Eddie Bauer, Pacific Sunwear Explore Merger Amid Retail Downturn
Eddie Bauer and Pacific Sunwear are exploring a merger to consolidate their store footprint and weather a prolonged downturn in the U.S. brick-and-mortar retail sector. The two apparel retailers have both previously filed for bankruptcy and are looking for ways to spur future growth. In a merger, the companies could whittle down their store counts from their current total of nearly 700 together, the sources said. Both retailers saw an increase in store sales over the last year: Eddie Bauer's sales increased 9 percent, and PacSun's increased 6 percent.
Total Retail's Take: With the challenges facing traditional brick-and-mortar retailers, many are exploring mergers and acquisitions as means to better fortify their position in the marketplace. That said, I'm not sure an Eddie Bauer-PacSun merger makes a lot of sense. While the two brands do share a common owner, Golden Gate Capital, the similarities after that are few and far between. Their branding, marketing and customer demographics (teen retailer vs. family outdoor apparel and accessories) are divergent. I'm not sure what this partnership could look like, but maybe that's the point … acquiring a new audience for each brand.