Pacific Sunwear to close Anaheim DC, urban fashion outlets
Pacific Sunwear of California Inc. is set to close its Anaheim distribution center by April and consolidate the firm's distribution through its Olathe, Kan., warehouse.
The move, capping a tumultuous year for the retailer, was announced in a Friday release from the firm's head offices in Anaheim.
“In analyzing our operations, it became clear that we can better leverage our existing capacity at our Olathe distribution center to improve the efficiency of our supply chain, better service our stores and reduce certain costs,” said Sally Frame Kasaks, Pacific Sunwear chairwoman and chief executive officer.
The $1.4 billion-a-year firm, which started as a surfboard shop in Orange County's Newport Beach in 1980, expects the closure to cost $3 million in pre-tax charges during the next two quarters.
Citing a need to focus on its core business, Pacific Sunwear also plans to close its 154 urban fashion d.e.m.o. stores, a move that is expected cost $35 million to $50 million in pre-tax charges. The closures, which should be completed by the beginning of May, follow on the firm's May 2007 closure of 74 underperforming retail outlets. The firm currently operates 1,121 stores in 50 states and Puerto Rico.
Home to labels such as Billabong and Quicksilver, the firm reported lackluster sales in 2007, and the firm's NASDAQ stock price has fallen from a 2007 high of just over $23 per share to a Friday close of just under $12.50.
In June, Pacific Sunwear went through a minor restructuring at the executive level, kicked off by the departure of the firm's chief operating officer.
Following the departure, the firm eliminated the COO position, describing the move as part of an effort to streamline operations and create greater accountability at the senior management level.
At the same time the company said Pacific Sunwear's distribution center and global logistics/trade compliance departments would shift to the control of the firm's CFO, while the information services, real estate and construction departments would thereafter report directly to Kasaks.
