PacSun will take a pretax charge for the closures of between $35 million and $50 million for lease terminations, employee severance charges, inventory reserves and agency fees. In the spring, the company closed 74 D.e.m.o. stores that it described as underperforming, and in October announced they would discontinue their footwear chain One Thousand Steps.
Separately, the retailer also said it is closing a distribution center in Anaheim, Calif., relocating the operations to Olathe, Kan. The distribution center will most likely close by April. "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," Sally Frame Kasaks, chairman and chief executive officer, said in a statement.
Shares of the skate and surf retailer plunged 5 percent to close at $12.28 on Friday.
Relocating the distribution operations will cost about $3 million in pretax charges during the next two quarters.