Fashion Briefing: From mall brand to cultural hub: How Pacsun is beating the odds

This week, a look at mall stores’ potential to win with Gen Z.

In May, GQ dubbed A$AP Rocky “rap’s foremost fashion darling” and “one of music’s most advanced tastemakers.” Less than eight weeks later, 40-year-old mall brand Pacsun announced that the rapper had signed on to be its artistic director for an 18-month stint.

“We spent over a decade building credibility and strong relationships with the experts within culture, whether that’s within music or product,” said Alfred Chang, co-CEO of Pacsun. “And throughout those 10 years, we’ve had a lot of strong moments building to what [we’re doing] now.”

In short, Pacsun has worked for it — and it shows no signs of slowing down.

This year alone, along with inking the Rocky deal, Pacsun launched sneaker resale, upped its TikTok following by 1 million followers, and rolled out collaborations with mega-influencers Emma Chamberlain, Jules LeBlanc and Storm Reid. By September, it will also introduce livestream shopping, a Roblox game and a sustainable, genderless apparel collection.

Its home base of the mall, where it has 400 stores, is struggling. According to a 2020 report by Coresight Research, 25% of American malls are expected to close by 2025. And few other retailers that came to market near a food court have thrived. But with its focus on remaining “on top of new things,” according to Chang, Pacsun is gunning to remain an exception. It’s increasingly earning the respect of fashion authorities and Gen Z alike — the latter, through a combination of authenticity and collaboration. 

“Pacsun represents the mass version of street and youth culture fashion,” said Dre Hayes, president of Kappa North America, which sells at Pacsun. It’s one of the brand’s top 10 retailers in volume. “It is the place where many pre-teens and teenagers first discover fashion, and it’s very cool to this customer. It fits with our goal of being in the best retailers at every level.”

The company’s had its ups and downs: It filed for bankruptcy in 2016, before being acquired by Golden Gate Capital. Prior, it was best known for selling Cali vibes via skate- and surf-inspired styles by the likes of Billabong and Quiksilver. But in 2020, it generated over $700 million in sales, and it’s seen high double-digit growth year-over-year since 2019.

In early June, Pacsun introduced PS Reserve, a resale platform co-led by Miki Guerra, founder and owner of popular L.A.-based sneaker marketplace The Magnolia Park. Focused on sneaker resale, PS Reserve brings brands including Yeezy, Jordan and Supreme into Pacsun’s inventory. 

Guerra said the partnership made sense, as the retailers share customers. “Tons of [FOG] Essentials walk through our doors,” he said, referring to styles from Pacsun’s long-term collaboration with Jerry Lorenzo’s luxury streetwear brand, Fear of God, launched in late 2015. “We go hand-in-hand.” 

What’s more, Pacsun’s Gen-Z customer is increasingly getting into sneakers, said Guerra, which he owed to the resale boom. “It used to be that [the retailers] that had the [big] sneakers controlled the narrative. Now 13-years-olds are telling me about their footwear P&Ls.” 

Currently, the initiative is being run by a team of four, including Guerra and Richard Cox, Pacsun’s vp of men’s merchandising. At launch, available product sold out “in minutes,” said Brie Olson, president of Pacsun.

Chang said Pacsun doesn’t typically put financial goals around such initiatives, as doing shifts priorities in a way that hurts authenticity. “Your ability to listen to the experts and learn to do it right is almost killed from day one,” he said.

Resale also speaks to Gen Z’s notorious prioritization of individuality and sustainability. Also speaking their language is Pacsun’s Gender Neutral Shop, launched in September. In August, it will launch a collection that’s both gender-free and eco-friendly, called Color Range. On pacsun.com, shoppers can find more information about the brand’s commitments to sustainability, as well as the charitable organizations it supports via its Pac Cares program. 

“When you position yourself authentically — not just with your consumer, but also with the community itself — it really provides you this platform where great brands and great talent start to collaborate with you and opportunities open up,” Chang said. 

Lately, the company’s been focusing on TikTok, gaining 1 million followers already this year, to hit 1.3 million. Olson owed the growth to regularly posting and engaging on the platform, working with creators who align with the company’s values, and maintaining a “relevant, irreverent and funny” brand voice. A video posted this week shows a girl in bed, ignoring her phone. It reads: “My parents trying to contact me about the $500 Pacsun charge on their credit card.” It has nearly 15,000 views. 

