With the news that Billabong is virtually bankrupt, and after Pacific Sunwear (PSUN)'s stock fell 20% following 2Q earnings, we started questioning whether Pacific Sun would follow the way of Billabong. However, we are ready to signal the all clear on PSUN and believe the company is in the early innings of a turnaround game.
PSUN is a specialty retailer of apparel with a focus geared towards selling the "California Lifestyle." The company is attempting to shift its target demographic from teens towards young adults that have higher discretionary income. At the end of August, the company operated 638 stores spread across all 50 states and Puerto Rico.
The retailer sells men and women's apparel, as well...