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ANAHEIM, CA-Teen-apparel retailer Pacific Sunwear of California is closing 74 stores in its Demo chain, leaving it with about 150 units and a $25-to-$27-million Q4 write down. The hip-hop-themed Demo locations that are closing were hurt by “mall demographics, store layouts and store economics” and led to a pre-tax loss of $9 million, according to a company statement.

Management says that Demo is still a viable concept overall, and the company will test a new prototype of the stores. The retailer will convert about 20 to 25 of its existing units into the new concept by the end of the year.

Pacific Sunwear’s portfolio-wide same-store sales in January fell 7.7% year over year, with Demo units recording a 9.5% drop. The company’s 849 namesake stores posted a 7.3% fall on their own. Product categories that were especially hit hard include men’s footwear and men’s and women’s apparel.

As a result of the sales drop, management has now lowered its fourth-quarter earnings guidance to between 36 cents and 38 cents per share. It had previously forecast Q4 earnings to come in from 45 cents to 50 cents.

Fourth-quarter same-store sales fell 4.3%, 3.4% at Pacific Sunwear and 7.9% at Demo. Total sales came in at $458.2 million, up from $425 million during last year’s fourth quarter.

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