Meanwhile, the company’s #GetYourJeansOn hashtag campaign, launched in early July, has driven more than 2 million views. And a post featuring Chamberlain and focused on mental health drove 82 million.

That success is also attracting in-house talent. In January, Jenn Washington joined Pacsun from Gucci to be a director on its 40-person marketing team. “With Pacsun, its customers connect on an emotional level, without having to be in-store,” she said, of the draw. “What [the brand] puts out on platforms is so vivid. There’s [no question] about its ethos.” 

Unexpectedly, Olson said recent engagement on TikTok has proven the Pacsun customers’ continued interest in its stores. Some of the company’s top performing posts are store associates’ “behind-the-scenes” videos of, for example, the unboxing of new shipments.

“We’re where we need to be, in terms of remaining relevant with our customer,” said Chang. “Digital is our priority and drives everything, but the store is not gone. Pacsun does exist in the mall, because for some, that rounds out the [digital] experience or it’s where they spend their afternoons.” 

Though Instagram (2.5 million followers) and Twitter (382,000 followers) continue to be important marketing channels, Olson said, moving forward, Pacsun will focus on more interactive ways to engage the consumer. It’s launching Shopping Live events on its website in early August, and It’s launching a Roblox game in September.

“It’s important to follow the customer through the digital touchpoints, in short periods of time throughout the day,” Olson said.

“As the world evolves and becomes more competitive, we need to be the expert for our customer who [expects us to] understand what’s happening and be cooler than what’s happening at a basic level,” said Chang. 

He added, “We need to be powerfully relevant in a very authentic way — in a way only our talent knows how.”

With collaborators, Pacsun has targeted “authentic, creative” people, said Olson. It linked with Chamberlain (13.4 Instagram followers) for its spring 2021 campaign and Jules LeBlanc (18 million TikTok followers) for pre-fall. On July 1, it launched a swimwear collection with “Euphoria” actor Storm Reid (1.4 million Instagram followers). 

Reid has a multi-year contract with the company, and her swimwear saw “strong initial sell-throughs, according to the brand. Chamberlain’s partnership provided a “significant sales lift” in the company’s women’s and gender-neutral collections in the first and second quarters. The company declined to elaborate. 

Earlier this month, A$AP Rocky released on his social channels part of a new song and a short film while promoting Pacsun’s latest collection, which includes a Rocky x Pacsun collaboration with Vans. Also this month, the partners introduced a capsule collection with Russell Athletic. 

Overall, A$AP Rocky’s responsibilities include overseeing designer collaborations, brand campaigns and in-store activations at the brand’s locations in L.A. and NYC’s SoHo. 

“We’re building a platform for engagement,” said Olson. “It goes far beyond clothing and product. Streetwear, high fashion, music, sports, the arts — all of that influences the product we put out as a lifestyle brand. And the people [we’ve worked with in these fields] have been important to building our community.” 

Olson said Pacsun first “integrated music into the Pacsun lifestyle” when it collaborated with Kanye West on his first Donda apparel collection and tour merch in 2012. That led to forging relationships with streetwear leaders Lorenzo and Virgil Abloh, whose collection for Kid Cudi’s “Mr. Rager Tour” dropped at Pacsun in 2018. 

“The fashion community has really embraced Pacsun, and it started with [the retailer picking up streetwear brand] Been Trill [in 2016],” said Hayes. “It’s become the place to get some of the coolest brands and collaborations. 

“We put energy into having a strong pipeline of initiatives to drive innovation around youth culture,” Olson said. Pacsun’s owned brands make up 50% of its sales.

Pacsun’s target customers are ages 17-24, “technically, or in their hearts,” said Chang. He referenced Piper Sandler’s semi-annual Gen-Z survey from April, calling Pacsun as Gen Z’s third favorite apparel brand, behind Nike and American Eagle.

“We clearly have the mindshare and hearts of our customers, and we have a lot of opportunity to scale that,” he said. It plans to do so by launching new product categories, as it did with footwear and PS Reserve. This year, it also entered wholesale through partnerships with Selfridges, Nordstrom and The End.

Within the month, Pacsun’s website will be re-platformed to offer more speed, both in the performance of the site and in the company’s ability to update it. “We know a lot of new technology is coming,” said Chang. 

