Following early reports that PacSun was preparing to file Chapter 11 bankruptcy, the company has pulled the trigger.
According to Bloomberg, the Cali-based retail chain had around $160 million in liabilities after shares dropped 90 percent within the last 12 months.
PacSun took to its website Thursday morning (April 7) to address the company’s future.
In a letter, written by CEO Gary H. Schoenfeld, PacSun confirmed that it has filed for Chapter 11 protection, while adding that it has reached an agreement with Golden Gate Capital to become a privately owned company. It also states that its board of directors has approved a plan of reorganization to help the retailer gain long-term success.
Furthermore, Schoenfeld says PacSun is not currently planning to close any of its stores, and that business will continue to run as usual. As for customers, the bankruptcy will not affect reward points earned through its loyalty program, gift cards, or return/exchange policy.
“We remain committed to providing our customers with the highest quality products and services. We are proud of our brands and believe we have the most relevant and coveted mix in the industry,” Schoenfeld wrote.
Read the entire letter below.