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Host 1
Indiana University strengthens tomorrow's workforce with practical, real world experience.
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Host 2
IU grads make a difference in your
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Host 1
community, serving as teachers, nurses, and engineers who rise to tomorrow's challenges and meet them. Learn more at iu.edu impact. All right, Tim, I have a question for you. Were you a mall rat? Yeah.
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Host 2
I mean, everyone in the 90s was a mall rat.
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Host 1
There wasn't that much to do in the 90s. Did you.
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Host 2
Southern California, 1990s malls. Yeah. Skateboarding.
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Host 1
Did you have a puka shell necklace?
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Host 2
I. For a very brief time, I did, and there might be pictures to prove it. Very brief. Yeah.
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Host 1
All right, we're going to. I'm a little sad we don't have those. I should have dug those out in advance.
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Host 2
Sixth grade. Seventh grade.
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Brianne Olson
All right.
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Host 1
We all make questionable fashion decisions in middle school. I mean, listen, they were the thing. And one of the it brands when we were in high school, of course, was PacSun. The company's gone through a lot of changes. They filed for bankruptcy in 2016, but now it's back. It's rebranded, and it's thriving. And it's capitalizing on a couple things, including this weird wave of millennial nostalgia and a new generation of shoppers who are more socially aware but no less fashionable than we were when we were their age. PacSun CEO Brianne Olson joins us now. Her book, co created Here We Go, We Got It Right Here, talks about the turnaround of the company and how much. To my joy, she says brick and mortar stores are not dead. They just need to reinvent themselves. Thank you so much for coming on. You were telling us at the break, you've been at the company a long time, and in your time, I think you said 17, 18 years. In that time, how has the company evolved into what it is now?
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Brianne Olson
Yeah, I've been at the company almost two decades, and when I joined, we were a surf skate legacy retailer. And today, after a transformation of almost two decades and a real focus on the power of co creation, we have successfully moved from being a retailer where pacsun's brand was just on the outside of the store to an actual brand that young people today love. And so 50% of what we sell in a PacSun store today now carries the PacSun label.
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Host 2
How does that work in a world where. And look, I'm gonna totally age myself here.
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Host 1
Oh, we've already. We're both there.
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Host 2
You know, when I. When I. When I drop my kids off at school, they're. They're young. They're three and seven. But When I drop them off at school, I walk by a middle school. And at the middle school, these kids literally are dressing like we used to dress when we were in middle school. It is crazy. It's like, yeah, the wide leg jeans like the same overs, sweatshirts like the platform chunky sandals. Here's the difference though. They are all glued to iPhones. And we didn't have that.
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Host 1
No.
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Host 2
And we didn't have that till relatively recently. Again, not to date myself. How do you reach a consumer that is glued to their phone?
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Brianne Olson
So, as a brand centered at the youth, I actually think all of these touch points from a digital standpoint offer us a real advantage if you lean in and meet the customer where they are. PacSun has 2 million followers on TikTok. We're on Reddit, we're on Discord, on IG. There's so many different ways to engage with the consumer today. YouTube shorts. And so I talk about it as this constant listening loop and listening feedback. If you want to know something in live time, you can just engage with the consumer. And so the premise of my book Co created is really about treating the consumer not like an audience. We're not marketing to them. We're not building product to then market to them. Instead, on the reverse, we're building with them. So we've brought the consumer in and we are actually co creating the future of our brand with these young people.
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Host 1
How does that work in the creator economy? We've seen so many brands kind of fumble those opportunities. Is there a specific strategy to taking advantage of people who are exciting about the brand and bringing them in in a way that feels not exploitive but, you know, communal and productive?
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Brianne Olson
Yeah, I think we've had tremendous success in the creator economy. And really the brand has to shift the notion of control. So you have to relinquish, but that's
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Host 1
really hard because you paid to have control.
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Brianne Olson
We have to relinquish some of the control and build what I call brand and community trust. And so by empowering these young people to be your storyteller, you are in essence enabling them not only to create economic ability for themselves, but also to storytell and amplify in a way that is otherwise impossible. And in 2023, a PacSun fan and customer, Lila Bick, based in Nashville, Tennessee, who had just amassed 5,000 followers on TikTok, went to her local Nashville store, bought a pair of jeans, created a video in her bedroom. She has 5,000 followers. She sold 11,000 pairs of jeans in the next 36 hours and so it's the power of the algorithm, it's the power of authentic storytelling and really allowing to lean into your community and empower them.
