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00:00You were telling us at the break, you've been at the company a long time, and in your time,
00:05I think you said 17, 18 years, in that time, how has the company evolved into what it is now?
00:09Yeah, I've been at the company almost two decades, and when I joined, we were a surf,
00:14skate, legacy retailer. And today, after a transformation of almost two decades and a
00:19real focus on the power of co-creation, we have successfully moved from being a retailer,
00:24where PacSun's brand was just on the outside of the store to an actual brand that young people today
00:33love. And so 50% of what we sell in a PacSun store today now carries the PacSun label.
00:39How does that work in a world where, and look, I'm going to totally age myself here.
00:44Oh, we've already, we're both there.
00:45You know, when I drop my kids off at school, they're young, they're three and seven, but when
00:49I drop them off at school, I walk by a middle school. And at the middle school, these kids
00:53literally are dressing like we used to dress when we were in middle school. It is crazy.
00:57It's like the wide leg jeans, like the same oversized sweatshirts, like the platform,
01:03chunky sandals. Here's the difference, though. They are all glued to iPhones. And we didn't have
01:07that. No. And we didn't have that until relatively recently. Again, not to date myself. How do you
01:13reach a consumer that is glued to their phone? So as a brand centered at the youth, I actually think
01:21all of these touch points from a digital standpoint offer us a real advantage. If you lean in and meet
01:27the customer where they are, PacSun has 2 million followers on TikTok. We're on Reddit, we're on
01:33Discord, on IG. There's so many different ways to engage with the consumer today, YouTube shorts.
01:39And so I talk about it as this constant listening loop and listening feedback. If you want to know
01:45something in live time, you can just engage with the consumer. And so the premise of my book,
01:50Co-Created, is really about treating the consumer not like an audience. We're not marketing to them.
01:56We're not building product to then market to them. Instead, on the reverse, we're building with them.
02:02So we've brought the consumer in, and we are actually co-creating the future of our brand
02:07with these young people.
02:10How does that work in the creator economy? We've seen so many brands kind of fumble those
02:14opportunities. Is there a specific strategy to taking advantage of people who are exciting about
02:19the brand and bringing them in in a way that feels not exploitive, but communal and productive?
02:25Yeah, I think we've had tremendous success in the creator economy. And really, the brand has to
02:31shift the notion of control. So you have to relinquish.
02:35But that's really hard because you get paid to have control.
02:37We have to relinquish some of the control and build what I call brand and community trust.
02:43And so by empowering these young people to be your storyteller, you are in essence enabling them
02:51not only to create economic ability for themselves, but also to storytell and amplify in a way that is
02:58otherwise impossible. And in 2023, a PacSun fan and customer, Lila Biggs, based in Nashville, Tennessee,
03:06who had just amassed 5,000 followers on TikTok, went to her local Nashville store, bought a pair of
03:13jeans, created a video in her bedroom. She has 5,000 followers. She sold 11,000 pairs of jeans in
03:20the
03:20next 36 hours. And so it's the power of the algorithm. It's the power of authentic storytelling
03:26and really allowing to lean into your community and empower them.
03:31So on that, if you look at the PacSun website right now, there's a dozen vertical videos that
03:36talk about, it says PacSun styled by you. Are these coming from, how does this work? Are these collaborations
03:43that you have with actual normal people? Or are these thought up in a marketing department and
03:50they're made to look like they'd see vertical videos? Are these actually co-created?
03:54The majority of the videos you would see on our site are actually co-creation. So then we seek
03:59permission from those creators. Like folks will tag you and then we reach out?
04:04Absolutely. And on TikTok with the Open Creator platform, we actually don't select any of the
04:11people who are then advocating or promoting the brand. They are selecting and we say everyone is
04:16welcome. And there's a real magic and synergy that happens in that.
04:20We're speaking with Brianne Olson, the CEO of PacSun. She's the author of the new book,
04:24co-created the cultural strategy that redefined PacSun. Christina's got it right there.
04:29Wait, I'm looking at the wrong camera again. Sorry, it's not my usual studio. There it is. There it is.
