Speaker 1: All right, Tim, I have a question for you. Were
Speaker 1: you a mall rat?
Speaker 2: Yeah, I mean everyone in the nineties was a mall rat.
Speaker 1: It wasn't that much to do in the nineties.
Speaker 2: And then going did you Southern California nineties? Mom, yees skateboarding?
Speaker 1: Did you have a Pukashan necklace?
Speaker 2: For a very brief time? I did, and there might
Speaker 2: be pictures to prove it. Very brief.
Speaker 1: Yeah, all right, we're gonna I'm little side. We don't
Speaker 1: have this. I should Doug gooes outsh grade seventh grade.
Speaker 1: We all make questionable fashion decisions in middle school. I mean, listen,
Speaker 1: they were the thing, and one of the it brands
Speaker 1: when we were in high school, of course, was pac Sun.
Speaker 1: The company's gone through a lot of changes. They filed
Speaker 1: for bankrupty in twenty sixteen, but now it's back, it's rebranded,
Speaker 1: and it's thriving, and it's capitalizing on a couple things,
Speaker 1: including this wave of Millennia nostalgia and new generation of
Speaker 1: shoppers who are more socially aware but no less fashionable
Speaker 1: than we were when we were their age. Pacsun's CEO,
Speaker 1: Brian Olson, joins us now her book co created here
Speaker 1: we go, we get right here talks about the turnaround
Speaker 1: of the company and how much to my joy, she says,
Speaker 1: brick and mortar stores are not dead, they just need
Speaker 1: to reinvent themselves. Thank you so much for coming on.
Speaker 1: You were telling us that the break. You've been at
Speaker 1: a company a long time and in your time I
Speaker 1: think you said seventeen eighteen years. In that time, how
Speaker 1: has the company evolved into what it is now?
Speaker 3: Yeah, I've been at the company almost two decades, and
Speaker 3: when I joined, we were a surf skate legacy retailer.
Speaker 3: And today, after a transformation of almost two decades and
Speaker 3: a real focus on the power of co creation, we
Speaker 3: have successfully moved from being a retailer where Pacsun's brand
Speaker 3: was just on the outside of the store to an
Speaker 3: actual brand that young people today love. And so fifty
Speaker 3: percent of what we sell in a Pacsun's store today
Speaker 3: now carries the pacsun label.
Speaker 2: How does that work in a world where and look,
Speaker 2: I'm going to totally age myself here, right, We're about there.
Speaker 2: You know, when I dropped my kids off at school,
Speaker 2: they're young there, three and seven. But when I drop
Speaker 2: them off at school, I walked by a middle school,
Speaker 2: and at the middle school, these kids literally are dressing
Speaker 2: like we used to dress when we were in middle school.
Speaker 2: It is it's crazy. It's like, yeah, the wide leg jeans,
Speaker 2: like the same oversized sweatshirts, like.
Speaker 1: The platform chunky sandals.
Speaker 2: Here's the difference though. They are all glued to iPhones
Speaker 2: and we didn't have that. No, and we didn't have
Speaker 2: that until relatively recently. Again not to date myself. How
Speaker 2: do you reach a consumer that is glued to their phone.
Speaker 3: So, as a brand centered at the youth, I actually
Speaker 3: think all of these touch points from a digital standpoint
Speaker 3: offer us a real advantage if you lean in and
Speaker 3: meet the customer where they are. Pacsun has two million
Speaker 3: followers on TikTok, We're on Reddit, we're on discord, on
Speaker 3: ig There's so many different ways to engage with the
Speaker 3: consumer today, YouTube, shorts, and so I talk about it
Speaker 3: as this constant listening loop and listening feedback. If you
Speaker 3: want to know something in live time, you can just
Speaker 3: engage with the consumer. And so the premise of my
Speaker 3: book co Created is really about treating the consumer not
Speaker 3: like an audience. We're not marketing to them, we're not
Speaker 3: building product to then market to them. Instead on the reverse,
Speaker 3: we're building with them. So we've brought the consumer in
Speaker 3: and we are actually co creating the future of our
Speaker 3: brand with these young people.
Speaker 1: How does that work in the creator economy? We've seen
Speaker 1: so many brands kind of fumble those opportunities. Is there
Speaker 1: a specific strategy to taking advantage of people who are
Speaker 1: exciting about brand and bringing them in in a way
Speaker 1: that feels not exploitive but you know, communal and productive.
Speaker 2: Yeah.
