WEBVTT - PacSun CEO Brianne Olson Talks Company Turnaround

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<v Speaker 1>All right, Tim, I have a question for you. Were

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<v Speaker 1>you a mall rat?

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<v Speaker 2>Yeah, I mean everyone in the nineties was a mall rat.

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<v Speaker 1>It wasn't that much to do in the nineties.

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<v Speaker 2>And then going did you Southern California nineties? Mom, yees skateboarding?

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<v Speaker 1>Did you have a Pukashan necklace?

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<v Speaker 2>For a very brief time? I did, and there might

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<v Speaker 2>be pictures to prove it. Very brief.

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<v Speaker 1>Yeah, all right, we're gonna I'm little side. We don't

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<v Speaker 1>have this. I should Doug gooes outsh grade seventh grade.

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<v Speaker 1>We all make questionable fashion decisions in middle school. I mean, listen,

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<v Speaker 1>they were the thing, and one of the it brands

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<v Speaker 1>when we were in high school, of course, was pac Sun.

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<v Speaker 1>The company's gone through a lot of changes. They filed

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<v Speaker 1>for bankrupty in twenty sixteen, but now it's back, it's rebranded,

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<v Speaker 1>and it's thriving, and it's capitalizing on a couple things,

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<v Speaker 1>including this wave of Millennia nostalgia and new generation of

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<v Speaker 1>shoppers who are more socially aware but no less fashionable

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<v Speaker 1>than we were when we were their age. Pacsun's CEO,

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<v Speaker 1>Brian Olson, joins us now her book co created here

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<v Speaker 1>we go, we get right here talks about the turnaround

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<v Speaker 1>of the company and how much to my joy, she says,

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<v Speaker 1>brick and mortar stores are not dead, they just need

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<v Speaker 1>to reinvent themselves. Thank you so much for coming on.

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<v Speaker 1>You were telling us that the break. You've been at

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<v Speaker 1>a company a long time and in your time I

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<v Speaker 1>think you said seventeen eighteen years. In that time, how

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<v Speaker 1>has the company evolved into what it is now?

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<v Speaker 3>Yeah, I've been at the company almost two decades, and

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<v Speaker 3>when I joined, we were a surf skate legacy retailer.

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<v Speaker 3>And today, after a transformation of almost two decades and

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<v Speaker 3>a real focus on the power of co creation, we

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<v Speaker 3>have successfully moved from being a retailer where Pacsun's brand

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<v Speaker 3>was just on the outside of the store to an

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<v Speaker 3>actual brand that young people today love. And so fifty

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<v Speaker 3>percent of what we sell in a Pacsun's store today

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<v Speaker 3>now carries the pacsun label.

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<v Speaker 2>How does that work in a world where and look,

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<v Speaker 2>I'm going to totally age myself here, right, We're about there.

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<v Speaker 2>You know, when I dropped my kids off at school,

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<v Speaker 2>they're young there, three and seven. But when I drop

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<v Speaker 2>them off at school, I walked by a middle school,

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<v Speaker 2>and at the middle school, these kids literally are dressing

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<v Speaker 2>like we used to dress when we were in middle school.

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<v Speaker 2>It is it's crazy. It's like, yeah, the wide leg jeans,

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<v Speaker 2>like the same oversized sweatshirts, like.

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<v Speaker 1>The platform chunky sandals.

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<v Speaker 2>Here's the difference though. They are all glued to iPhones

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<v Speaker 2>and we didn't have that. No, and we didn't have

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<v Speaker 2>that until relatively recently. Again not to date myself. How

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<v Speaker 2>do you reach a consumer that is glued to their phone.

