- Angela Gonzalez-Rodriguez |
Private equity investment firm Golden Gate Capital has announced the merge of two of its portfolio companies: Eddie Bauer, LLC and Pacific Sunwear of California, LLC.
From now on, the outdoor brand offering performance outerwear, apparel, footwear, accessories and gear and the speciality retailer offering a cross-section of emerging brands and trending fashion will be part of a new operating company, PSEB Group.
In connection with the establishment of PSEB, Golden Gate will invest additional equity in PSEB to support its growth.
Eddie Bauer and PacSun brands merged under new company: PSEB Group
The resulting group’s retail network will be made of over 700 stores. The company is set to be on track for approximately 1.5 billion dollars in combined total sales in 2018, of which 400 million dollars are expected to come through the e-commerce channel. Both brands are performing well, as Eddie Bauer and PacSun grew same-store sales by 6.5 percent and 5 percent, respectively, in 2017, and year-to-date, same-store sales are up 6 percent at Eddie Bauer and are up 8 percent at PacSun.
Commenting on the news, Josh Olshansky, managing director at Golden Gate Capital, said that “Eddie Bauer and PacSun are powerful brands with differentiated, loyal customer bases. By creating PSEB and investing additional equity, we will accelerate the growth trajectories for both businesses, while preserving the autonomy and discrete cultures of each brand. Both brands have made great progress in the past 24 months and have generated strong performance. Bringing these two brands onto a shared platform will allow us to fuel this momentum and unlock their next stages of growth.”
After the merge, Eddie Bauer and PacSun will continue to operate independently, maintaining their respective unique brand identities, design, merchandising, marketing, e-commerce and retail operations, while benefiting from shared services and enhanced scale.
Eddie Bauer Chief Executive Officer and President Mike Egeck will serve as Chief Executive Officer of PSEB, with oversight of both the Eddie Bauer and PacSun brands.
The transaction is expected to close in the third quarter of 2018, being subject to certain closing conditions.