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California company hopes to get through Chapter 11 process

Several previous posts here have mentioned how important it is for businesses to be able to adapt to the times and adjust to the changing tastes and habits of their consumers. Those companies that do not make the correct adjustments may face declining profits, rising debt and stagnant sales. And, as a result, companies in that position may contemplate a bankruptcy filing in an attempt to right the ship.

California-based clothing retailer Pacific Sunwear has apparently slid in this direction, recently filing for Chapter 11 bankruptcy protection. Reports covering this business bankruptcy indicate that Pacific Sunwear has had a string of bad years -- nine years of annual losses, to be exact. The problems for this company appear to be the same as many other consumer retailers are facing -- customers shopping more online, less interest in going to shopping malls for purchases and, for clothing retailers in particular, a change in the fashion tastes of target consumers.

However, for Pacific Sunwear, there is some hope that the company will continue operations. Reports indicate that the company's plans are to go through the Chapter 11 bankruptcy process with the help of a private equity firm. That private firm plans to shift the company from being publicly owned to private owned. Pacific Sunwear reportedly operates 600 stores nationwide, and the current plan is to keep all of them open.

Many companies are able to go through the Chapter 11 process and return to profitability. For Pacific Sunwear, it will take some time, but hopeful the company can adjust its business model and the goods that it sells.

Source:, "Pacific Sunwear files for Chapter 11 bankruptcy," April 8, 2016

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