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<v Speaker 3>So, as a brand centered at the youth, I actually

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<v Speaker 3>think all of these touch points from a digital standpoint

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<v Speaker 3>offer us a real advantage if you lean in and

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<v Speaker 3>meet the customer where they are. Pacsun has two million

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<v Speaker 3>followers on TikTok, We're on Reddit, we're on discord, on

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<v Speaker 3>ig There's so many different ways to engage with the

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<v Speaker 3>consumer today, YouTube, shorts, and so I talk about it

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<v Speaker 3>as this constant listening loop and listening feedback. If you

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<v Speaker 3>want to know something in live time, you can just

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<v Speaker 3>engage with the consumer. And so the premise of my

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<v Speaker 3>book co Created is really about treating the consumer not

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<v Speaker 3>like an audience. We're not marketing to them, we're not

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<v Speaker 3>building product to then market to them. Instead on the reverse,

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<v Speaker 3>we're building with them. So we've brought the consumer in

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<v Speaker 3>and we are actually co creating the future of our

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<v Speaker 3>brand with these young people.

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<v Speaker 1>How does that work in the creator economy? We've seen

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<v Speaker 1>so many brands kind of fumble those opportunities. Is there

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<v Speaker 1>a specific strategy to taking advantage of people who are

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<v Speaker 1>exciting about brand and bringing them in in a way

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<v Speaker 1>that feels not exploitive but you know, communal and productive.

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<v Speaker 2>Yeah.

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<v Speaker 3>I think we've had tremendous success in the creator economy.

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<v Speaker 3>And really the brand has to shift the notion of control,

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<v Speaker 3>so you have to relinquish, but that's really hard.

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<v Speaker 1>You get paid to have control.

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<v Speaker 3>We have to relinquish some of the control and build

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<v Speaker 3>what I call brand and community trust. And so by

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<v Speaker 3>empowering these young people to be your storyteller, you are

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<v Speaker 3>in essence enabling them not only to create economic ability

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<v Speaker 3>for themselves, but also to storytelling and amplify in a

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<v Speaker 3>way that is otherwise impossible. And in twenty twenty three,

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<v Speaker 3>a packsun fan and customer, e Lilah Biggs, based in Nashville, Tennessee,

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<v Speaker 3>who had just amassed five thousand followers on TikTok, went

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<v Speaker 3>to her local Nashville store, bought a pair of jeans,

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<v Speaker 3>created a video in her bedroom. She has five thousand followers.

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<v Speaker 3>She sold eleven thousand pairs of genes in the next

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<v Speaker 3>thirty six hours. And so it's the power of the algorithm.

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<v Speaker 3>It's the power of authentic storytelling and really allowing to

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<v Speaker 3>lean into your community and empower them so on that.

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<v Speaker 2>If you look at the packs on website right now,

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<v Speaker 2>there's you know, a dozen vertical videos that talk about

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<v Speaker 2>it says packsun styled by you? Are these coming from?

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<v Speaker 2>How does this work? Like? Are these are these collaborations

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<v Speaker 2>that you have with like actually actual normal people? Are

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<v Speaker 2>these like thought up in a marketing department and they're

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<v Speaker 2>like made to look like they'd see vertical video? Like?

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<v Speaker 2>Are these actually like co creator?

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<v Speaker 3>The majority of the videos you would see on our

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<v Speaker 3>side are actually co creation. So then we seek permission

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<v Speaker 3>from those creators.

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<v Speaker 1>Like folks will tag you and then to reach.

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<v Speaker 3>Out absolutely and on TikTok with the open creator platform,

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<v Speaker 3>we actually don't select any of the people who are

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<v Speaker 3>then advocating or promoting the brand they are selecting, and

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<v Speaker 3>we say everyone is welcome, and there's a real magic

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<v Speaker 3>and synergy that happens in that.

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<v Speaker 2>We're speaking with Bran Olson, the CEO of pac Son.

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<v Speaker 2>She's the author of the new book co Created the

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<v Speaker 2>Cultural strategy that redefined pac Son. Christina's got ity.

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<v Speaker 1>Wait, I'm lucky at the wrong camera again. Sorry, it's

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<v Speaker 1>not my facial studio there it is there, it is.

