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ANAHEIM, CA-The Pacific Sunwear clothing chain, which is in the midst of closing one division and shedding another, lost $20 million in the third quarter on charges associated with its restructuring. The company’s $20 million loss worked out to 29 cents per diluted share for the quarter, compared with net income of $9 million and 13 cents per share in the third quarter last year. The loss reflected $31 million in after-tax charges of 45 cents per share associated with store asset impairments and inventory reserves for Pacific Sunwear’s Demo store concept.

PacSun is exploring strategic alternatives for the Demo stores and announced last month that it will close its One Thousand Steps division. In the company’s conference call Tuesday for the third quarter ended Nov. 3, CEO Sally Frame Kasaks commented that she was “very pleased by the progress shown by our core PacSun business during the third quarter.” She said that the company “completed a strong back-to-school season, driven by continued progress in improving our juniors’ business and steady performance from our guys’ business,” citing the positive comp store sales results.

The company’s comp store sales increased by 5% during the quarter, even though total sales dipped to $373.1 million from last year’s $375.4 million in the third quarter. The 5% same store sales increase during the latest quarter, by concept, included a 7.7% increase for PacSun stores and an 18% decreased for Demo stores.

Pacific Sun, which operates its 1,120 stores under the PacSun, Demo and One Thousand Steps concepts, has been conducting a program to “refresh” its stores to boost sales and meet one of the goals established by Kasaks: improving customers’ in-store shopping experience. “Our store refreshing program has played a key role in this effort,” Kasaks said. She noted that the company for this fiscal year will complete 50 refreshes, and that it expects to increase its pace of store refreshings to 75 locations per year going forward.

Improving the shopping experience was one of three key initiatives that Kasaks identified when she came on board at Pacific Sunwear just over a year ago. The others included reconnecting with customers and driving higher comp store sales through the chain’s junior business. The refreshed stores are also helping to achieve those goals, the PacSun CEO said.

The 1,120 Pacific Sunwear locations include 838 PacSun stores, 119 PacSun Outlets, 154 Demo stores and nine One Thousand Steps locations. Kasaks said that there was no news to report on the search for strategic solutions for the Demo concept, but the company expects to close the One Thousand Steps stores by the end of the year.

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