Sponsors
Billabong ▲ +0.005 | PPR ▲ +0.80 | American Apparel ▲ +0.07 | The Buckle ▼ -0.99 | Columbia ▼ -0.38 | Deckers Outdoor ▼ -1.94 | Dicks ▼ -0.92 | Foot Locker ▼ -4.02 | Genesco ▼ -3.05 | Iconix Brand Group ▼ -2.52 | Jarden Corp ▼ -0.17 | Nordstrom ▼ -0.42 | Luxottica ▲ +0.45 | Nike ▼ -2.24 | Pacific Sunwear ▼ -0.05 | Skullcandy ▼ -0.04 | Sport Chalet - 0 | Urban Outfitters ▼ -0.15 | VF Corp ▼ -1.17 | Quiksilver ▲ +0.46 | Zumiez ▼ -0.62 | Macys ▼ -1.48 | Tillys ▲ +0.15 |
Ticker Sponsor
Readers Say
The first thing I look at
The first thing I look at

I find Shop-Eat-Surf to be a very useful and informative site that I enjoy browsing daily. Shop-Eat-Surf is the first thing I look at every morning to keep up-to-date on the latest talk, events, and happenings in the industry. I must say I am a fan of Shop-Eat-Surf.

- By Bobby Abdel, Partner, Jack's Surfboards
Keeps me in the loop
Keeps me in the loop

Being an Executive Edition member allows me to not miss a beat when it comes to the Industry business news. Definitely keeps me in the loop plus goes great with my morning joe.

- By Tony Perez, Surfer and Surfing magazines
Industry Insight

AGENDA: GroupY's Emerge brand-building conference returns on Jan. 6.
SURFRIDER: "Protect What You Love" holiday appeal.
MOSS ADAMS: Plan now for tax season.
Details on Industry Insight.


Tiffany Montgomery
Print This Article

The challenges facing the Adrenalina bid

By Tiffany Montgomery
October 20, 2008 9:25 AM

I've talked to several financial folks this morning to see if they think the bid by Adrenalina for PacSun is possible.


I'll summarize what they said the challenges are:


Financing: At a time when credit conditions may be the tightest they have ever been, it will likely be difficult for Adrenalina to raise the $250 million to $300 million needed to purchase PacSun, analysts say.


Size: Adrenalina is small compared to PacSun. The company currently operates three stores. PacSun operates 938.


During the fiscal year ended December 31, 2007, Adrenalina had revenues of $3.3 million and incurred a net loss of $5.8 million. PacSun had $1.4 billion in net sales and net income of $39.6 million.


Valuation: Though the $4.50 offer is above PacSun's trading price of $3.78 this morning, analysts said it doesn't take into account the value of PacSun's large stores base and retail infrastructure.


Bloomberg quoted an analyst along those lines. From the Bloomberg story:


"Amy Noblin, an analyst at Pali Research, was skeptical.

 

"We think this particular deal is unlikely to happen given the low price,' she wrote in a research note Monday. Pacific Sunwear's value is closer to $10 a share," she said.

 


More on: PacSun, bid, Adrenalina

Articles You Might Have Missed