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<v Speaker 1>Talk to us about how you manage a brand turnaround.

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<v Speaker 1>Because the company did file for bankrupcy in twenty sixteen.

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<v Speaker 2>You were there, you were there with pre bankruptcy and

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<v Speaker 2>posts and.

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<v Speaker 1>Retail turnarounds are hard, partially because you do have a

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<v Speaker 1>legacy that can be either a good or a bad thing.

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<v Speaker 1>Reinvention can be really difficult when customers have a certain

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<v Speaker 1>way they think about your brand. How do you do that?

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<v Speaker 1>How did you manage that, and how do you think

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<v Speaker 1>it's been successful?

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<v Speaker 3>Y So, I've been in the CEO role just over

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<v Speaker 3>three years now and I've been with the brand eighteen

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<v Speaker 3>plus years, and so the turnaround, I would say, was

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<v Speaker 3>absolutely a team effort. And as you'll see in the book,

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<v Speaker 3>CO created the fingerprints and the stories of so many

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<v Speaker 3>different people, brands, creators and you know, leaders, within our

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<v Speaker 3>organization and our brand associates are a part of this

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<v Speaker 3>beautiful story of co creation. But the real, honest truth

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<v Speaker 3>is you have to do the inside work first, and

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<v Speaker 3>we had to do a lot of re scrubbing of

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<v Speaker 3>our structure, our internal organization, our operating system. How quickly

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<v Speaker 3>we were getting product to market the silos that had

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<v Speaker 3>existed in our organization for a long time, and we

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<v Speaker 3>did that by leading with purpose. And I think a

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<v Speaker 3>purpose led brand can perform better. And our results have

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<v Speaker 3>followed from the moment we established our purpose, which is

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<v Speaker 3>to inspire the next generation of youth and create community

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<v Speaker 3>at the intersection of fashion, sport, art and music. We

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<v Speaker 3>have really been able to rally both our internal teams

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<v Speaker 3>and our external constituents, which include our community, brands, creators,

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<v Speaker 3>all of the stakeholders.

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<v Speaker 2>I want to talk about some of those stakeholders just

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<v Speaker 2>that you just mentioned the brand specifically, If fifty percent

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<v Speaker 2>of what you're selling is packs on label, then how

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<v Speaker 2>do you ensure the brands that they're going to be given,

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<v Speaker 2>you know, both virtually and physically shelf space that has prominence.

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<v Speaker 3>Yeah, I think listening to the consumer, leveraging data, leveraging

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<v Speaker 3>our Youth Advisory Council, leveraging our packs on Youth Report,

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<v Speaker 3>which surveys six thousand young people. These are ways that

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<v Speaker 3>we can listen in a more efficient way and then

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<v Speaker 3>ensuring that we're being true to our purpose and our pillars.

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<v Speaker 3>So we have a long standing relationship with the Metropolitan

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<v Speaker 3>Museum of Art. The misconception is that young people don't

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<v Speaker 3>care about the arts, but what we've been able to

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<v Speaker 3>prove year after year is that actually young people do

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<v Speaker 3>care about arts, and they care about the fine arts,

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<v Speaker 3>and they care about self expression, and so we were

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<v Speaker 3>very confident that this collaboration and co creation would work

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<v Speaker 3>similar to Formula one. It's hot now, but we started

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<v Speaker 3>working with Formula one almost four and a half five

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<v Speaker 3>years ago. So I think really ensuring that we're staying

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<v Speaker 3>at the pace of culture and we're moving at the

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<v Speaker 3>speed of culture ensures that we stay that one step

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<v Speaker 3>ahead and insures relevancy for the products and brands that

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<v Speaker 3>we curate and bring into our store.

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<v Speaker 1>You said you have an Animal Youth Report. What are

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<v Speaker 1>some of the surprising takeaways when you read that report

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<v Speaker 1>each year? What are some of the things that stand

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<v Speaker 1>out that surprised you even though you've been in this business. Yeah.