04:33Talk to us about how you manage a brand turnaround because the company did file for bankruptcy in
04:372016.
04:38And you were there. You were there for pre-bankruptcy and post.
04:41And retail turnarounds are hard, partially because you do have a legacy that can be either a good or a
04:47bad
04:47thing. Reinvention can be really difficult when customers have a certain way they think about your
04:51brand. How do you do that? How did you manage that? And how do you think it's been successful?
04:55So I've been in the CEO role just over three years now, and I've been with the brand 18 plus
05:00years.
05:01And so the turnaround, I would say, was absolutely a team effort. And as you'll see in the book,
05:07co-created the fingerprints and the stories of so many different people, brands, creators, and,
05:13you know, leaders within our organization and our brand associates are a part of this beautiful story of
05:18co-creation. But the real honest truth is you have to do the inside work first. And we had to
05:24do a lot of
05:24re-scrubbing of our structure, our internal organization, our operating system, how quickly we were getting
05:31product to market, the silos that had existed in our organization for a long time. And we did that by
05:37leading
05:37with purpose. And I think a purpose-led brand can perform better. And our results have followed from
05:43the moment we established our purpose, which is to inspire the next generation of youth and create
05:48community at the intersection of fashion, sport, art, and music. We have really been able to rally both
05:55our internal teams and our external constituents, which include our community, brands, creators, all of
06:02the stakeholders. I want to talk about some of those stakeholders just that you just mentioned, the
06:05brands specifically. If 50% of what you're selling is PacSun label, then how do you ensure the brands
06:13that they're going to be given, you know, both virtually and physically, shelf space that has
06:19prominence? Yeah, I think listening to the consumer, leveraging data, leveraging our youth advisory council,
06:27leveraging our PacSun youth report, which surveys 6,000 young people, these are ways that we can listen
06:34in a more efficient way. And then ensuring that we're being true to our purpose and our pillars. So
06:39we have a longstanding relationship with the Metropolitan Museum of Art. The misconception is
06:44that young people don't care about the arts. But what we've been able to prove year after year is that
06:50actually young people do care about arts, and they care about the fine arts, and they care about
06:55self-expression. And so we were very confident that this collaboration and co-creation would work,
07:00similar to Formula One. It's hot now, but we started working with Formula One almost four and a half,
07:06five years ago. So I think really ensuring that we're staying at the pace of culture, and we're moving
07:12at the speed of culture, ensures that we stay that one step ahead and ensures relevancy for the products
07:19and brands that we carry and bring into our store. You said you have an annual youth report. What are
07:23some of the surprising takeaways when you read that report each year? What are some of the things that
07:27stand out that surprised you, even though you've been in this business? Yeah, so last year in the
07:31youth report serving 6,000 young people, Gen Alpha and Gen C, one of the things that came out was
07:37that
07:37music is the most important piece of their life in terms of self-expression and fashion. And so it ranks
07:46higher than fashion. And so I think music is this through line for people to express themselves,
07:52and it's variable and fluid, right? So I think that was a big kind of unlock. Another unlock was
08:00mental health. And mental health was both the largest challenge, but also opportunity when you spoke to
08:07young people above physical health and academia. But if you really look at it, I think it actually shows
08:13true optimism because these younger generations are willing to lean in. They're vulnerable. They're
08:19having the conversations. And they want to have the conversation also in the workplace. And so I
08:24think it's giving us an opportunity as brands and corporations to really rethink our social
08:29responsibility. And how does that tie into our corporate responsibility? And so I think the youth
08:34report from a data standpoint and deeply understanding the emotive reasons that consumers are shifting their
08:41buying patterns, shifting consumption patterns was absolutely important to kind of strategizing our
08:47path forward. We're going to talk more. We're going to do some news and then we'll come back and talk
08:52more with you. Before we do that though, I want to talk and we'll talk retail. Before we do that
08:57though,
08:57I just want to go back to marketing and hear from you about the mix of organic marketing versus paid.
