lender. . . In exchange, Golden Gate will reduce the amount it’s owed by PacSun to about $30 million initially from $88 million, Gary Schoenfeld, the retailer’s chief executive officer, said in an interview. Golden Gate has also agreed to invest $20 million in the company, most likely in form of new debt, he said.
And presto, $58 million in debt is gone. Wonder how long it will take Mr. Schoenfeld to blow through this new $20 million? We’re guessing not long. PacSun may have worked wonders on their business, but we doubt any of that is going to bring the kids back to their mall stores (even though some research suggests teen mall traffic is actually increasing).
[Link: OC Register]