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<v Speaker 3>So last year in the Youth Report, serving six thousand

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<v Speaker 3>young people Jen Alpha and GenZ, one of the things

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<v Speaker 3>that came out was that music is the most important

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<v Speaker 3>piece of their life in terms of self expression and fashion,

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<v Speaker 3>and so it ranks higher than fashion. And so I

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<v Speaker 3>think music is this through line for people to express

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<v Speaker 3>themselves and it's variable and fluid, right, So I think

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<v Speaker 3>that was a big kind of unlock. Another unlock was

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<v Speaker 3>mental health, and mental health was both the largest challenge

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<v Speaker 3>but also opportunity when you spoke to young people above

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<v Speaker 3>physical health and academia. But if you really look at it,

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<v Speaker 3>I think it actually shows true optimism because these younger

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<v Speaker 3>generations are willing to lean in. They're vulnerable, they're having

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<v Speaker 3>the conversations, and they want to have the conversation also

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<v Speaker 3>in the workplace. And so I think it's giving us

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<v Speaker 3>an opportunity as brands and corporations to really rethink our

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<v Speaker 3>social responsibility and how does that tie into our corporate responsibility.

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<v Speaker 3>And so I think the Youth Report from a data standpoint,

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<v Speaker 3>in deeply understanding the emotive reasons that consumers are shifting

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<v Speaker 3>their buying pattern shifting consumption patterns was absolutely important to

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<v Speaker 3>kind of strategizing our path forward.

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<v Speaker 2>We're going to talk more. We're going to do some news,

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<v Speaker 2>and then we'll come back and talk more with you.

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<v Speaker 2>Before we do that, though, I want to talk and

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<v Speaker 2>we'll talk retail. Before we that, though, I just want

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<v Speaker 2>to go back to marketing and hear from you about

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<v Speaker 2>the mix of organic marketing versus paid. Can you just

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<v Speaker 2>give us, like, what percentage goes is organic, what percentage

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<v Speaker 2>is paid.

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<v Speaker 3>We're at a pretty even fifty to fifty split, okay,

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<v Speaker 3>And we did bring all of our paid teams in house,

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<v Speaker 3>so we're not leveraging any agents. That's interesting, and that

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<v Speaker 3>is a big pivot and has proven to have significant

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<v Speaker 3>results because the people working on the team are living

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<v Speaker 3>and breathing the brand and listening to our consumers. So

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<v Speaker 3>I think that's the biggest fundamental shift that we've made.

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<v Speaker 2>And then what are they doing on social media to

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<v Speaker 2>find those those reliable voices, those people you want to

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<v Speaker 2>partner with.

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<v Speaker 3>I think first the first level of partnership is looking

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<v Speaker 3>at who's already talking about your brand, because they are

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<v Speaker 3>the authentic storytellers. So that is usually our first step

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<v Speaker 3>in identifying a collaborator or co creator.

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<v Speaker 2>Okay, we got a few more minutes with you. I

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<v Speaker 2>want to talk retail. I want to talk about the

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<v Speaker 2>future of the company. Let's start with retail. Unlike some

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<v Speaker 2>other companies in the last few years who have decreased

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<v Speaker 2>their retail footprint bricks and order footrint, I should say,

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<v Speaker 2>you guys are actually opening stores. You open ten last year,

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<v Speaker 2>you're opening ten this year. What is the way to

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<v Speaker 2>get consumers into the store? How do you do it?

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<v Speaker 3>I think, first of all, we open in areas and

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<v Speaker 3>malls where we already have a high demand.

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<v Speaker 1>So we look at the data, we can.

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<v Speaker 2>See there are a fewer malls now, so like there's

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<v Speaker 2>so many malls that don't exist anymore, they're empty malls.