Speaker 3: I think we've had tremendous success in the creator economy.
Speaker 3: And really the brand has to shift the notion of control,
Speaker 3: so you have to relinquish, but that's really hard.
Speaker 1: You get paid to have control.
Speaker 3: We have to relinquish some of the control and build
Speaker 3: what I call brand and community trust. And so by
Speaker 3: empowering these young people to be your storyteller, you are
Speaker 3: in essence enabling them not only to create economic ability
Speaker 3: for themselves, but also to storytelling and amplify in a
Speaker 3: way that is otherwise impossible. And in twenty twenty three,
Speaker 3: a packsun fan and customer, e Lilah Biggs, based in Nashville, Tennessee,
Speaker 3: who had just amassed five thousand followers on TikTok, went
Speaker 3: to her local Nashville store, bought a pair of jeans,
Speaker 3: created a video in her bedroom. She has five thousand followers.
Speaker 3: She sold eleven thousand pairs of genes in the next
Speaker 3: thirty six hours. And so it's the power of the algorithm.
Speaker 3: It's the power of authentic storytelling and really allowing to
Speaker 3: lean into your community and empower them so on that.
Speaker 2: If you look at the packs on website right now,
Speaker 2: there's you know, a dozen vertical videos that talk about
Speaker 2: it says packsun styled by you? Are these coming from?
Speaker 2: How does this work? Like? Are these are these collaborations
Speaker 2: that you have with like actually actual normal people? Are
Speaker 2: these like thought up in a marketing department and they're
Speaker 2: like made to look like they'd see vertical video? Like?
Speaker 2: Are these actually like co creator?
Speaker 3: The majority of the videos you would see on our
Speaker 3: side are actually co creation. So then we seek permission
Speaker 3: from those creators.
Speaker 1: Like folks will tag you and then to reach.
Speaker 3: Out absolutely and on TikTok with the open creator platform,
Speaker 3: we actually don't select any of the people who are
Speaker 3: then advocating or promoting the brand they are selecting, and
Speaker 3: we say everyone is welcome, and there's a real magic
Speaker 3: and synergy that happens in that.
Speaker 2: We're speaking with Bran Olson, the CEO of pac Son.
Speaker 2: She's the author of the new book co Created the
Speaker 2: Cultural strategy that redefined pac Son. Christina's got ity.
Speaker 1: Wait, I'm lucky at the wrong camera again. Sorry, it's
Speaker 1: not my facial studio there it is there, it is.
Speaker 1: Talk to us about how you manage a brand turnaround.
Speaker 1: Because the company did file for bankrupcy in twenty sixteen.
Speaker 2: You were there, you were there with pre bankruptcy and
Speaker 2: posts and.
Speaker 1: Retail turnarounds are hard, partially because you do have a
Speaker 1: legacy that can be either a good or a bad thing.
Speaker 1: Reinvention can be really difficult when customers have a certain
Speaker 1: way they think about your brand. How do you do that?
Speaker 1: How did you manage that, and how do you think
Speaker 1: it's been successful?
Speaker 3: Y So, I've been in the CEO role just over
Speaker 3: three years now and I've been with the brand eighteen
Speaker 3: plus years, and so the turnaround, I would say, was
Speaker 3: absolutely a team effort. And as you'll see in the book,
Speaker 3: CO created the fingerprints and the stories of so many
Speaker 3: different people, brands, creators and you know, leaders, within our
Speaker 3: organization and our brand associates are a part of this
Speaker 3: beautiful story of co creation. But the real, honest truth
Speaker 3: is you have to do the inside work first, and
Speaker 3: we had to do a lot of re scrubbing of
Speaker 3: our structure, our internal organization, our operating system. How quickly
Speaker 3: we were getting product to market the silos that had
Speaker 3: existed in our organization for a long time, and we
Speaker 3: did that by leading with purpose. And I think a
Speaker 3: purpose led brand can perform better. And our results have
Speaker 3: followed from the moment we established our purpose, which is
Speaker 3: to inspire the next generation of youth and create community
Speaker 3: at the intersection of fashion, sport, art and music. We
Speaker 3: have really been able to rally both our internal teams
Speaker 3: and our external constituents, which include our community, brands, creators,
Speaker 3: all of the stakeholders.
Speaker 2: I want to talk about some of those stakeholders just
Speaker 2: that you just mentioned the brand specifically, If fifty percent
Speaker 2: of what you're selling is packs on label, then how
Speaker 2: do you ensure the brands that they're going to be given,
Speaker 2: you know, both virtually and physically shelf space that has prominence.
