Pacific Sunwear of California Inc. filed for chapter 11 protection, the latest youth-oriented clothing chain to falter in an increasingly cut-throat retail environment, Bloomberg News reported today. Golden Gate Capital, a private equity firm that loaned $60 million to the retailer in 2011, has worked out a deal that will help PacSun avoid liquidation. The pre-packaged bankruptcy agreement involves swapping debt for equity after the retailer emerges from chapter 11. PacSun also will get financing to continue operating during the restructuring process. Without the deal, PacSun might have faced a total shutdown of the surfwear chain, which has struggled to adapt to shifting consumer tastes.
