Pacific Sunwear of California Inc., which has outlets at Ala Moana Center, Pearlridge Center and Windward Mall, has accelerated its bankruptcy plans after negotiating with senior lender Golden Gate Capital and could file for Chapter 11 as early as today, according to people with knowledge of the matter.
Golden Gate, a private equity firm that loaned $60 million to the retailer in 2011, has worked out a deal that will help PacSun avoid liquidation, said the people, who asked not to be identified because the discussions are private. The prearranged bankruptcy agreement involves swapping debt for equity after the retailer emerges from Chapter 11, one of the people said. PacSun also will get financing to continue operating during the restructuring process, according to the person.
Without the deal, PacSun might have faced a total shutdown of the surfwear chain, which has struggled to adapt to shifting consumer tastes. The company has lost money every year since 2008, despite lining up an exclusive clothing line from the Kardashian-Jenner clan. Pacific Sunwear’s stock rose 1.8 cents, or 24.7 percent, to 9.5 cents on Wednesday. Its shares are off 96 percent over the past year.