Pacific Sunwear exits Chapter 11 bankruptcy
In the slump that hit American fashion retail chains recently, the news is positive. Pacific Sunwear, also known as PacSun, has come out on top following a tricky situation.
Last april, the teen apparel chain store was placed under Chapter 11 bankruptcy, which allows those firms facing difficulties to find a solution with creditors or raise new funding.
On September 6, PacSun, which oversees 583 store in the U.S. and Puerto Rico, saw its restructuring plan approved by the federal bankruptcy court in the state of 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. Golden Gate has also agreed to invest $20 million in the company, most likely in form of new debt.
The new organisation is set to continue the transformation of the company. Gary Schoenfeld, CEO of the group, said in a statement that the retailer is now "well positioned to build a bright future."
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