Speaker 3: Yeah, I think listening to the consumer, leveraging data, leveraging
Speaker 3: our Youth Advisory Council, leveraging our packs on Youth Report,
Speaker 3: which surveys six thousand young people. These are ways that
Speaker 3: we can listen in a more efficient way and then
Speaker 3: ensuring that we're being true to our purpose and our pillars.
Speaker 3: So we have a long standing relationship with the Metropolitan
Speaker 3: Museum of Art. The misconception is that young people don't
Speaker 3: care about the arts, but what we've been able to
Speaker 3: prove year after year is that actually young people do
Speaker 3: care about arts, and they care about the fine arts,
Speaker 3: and they care about self expression, and so we were
Speaker 3: very confident that this collaboration and co creation would work
Speaker 3: similar to Formula one. It's hot now, but we started
Speaker 3: working with Formula one almost four and a half five
Speaker 3: years ago. So I think really ensuring that we're staying
Speaker 3: at the pace of culture and we're moving at the
Speaker 3: speed of culture ensures that we stay that one step
Speaker 3: ahead and insures relevancy for the products and brands that
Speaker 3: we curate and bring into our store.
Speaker 1: You said you have an Animal Youth Report. What are
Speaker 1: some of the surprising takeaways when you read that report
Speaker 1: each year? What are some of the things that stand
Speaker 1: out that surprised you even though you've been in this business. Yeah.
Speaker 3: So last year in the Youth Report, serving six thousand
Speaker 3: young people Jen Alpha and GenZ, one of the things
Speaker 3: that came out was that music is the most important
Speaker 3: piece of their life in terms of self expression and fashion,
Speaker 3: and so it ranks higher than fashion. And so I
Speaker 3: think music is this through line for people to express
Speaker 3: themselves and it's variable and fluid, right, So I think
Speaker 3: that was a big kind of unlock. Another unlock was
Speaker 3: mental health, and mental health was both the largest challenge
Speaker 3: but also opportunity when you spoke to young people above
Speaker 3: physical health and academia. But if you really look at it,
Speaker 3: I think it actually shows true optimism because these younger
Speaker 3: generations are willing to lean in. They're vulnerable, they're having
Speaker 3: the conversations, and they want to have the conversation also
Speaker 3: in the workplace. And so I think it's giving us
Speaker 3: an opportunity as brands and corporations to really rethink our
Speaker 3: social responsibility and how does that tie into our corporate responsibility.
Speaker 3: And so I think the Youth Report from a data standpoint,
Speaker 3: in deeply understanding the emotive reasons that consumers are shifting
Speaker 3: their buying pattern shifting consumption patterns was absolutely important to
Speaker 3: kind of strategizing our path forward.
Speaker 2: We're going to talk more. We're going to do some news,
Speaker 2: and then we'll come back and talk more with you.
Speaker 2: Before we do that, though, I want to talk and
Speaker 2: we'll talk retail. Before we that, though, I just want
Speaker 2: to go back to marketing and hear from you about
Speaker 2: the mix of organic marketing versus paid. Can you just
Speaker 2: give us, like, what percentage goes is organic, what percentage
Speaker 2: is paid.
Speaker 3: We're at a pretty even fifty to fifty split, okay,
Speaker 3: And we did bring all of our paid teams in house,
Speaker 3: so we're not leveraging any agents. That's interesting, and that
Speaker 3: is a big pivot and has proven to have significant
Speaker 3: results because the people working on the team are living
Speaker 3: and breathing the brand and listening to our consumers. So
Speaker 3: I think that's the biggest fundamental shift that we've made.
Speaker 2: And then what are they doing on social media to
Speaker 2: find those those reliable voices, those people you want to
Speaker 2: partner with.
Speaker 3: I think first the first level of partnership is looking
Speaker 3: at who's already talking about your brand, because they are
Speaker 3: the authentic storytellers. So that is usually our first step
Speaker 3: in identifying a collaborator or co creator.
Speaker 2: Okay, we got a few more minutes with you. I
Speaker 2: want to talk retail. I want to talk about the
Speaker 2: future of the company. Let's start with retail. Unlike some
Speaker 2: other companies in the last few years who have decreased
Speaker 2: their retail footprint bricks and order footrint, I should say,
Speaker 2: you guys are actually opening stores. You open ten last year,
Speaker 2: you're opening ten this year. What is the way to
Speaker 2: get consumers into the store? How do you do it?