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Host 2
So on that. If you look at the Paxon website right now, there's a dozen vertical videos that talk about it says PACs unstyled by you. Are these coming from, how does this work? Like are these collaborations that you have with like actually actual normal people or are these like thought up in a marketing department and they're like made to look like they'd see vertical video? Like are these actually like co creators?
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Brianne Olson
The majority of the videos you would see on our site are actually co creation. So then we seek permission from those
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Host 1
creators, like folks will tag you and then you reach out.
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Brianne Olson
Absolutely. And on TikTok with the open creator platform, we actually don't select any of the people who are then advocating or promoting the brand they are selecting and we say everyone is welcome. And there's a real magic and synergy that happens in that.
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Host 2
We're speaking with Brianne Olson, the CEO of PacSun. She's the author of the new book Co Created the Cultural strategy that redefined PacSun. Christina's got it.
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Host 1
How do you. Wait, I'm looking at the wrong camera again. Sorry, it's not my usual studio. There it is, there it is. Talk to us about how you manage a brand turnaround. Because the company did file for bankruptcy in 2016 and you were there, you
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Host 2
were there pre bank bankruptcy and post
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Host 1
and retail turnarounds are hard partially because you do have a legacy that can either a good or a bad thing. Reinvention can be really difficult when customers have a certain way they think about your brand. How do you do that, how did you manage that and how do you think it's been successful?
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Brianne Olson
So I've been in the CEO role just over three years now and I've been with the brand 18 plus years. And so the turnaround I would say was absolutely a team effort and as you'll see in the book, co created the fingerprints and the stories of so many different people, brands, creators and you know, leaders within our organization and our brand associates are a part of this beautiful story of co creation. But the real honest truth is you have to do the inside work first. And we had to do a lot of re scrubbing of our structure, our internal organization, our operating system, how quickly we were getting product to market, the silos that had existed in our organization for a long time. And we did that by leading with purpose. And I think a purpose led brand can Perform better. And our results have followed from the moment we established our purpose, which is to inspire the next generation of youth and create community at the intersection of fashion, sport, art and music. We have really been able to rally both our internal teams and our external constituents, which include our community brands, creators, all of the stakeholders.
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Host 2
I want to talk about some of those stakeholders that you just mentioned, the brand specifically. If you 50% of what you're selling is PACs unlabeled and then how do you ensure the brands that they're going to be given, you know, both virtually and physically shelf space that has prominence?
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Brianne Olson
Yeah, I think listening to the consumer, leveraging data, leveraging our Youth Advisory council, leveraging our PACS on youth report, which surveys 6,000 young people. These are ways that we can listen in a more efficient way and then ensuring that we're being true to our purpose and our pillars. So we have a long standing relationship with the Metropolitan Museum of Art. The misconception is that young people don't care about the arts. But what we've been able to prove year after year is that actually young people do care about arts and they care about the fine arts and they care about self expression. And so we were very confident that this collaboration and co creation would work similar to Formula one. It's hot now, but we started working with Formula one almost four and a half, five years ago. So I think really ensuring that we're staying at the pace of culture and we're moving at the speed of culture ensures that we stay that one step ahead and ensures relevancy for the products and brands that we curate and bring into our store.
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Host 1
You said you have an annual youth report. What are some of the surprising takeaways when you read that report each year? What are some of the things that stand out that surprised you even though you've been in this business?
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Brianne Olson
Yeah. So last year in the Youth report, surveying 6,000 young people, Gen Alpha and Gen Z, one of the things that came out was that music is the most important piece of their life in terms of self expression and fashion. And so it ranks higher than fashion. And so I think music is this through line for people to express themselves and it's variable and fluid. Right. So I think that was a big kind of unlock. Another unlock was mental health. And mental health was both the largest challenge, but also opportunity. When you spoke to young people above physical health and academia. But if you really look at it, I think it actually shows true optimism because these younger generations are willing to lean in, they're vulnerable, they're having the conversations and they want to have the conversation also in the workplace. And so I think it's giving us an opportunity as brands and corporations to really rethink our social responsibility and how does that tie into our corporate responsibility? And so I think the youth report, from a data standpoint and deeply understanding the emotive reasons that consumers are shifting their buying pattern, shifting consumption patterns, was absolutely important to kind of strategizing our path forward.
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Host 2
We're going to talk more, we're going to do some news, and then we'll come back and talk more with you. Before we do that, though, I want to talk and we'll talk retail. Before we do that, though, I just want to go back to marketing and hear from you about the mix of organic marketing versus paid. Can you just give us like, what percentage goes is organic? What percentage is paid?