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<v Speaker 3>I think there's about four hundred and fifty really great

0:11:24.320 --> 0:11:26.520
<v Speaker 3>malls in the US, and we're only in three hundred

0:11:26.520 --> 0:11:28.400
<v Speaker 3>and five of them. So when I look at the

0:11:28.400 --> 0:11:33.000
<v Speaker 3>white space for expansion where there's real customer demand for PACSUN,

0:11:33.559 --> 0:11:35.960
<v Speaker 3>there's still quite a bit of runway there for US.

0:11:36.520 --> 0:11:40.120
<v Speaker 3>And we saw last year our store traffic in our

0:11:40.240 --> 0:11:44.520
<v Speaker 3>malls at PACSUN was up seventeen percent, and so Clearly

0:11:44.720 --> 0:11:48.240
<v Speaker 3>consumers are voting for pacsun they want us to open stores,

0:11:48.280 --> 0:11:51.400
<v Speaker 3>and they're looking for experiential retail. So whether that's us

0:11:51.440 --> 0:11:54.200
<v Speaker 3>showing up track site at Formula one in Austin or

0:11:54.240 --> 0:11:57.760
<v Speaker 3>in Miami where it's unexpected, PACSN has a pop up

0:11:57.800 --> 0:12:01.680
<v Speaker 3>store at the track where it's what we're doing with

0:12:01.800 --> 0:12:04.440
<v Speaker 3>get ready with me the night before New Year's Eve

0:12:04.480 --> 0:12:07.520
<v Speaker 3>and getting our consumers ready. We're bringing them in and

0:12:07.559 --> 0:12:09.600
<v Speaker 3>meeting them where they are in their lives at that moment.

0:12:09.600 --> 0:12:11.680
<v Speaker 2>When did the name change from PACs on from Pacific

0:12:11.679 --> 0:12:12.840
<v Speaker 2>Sunwhere to Pakson.

0:12:12.720 --> 0:12:13.840
<v Speaker 3>About fifteen years ago.

0:12:14.240 --> 0:12:15.520
<v Speaker 2>That's how that's I.

0:12:15.480 --> 0:12:17.400
<v Speaker 1>Mean I always called it packs On. Did you call

0:12:17.440 --> 0:12:18.120
<v Speaker 1>it the whole thing?

0:12:18.720 --> 0:12:20.199
<v Speaker 2>Yeah, I mean that's what it was called.

0:12:20.280 --> 0:12:22.800
<v Speaker 1>There's a thing you're alone on that actually, oh there is.

0:12:22.920 --> 0:12:26.160
<v Speaker 3>Yeah, there's a nostalgic throwback, and younger people think it's

0:12:26.240 --> 0:12:28.840
<v Speaker 3>really fun that we used to be called Pacific somewhere.

0:12:28.920 --> 0:12:31.840
<v Speaker 3>So we've brought it out thousand years their capsules and

0:12:31.880 --> 0:12:32.600
<v Speaker 3>it's been great.

0:12:32.880 --> 0:12:36.079
<v Speaker 1>When you look at appealing to this youth customer you're

0:12:36.080 --> 0:12:38.480
<v Speaker 1>talking about in your survey, how they do care about

0:12:38.520 --> 0:12:40.360
<v Speaker 1>the source of things. They do care about arts. They

0:12:40.360 --> 0:12:43.840
<v Speaker 1>do care about essics. I feel like that runs into

0:12:44.360 --> 0:12:46.680
<v Speaker 1>a couple other market trends, including this love of like

0:12:46.800 --> 0:12:49.840
<v Speaker 1>fast fashion. So how do you how do you have

0:12:49.920 --> 0:12:52.440
<v Speaker 1>those two competing wins? How do you make sure that

0:12:52.480 --> 0:12:56.040
<v Speaker 1>you are keeping that genuineness and that ingenuity and that

0:12:56.120 --> 0:12:59.079
<v Speaker 1>uniqueness and then also providing the number of items in

0:12:59.120 --> 0:13:00.600
<v Speaker 1>the churn that these stomers want.