Speaker 3: I think, first of all, we open in areas and
Speaker 3: malls where we already have a high demand.
Speaker 1: So we look at the data, we can.
Speaker 2: See there are a fewer malls now, so like there's
Speaker 2: so many malls that don't exist anymore, they're empty malls.
Speaker 3: I think there's about four hundred and fifty really great
Speaker 3: malls in the US, and we're only in three hundred
Speaker 3: and five of them. So when I look at the
Speaker 3: white space for expansion where there's real customer demand for PACSUN,
Speaker 3: there's still quite a bit of runway there for US.
Speaker 3: And we saw last year our store traffic in our
Speaker 3: malls at PACSUN was up seventeen percent, and so Clearly
Speaker 3: consumers are voting for pacsun they want us to open stores,
Speaker 3: and they're looking for experiential retail. So whether that's us
Speaker 3: showing up track site at Formula one in Austin or
Speaker 3: in Miami where it's unexpected, PACSN has a pop up
Speaker 3: store at the track where it's what we're doing with
Speaker 3: get ready with me the night before New Year's Eve
Speaker 3: and getting our consumers ready. We're bringing them in and
Speaker 3: meeting them where they are in their lives at that moment.
Speaker 2: When did the name change from PACs on from Pacific
Speaker 2: Sunwhere to Pakson.
Speaker 3: About fifteen years ago.
Speaker 2: That's how that's I.
Speaker 1: Mean I always called it packs On. Did you call
Speaker 1: it the whole thing?
Speaker 2: Yeah, I mean that's what it was called.
Speaker 1: There's a thing you're alone on that actually, oh there is.
Speaker 3: Yeah, there's a nostalgic throwback, and younger people think it's
Speaker 3: really fun that we used to be called Pacific somewhere.
Speaker 3: So we've brought it out thousand years their capsules and
Speaker 3: it's been great.
Speaker 1: When you look at appealing to this youth customer you're
Speaker 1: talking about in your survey, how they do care about
Speaker 1: the source of things. They do care about arts. They
Speaker 1: do care about essics. I feel like that runs into
Speaker 1: a couple other market trends, including this love of like
Speaker 1: fast fashion. So how do you how do you have
Speaker 1: those two competing wins? How do you make sure that
Speaker 1: you are keeping that genuineness and that ingenuity and that
Speaker 1: uniqueness and then also providing the number of items in
Speaker 1: the churn that these stomers want.
Speaker 3: I think first of all, we have to acknowledge that
Speaker 3: the consumer is under some price pressures and cost pressures.
Speaker 3: And I think by acknowledging that you also acknowledge that
Speaker 3: they might at some point shop at a brand that
Speaker 3: might be considered fast Fashionyeah, but that at pacsun is
Speaker 3: not what we stand for. We stand for quality first
Speaker 3: and foremost, creating real exclusive product that means something to
Speaker 3: them and will last in their closet, and giving it
Speaker 3: to them at the best value that we can. And
Speaker 3: so we recognize that fast you know, the fast fashion
Speaker 3: shopping might be a part of that ecosystem, but we
Speaker 3: don't play into that.
Speaker 2: Lane pack Son. Before we go, we got to talk
Speaker 2: to business. Pacsun was a publicly traded company in the
Speaker 2: nineteen nineties at IPO, it went private and then Filder
Speaker 2: bankruptcy back in twenty sixteen. Are you on the path
Speaker 2: right now to become a public company.
Speaker 3: Again, we're certainly exploring that option.
Speaker 2: Are you profitable now?
Speaker 3: We're profitable. We just came in near a billion dollars
Speaker 3: last year. That was from seven hundred plus Minion's three
Speaker 3: years prior to a billion dollars, So really exciting to
Speaker 3: see the growth. And the growth has been nice and
Speaker 3: steady over the last three years. And we're seeing the
Speaker 3: growth across both genders and across a multitude of great brands,
Speaker 3: inclusive of the pacsun brands.
Speaker 2: Ran Olson, she's the CEO of Paksan. She's the author
Speaker 2: of the new book co created the cultural strategy that
Speaker 2: redefined Paksan. Joining us here in the Bloomberg Interactive Brokers studio.
Speaker 2: Congratulations on the book and thank you for joining us.
Speaker 1: Thank you so much. And if you want to bring
Speaker 1: back the Puka Shehell necklace, we know you have a
Speaker 1: model right here ready to get