09:02Can you just give us like what percentage goes is organic? What percentage is paid?
09:06We're at a pretty even 50-50 split and we did bring all of our paid teams in-house. So
09:12we're
09:12not leveraging any agencies. That's interesting. And that is a big pivot and has proven to have
09:17significant results because the people working on the team are living and breathing the brand
09:22and listening to our consumers. So I think that's the biggest fundamental shift that we've made.
09:27And then what are they doing on social media to find those reliable voices, those people you want
09:32to partner with? I think first, the first level of partnership is looking at who's already talking
09:37about your brands because they are the authentic storytellers. So that is usually our first step in
09:42identifying a collaborator or co-creator. Okay. We got a few more minutes with you. I want to talk
09:47retail. I want to talk about the future of the company. Let's start with retail. Unlike some other
09:53companies in the last few years who have decreased their retail footprint, bricks and mortar footprint,
09:57I should say, you guys are actually opening stores. You opened 10 last year, you're opening 10 this
10:01year. What is, what is the way to get consumers into the store? How do you do it? I think
10:06first of all,
10:07we open in areas and malls where we already have a high demand. So we look at the data, we
10:13cross
10:13reference it. I mean, there are fewer malls now. So like there's so many malls that don't exist anymore.
10:17They're empty malls. I think there's about 450 really great malls in the U S and we're only in 305
10:23of them.
10:24So when I look at the white space for expansion, where there's real customer demand for PacSun,
10:30there's still quite a bit of runway there for us. And we saw last year, our store traffic in our
10:37malls at PacSun was up 17%. And so clearly consumers are voting for PacSun. They want us to open stores
10:45and they're looking for experiential retail. So whether that's us showing up trackside at Formula One
10:50in Austin or in Miami, where it's unexpected, PacSun has a pop-up store at the track,
10:57or it's what we're doing with get ready with me the night before New Year's Eve and getting
11:02our consumers ready. We're bringing them in and meeting them where they are in their lives at
11:06that moment. When did the name change from PacSun or from Pacific Sunward to PacSun?
11:09About 15 years ago. All right. So that's how old, that's how old. I mean, I always called it PacSun.
11:14Did you call it the whole thing? Yeah. I mean, that's what it was called.
11:17There's a fun TikTok on that actually. Oh, there is. Yeah. There's a nostalgic throwback and younger
11:22people think it's really fun that we used to be called Pacific somewhere. So we've brought it back
11:27in small pieces through capsules and it's been great. When you look at appealing to this youth customer,
11:33you were talking about in your survey, how they do care about the source of things. They do care about
11:37arts. They do care about ethics. I feel like that runs into a couple other market trends,
11:42including this love of like fast fashion. So how do you, how do you have those two competing
11:47wins? How do you make sure that you are keeping that genuineness and that ingenuity and that
11:53uniqueness, and then also providing the number of items and the churn that these customers want?
11:58I think first of all, we have to acknowledge that the consumer is under some price pressures and cost
12:03pressures. And I think by acknowledging that, you also acknowledge that they might at some point
12:09shop at a brand that might be considered fast fashion. Yeah.
12:12But that at PacSun is not what we stand for. We stand for quality first and foremost,
12:16creating real exclusive product that means something to them and will last in their closet
12:21and giving it to them at the best value that we can. And so we recognize that fast, you know,
12:28the fast fashion shopping might be a part of that ecosystem, but we don't play into that lane.
12:33PacSun, before we go, we got to talk business. PacSun was a
12:37publicly traded company in the 1990s. It, it IPO, it went private and then filed for banks back in,
12:42in 2016. Are you on the path right now to become a public company again?
12:46We're certainly exploring that option. Uh, are you profitable now?
12:50We're profitable. We just came in near a billion dollars last year. That was from 700 plus million.
12:57That's top line. Three years prior, a billion dollars. So really exciting to see the growth.
13:02And the growth has been nice and steady over the last three years. And we're seeing the growth
13:07across both genders and across a multitude of great brands, inclusive of the PacSun brands.
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