Selling Teen Spirit

Though the chain's mer chandise looks cutting edge, Weaver is quite care ful to avoid fashion extremes. Unlike competitor Abercrombie & Fitch, which plays up the libidinous elements of its teen offerings, PacSun sells clothes that would pass muster at any high school with a dress code. Weaver says he avoids resorting to sexual advertising messages to move merchandise. "Many teenagers love it," he says, "but why would I alienate the parents? I can't forget my customer is 15 and doesn't have a credit card."

But Weaver has not avoided all the pitfalls. In 2001 the company misjudged demand, and weaker-than-expected sales hurt earnings, which fell to a disappointing $8.9 million in the third quarter of 2001. Weaver chalked it up to the growing pains of a rapidly expanding chain. "Suddenly I realized that all the things I was able to do with 150 stores, I couldn't do at 650," he says.

Fortunately, PacSun was broadening its customer base at about the same time. Before, its clothes had a punkish surf-skate attitude that appealed mainly to teenage boys — an image the company reinforced by, among other marketing moves, sponsoring the X Games. But in 2001 Weaver took some tentative steps into the girls' market. Customer response was strong, helping pull the chain out of its mild slump. Weaver today attributes much of the past year's success to the purchasing instincts of girls, who, unlike boys, buy not just a single item of clothing but an outfit with a belt, bag, hat, earrings and any other accessories for which they can find space on their body. Weaver has dropped the X Games sponsorship and now devotes almost all his $10 million annual advertising budget to magazines like CosmoGirl. As long as the stores aren't too feminine, he says, boys don't seem to mind. Sales to girls account for 48% of total purchases, a portion Weaver expects to climb to 50% in the next few months.

PacSun isn't finished with expansion. Weaver says the company is looking at possible acquisitions, although he plans to stay squarely in the teen market. For as fickle as teenagers can be, they can also be charmingly oblivious to events that suppress the purchasing appetites of other consumers. Teens "are CNN-proof," he says. "Sept. 11 and a day or two after were clearly brutal, but within four or five days, business came back." For teens, the sun rarely sets.