0:13:01.080 --> 0:13:03.280
<v Speaker 3>I think first of all, we have to acknowledge that

0:13:03.320 --> 0:13:07.240
<v Speaker 3>the consumer is under some price pressures and cost pressures.

0:13:07.840 --> 0:13:10.600
<v Speaker 3>And I think by acknowledging that you also acknowledge that

0:13:10.640 --> 0:13:13.240
<v Speaker 3>they might at some point shop at a brand that

0:13:13.320 --> 0:13:16.360
<v Speaker 3>might be considered fast Fashionyeah, but that at pacsun is

0:13:16.400 --> 0:13:18.640
<v Speaker 3>not what we stand for. We stand for quality first

0:13:18.679 --> 0:13:22.960
<v Speaker 3>and foremost, creating real exclusive product that means something to

0:13:23.000 --> 0:13:25.520
<v Speaker 3>them and will last in their closet, and giving it

0:13:25.559 --> 0:13:27.960
<v Speaker 3>to them at the best value that we can. And

0:13:28.040 --> 0:13:32.120
<v Speaker 3>so we recognize that fast you know, the fast fashion

0:13:32.320 --> 0:13:34.960
<v Speaker 3>shopping might be a part of that ecosystem, but we

0:13:35.000 --> 0:13:35.880
<v Speaker 3>don't play into that.

0:13:35.880 --> 0:13:38.160
<v Speaker 2>Lane pack Son. Before we go, we got to talk

0:13:38.160 --> 0:13:41.520
<v Speaker 2>to business. Pacsun was a publicly traded company in the

0:13:41.600 --> 0:13:44.840
<v Speaker 2>nineteen nineties at IPO, it went private and then Filder

0:13:44.840 --> 0:13:47.840
<v Speaker 2>bankruptcy back in twenty sixteen. Are you on the path

0:13:47.880 --> 0:13:49.480
<v Speaker 2>right now to become a public company.

0:13:49.160 --> 0:13:51.280
<v Speaker 3>Again, we're certainly exploring that option.

0:13:51.760 --> 0:13:52.760
<v Speaker 2>Are you profitable now?

0:13:52.880 --> 0:13:56.800
<v Speaker 3>We're profitable. We just came in near a billion dollars

0:13:56.920 --> 0:14:01.040
<v Speaker 3>last year. That was from seven hundred plus Minion's three

0:14:01.160 --> 0:14:05.040
<v Speaker 3>years prior to a billion dollars, So really exciting to

0:14:05.080 --> 0:14:07.360
<v Speaker 3>see the growth. And the growth has been nice and

0:14:07.440 --> 0:14:10.400
<v Speaker 3>steady over the last three years. And we're seeing the

0:14:10.400 --> 0:14:14.320
<v Speaker 3>growth across both genders and across a multitude of great brands,

0:14:14.360 --> 0:14:15.920
<v Speaker 3>inclusive of the pacsun brands.

0:14:16.320 --> 0:14:19.160
<v Speaker 2>Ran Olson, she's the CEO of Paksan. She's the author

0:14:19.200 --> 0:14:21.880
<v Speaker 2>of the new book co created the cultural strategy that

0:14:21.960 --> 0:14:25.560
<v Speaker 2>redefined Paksan. Joining us here in the Bloomberg Interactive Brokers studio.

0:14:25.600 --> 0:14:27.840
<v Speaker 2>Congratulations on the book and thank you for joining us.

0:14:27.840 --> 0:14:29.200
<v Speaker 1>Thank you so much. And if you want to bring

0:14:29.200 --> 0:14:31.000
<v Speaker 1>back the Puka Shehell necklace, we know you have a

0:14:31.040 --> 0:14:32.200
<v Speaker 1>model right here ready to get