While Pacsun is in evolution mode, not everything will change, Olson said. For example, its 9-years-strong Kendall + Kylie Collection — a collaboration with the Jenner sisters — still resonates. 

Olson said she and Chang are already strategizing for the next three years, noting the A$AP Rocky partnership was 18 months in the making. 

According to Guerra, for Pacsun, the sky’s the limit. “Prior to this partnership, Pacsun didn’t sell anything for more than $400 dollars. Now it’s selling Off-White [x Air Jordan] 4s for $1,400 or $1,500, and they’re disappearing. Now the only question is: Where does this customer want to go?”

5 Questions: Foot Locker CMO Jed Berger on winning over sneaker shoppers 

Jed Berger, CMO of Foot Locker, discusses why mall stores still make sense, who works best as a brand collaborator and why rare sneakers aren’t the only styles that fuel demand.

How are you winning sneaker customers, considering the competition in the space?
The sneaker industry connects to so many aspects of culture: sports, music, art, fashion, purpose, technology and more. And the amazing thing is that it’s accessible. There’s incredible product at all price points. So as an industry, every [retailer] has their role, but we all just need to continue to be innovators and storytellers through great product, and we’re going to be OK.

So, how do you go about targeting your marketing efforts?
It’s a blend of art and science, and there is significant work in both. First and foremost, we try to build great ideas into the design of the product that we sell with our amazing community of [brand] partners. And we use our insights and rich data [on our shoppers] to work with our partners to create the product that we think they’ll want. While we very much cater to a youth culture mindset, I would have to emphasize the word “mindset.” Sneakers are a [form of] self-expression for [people] beyond an age[-specific] generation. You can’t really cut a segmentation by age in our world. You [instead] do it by passion points: Some people want to stand out a little bit more, and some people want their footwear to tell a story about what they stand for. [That’s why] there’s a data aspect to it, to make sure we’re sharing the stories with the people they’ll be relevant to. 

Are traditional sneakerheads seeking rare styles your customer, too?
The [sneaker] industry is fueled by demand creation, and that doesn’t always mean a very tiny, limited assortment. We [recently] had a “Space Jam” collaboration with Nike, and we just did this incredible collaboration with Nike celebrating Ken Griffey Jr. Those weren’t tiny projects, but they were rich in storytelling, and they had the ability to be broader and create a wider demand. So it’s not that there’s a sneakerhead mentality, it’s just that there is a love for the product and a love for a rich idea. And I’d say the demand gets bigger and wider, depending on what that idea is — and so does the assortment, for the most part.

Who makes sense as a Foot Locker collaborator?
Some are connected to brands that we sell, but with some of them, we’re bringing them in to develop into their own brands and have their own relationship with our company. A couple that we’ve recently announced include Melody Ehsani, [founder of streetwear brand ME]. We named her the director of our women’s Foot Locker business, and we also launched her own brand within our space. It’s very clear that it belongs in sneaker culture, and the response has been amazing. We believe there’s a gap in product for women who love sneaker culture, and there are a lot of them. And Melody probably best represents that. We’re also working with Don C, who has a sportswear brand called Just Don. You’ll see us developing some work with him within Foot Locker’s walls. Both [collaborators] are synonymous with sneaker culture and even basketball culture. 

Is your customer still shopping at the mall?
The learning and the demand creation is happening via mobile, digital and social. Where the purchase happens is everywhere, in all channels. We see [our] stores in malls as still being really relevant. Plus we have a really successful store format that we call our community [power] stores, where we are opening beautiful, localized stores — in Washington Heights, Philly, Detroit — that have more of an experiential touch to them. They’re really our best foot forward, in every aspect. In the stores, a lot of people still want to touch, feel, try on and [discover]. In the online environment, with sneakers, they’re often going directly to the product that they know they want. There are different behaviors, by channel, but we are completely channel-agnostic at this point.

Reading List

What we’re reading

L.A.’s Melrose Trading Post is the ultimate Gen-Z style hub.

Twitter’s testing new shopping features for businesses.

Resale platforms are increasingly catering to investment-minded consumers.

Inside our coverage

Genderless fashion is on the rise.

Is hiring young models the secret to winning Gen-Z shoppers?

Nasty Gal wants to be both trendy and sustainable. 

Get news and analysis about fashion, beauty and culture delivered to your inbox every morning.