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Brianne Olson
We're at a pretty even 50, 50 split. And we did bring all of our paid teams in house, so we're not leveraging any agency.
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Host 1
That's interesting.
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Brianne Olson
And that is a big pivot and has proven to have significant results because the people working on the team are living and breathing the brand and listening to our consumers. So I think that's the biggest fundamental shift that we've made.
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Host 2
And then what are they doing on social media to find those, those reliable voices, those people you want to partner with?
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Brianne Olson
I think first, the first level of partnership is looking at who's already talking about your brand because they are the authentic storytellers. So that is usually our first step in identifying a collabor or co creator.
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Host 2
Okay, we got a few more minutes with you. I want to talk retail. I want to talk about the future of the company. Let's start with retail. Unlike some other companies in the last few years who have decreased their retail footprint, bricks and mortar footprint, I should say. You guys are actually opening stores. You opened 10 last year, you're opening 10 this year. What is the way to get consumers into the store? How do you do it?
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Brianne Olson
I think first of all, we open in areas and malls where we already have a high demand. So we look at the data, we cross the street.
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Host 2
I mean, there are fewer malls now. So, like, there's so many malls that don't exist anymore. They're empty malls.
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Brianne Olson
I think there's about 450 really great malls in the US and we're only in 305 of them. So when I look at the white space for expansion, where there's real customer demand for PacSun, there's still quite a bit of Runway there for us. And we saw last year our store traffic in our malls at PacSun was up 17%. And so clearly consumers are voting for PacSun. They want us to open stores and they're looking for experiential retail. So whether that's us showing up Trackside at Formula One in Austin or in Miami where it's unexpected, PacSun has a pop up store at the track, or it's what we're doing with get ready with Me the night before New Year's Eve and getting our consumers ready. We're bringing them in and meeting them where they are in their lives at that moment.
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Host 2
When did the Name Change from PacSun or from Pacific Sun? Where to Pacs on?
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Brianne Olson
About 15 years ago.
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Host 2
All right, so that's how old? That's how long?
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Host 1
I mean, I always called it PacSun. Did you call it the whole thing?
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Host 2
Yeah, I mean, that's what it was called.
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Brianne Olson
There's a fun.
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Host 1
You were alone in that, actually.
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Host 2
Oh, there is, yeah.
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Brianne Olson
There's a nostalgic throwback and younger people think it's really fun that we used to be called Pacific Sunwear. So we've brought it back through capsules and it's been great.
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Host 1
When you look at appealing to this youth customer, you're talking about in your survey, how they do care about the source of things, they do care about arts, they do care about ethics. I feel like that runs into a couple other market trends, including this love of like fast fashion. So how do you, how do you have those two competing wins? How do you make sure that you are keeping that genuineness and that ingenuity and that uniqueness and then also providing the number of items and the churn that these customers want.
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Brianne Olson
I think first of all, we have to acknowledge that the consumer is under some price pressures and cost pressures. And I think by acknowledging that, you also acknowledge that they might at some point shop at a brand that might be considered fast fashion.
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Host 1
Yeah.
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Brianne Olson
But that at PacSun is not what we stand for. We stand for quality first and foremost. Creating real exclusive product that means something to them and will last in their closet and giving it to them at the best value that we can. And so we recognize that fast, you know, the fast fashion shopping might be a part of that ecosystem, but we don't play into that lane.
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Host 2
PACSUN. Before we go, we got to talk business. PACSUN was a. A publicly traded company in the 1990s. It IPO'd, it went private and then filed for bankruptcy back in 2016. Are you on the path right now to become a public company again.
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Brianne Olson
We're certainly exploring that option.
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Host 2
Are you profitable now?
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Brianne Olson
We're profitable. We just came in near a billion dollars last year. That was from 700 plus million.
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Host 2
That's hot.
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Brianne Olson
Three years prior, top line, a billion dollars. So really exciting to see the growth. And the growth has been nice, nice and steady over the last three years. And we're seeing the growth across both genders and across a multitude of great brands, inclusive of the PacSun brands.
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Host 2
Brianne Olson, she's the CEO of PacSun. She's the author of the new book Co Created the Cultural Strategy that Redefined pacsun, joining us here in the Bloomberg Interactive Broker Studio. Congratulations on the book and thank you for joining us.
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Host 1
Thank you so much. And if you want to bring back the puka shell necklace, we know you have a model right here ready to go.
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