10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q/A

(Amendment No. 1)

(Mark One)

    x     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: July 28, 2012

OR

    ¨     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 0-21296

PACIFIC SUNWEAR OF CALIFORNIA, INC.

(Exact name of registrant as specified in its charter)

California	95-3759463
(State of incorporation)	(I.R.S. Employer Identification No.)

3450 East Miraloma Avenue, Anaheim, CA 92806

(Address of principal executive offices and zip code)

(714) 414-4000

(Registrant’s telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer	¨	Accelerated Filer	x
Non-Accelerated Filer	¨  (Do not check if a smaller reporting company)	Smaller Reporting Company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

On August 27, 2012, the registrant had 67,823,841 shares of Common Stock outstanding.

Explanatory Note

Pacific Sunwear of California, Inc. is filing this Amendment No. 1 to our Quarterly Report on Form 10-Q (this “Amendment”) for the fiscal period ended July 28, 2012, originally filed on August 30, 2012 (the “Original Form 10-Q”), solely to correct a portion of the rendering of our XBRL Interactive Data File. Specifically, we are correcting the rendering of our Condensed Consolidated Statements of Operations and Comprehensive Operations.

No other changes have been made to the Original Form 10-Q, other than those described above. This Amendment does not reflect subsequent events that may have occurred after the filing date of the Original Form 10-Q or modify or update in any way disclosures made in the Original Form 10-Q, except as set forth in this Form 10-Q/A, and should be read in conjunction with the Original Form 10-Q.

ITEM 6. EXHIBITS

Exhibit #	Exhibit Description
31.1+	Certifications of Gary H. Schoenfeld and Michael W. Kaplan pursuant to section 302 of the Sarbanes-Oxley Act of 2002
32.1++	Certifications of Gary H. Schoenfeld and Michael W. Kaplan pursuant to section 906 of the Sarbanes-Oxley Act of 2002
101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema Document
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**	XBRL Taxonomy Extension Definition Document
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document

+ Previously filed as exhibit to Quarterly Report on Form 10-Q for the fiscal quarter ended July 28, 2012.

++ Previously furnished as exhibit to Quarterly Report on Form 10-Q for the fiscal quarter ended July 28, 2012.

** These interactive files are deemed not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and are otherwise not subject to liability under these sections.

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		PACIFIC SUNWEAR OF CALIFORNIA, INC. (Registrant)
Date: August 31, 2012	By:	/s/ MICHAEL W. KAPLAN
		Michael W. Kaplan
		Sr. Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)

3

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Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	Jul. 28, 2012
Commitments and Contingencies (Textual) [Abstract]
Litigation accrued amounts till reporting date	$ 0
Guarantees in the form of commercial letters of credit	28
Guarantee Obligations [Member]
Commitments and Contingencies (Textual) [Abstract]
Guarantees in the form of commercial letters of credit	$ 28

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Shareholders' Equity (Details 1) (USD $) In Thousands, except Share data, unless otherwise specified	6 Months Ended
	Jul. 28, 2012
Stock option (incentive and nonqualified) activity
Shares Outstanding at January 28, 2012	2,990,501
Weighted-Average Exercise Price Outstanding at January 28, 2012	$ 6.61
Granted Shares	20,500
Granted Weighted-Average Exercise Price	$ 1.71
Exercised Shares
Exercised Weighted-Average Exercise Price
Forfeited or expired Shares	(315,414)
Forfeited or Expired Share Weighted-Average Exercise Price	$ 12.86
Share Outstanding at July 28, 2012	2,695,587
Weighted-Average Exercise Price Outstanding at July 28, 2012	$ 5.85
Outstanding at July 28, 2012 Weighted-Average Remaining Contractual Term	4 years
Outstanding at July 28,2012 Aggregate Intrinsic Value	$ 178
Share, Vested and expected to vest at July 28, 2012	2,512,390
Vested and expected to vest at July 28, 2012 Weighted-Average Exercise Price	$ 6.01
Vested and expected to vest at July 28, 2012 Weighted-Average Remaining Contractual Term	4 years
Vested and expected to vest at July 28, 2012 Aggregate Intrinsic Value	169
Share Exercisable at July 28, 2012	1,346,857
Exercisable at July 28, 2012 Weighted-Average Exercise Price	$ 7.83
Exercisable at July 28, 2012 Weighted-Average Remaining Contractual Term	3 years 4 months 24 days
Exercisable at July 28, 2012 Aggregate Intrinsic Value	$ 143

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Impairment of Long-Lived Assets (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jul. 28, 2012	Jul. 30, 2011	Jul. 28, 2012	Jul. 30, 2011
Asset Impairment Charges
Impairment charges from continuing operations	$ 1,142	$ 3,100	$ 2,676	$ 5,118
Less: Impairment charges from discontinued operations		295		667
Total impairment charges	$ 1,142	$ 3,395	$ 2,676	$ 5,785

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Discontinued Operations (Details Textual)	3 Months Ended		6 Months Ended
	Jul. 28, 2012 Store	Apr. 30, 2011 Store	Jul. 28, 2012 Store	Jul. 30, 2011 Store
Discontinued Operations (Textual) [Abstract]
Underperforming stores	3	6	8	31

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Fair Value Measurements (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended	3 Months Ended
	Jul. 28, 2012	Jul. 28, 2012	Jul. 28, 2012 Fair Value, Measurements, Recurring [Member] Derivative Financial Instruments, Liabilities [Member] Series B Preferred Stock [Member]	Apr. 28, 2012 Fair Value, Measurements, Recurring [Member] Derivative Financial Instruments, Liabilities [Member] Series B Preferred Stock [Member]
Summary of derivative liability activity
Beginning balance as of January 28, 2012			$ 13,743	$ 20,076
Loss on change in fair value	(8,219)	(1,886)	8,219	(6,333)
Ending balance as of July 28, 2012			$ 21,962	$ 13,743

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Impairment of Long-Lived Assets

6 Months Ended

Jul. 28, 2012

Impairment of Long-Lived Assets [Abstract]

IMPAIRMENT OF LONG-LIVED ASSETS

4. IMPAIRMENT OF LONG-LIVED ASSETS

The Company assesses long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of such assets (or asset group) may not be recoverable. Based on management’s review of the historical operating performance, including sales trends, gross margin rates, current cash flows from operations and the projected outlook for each of the Company’s stores, the Company determined that certain stores would not be able to generate sufficient cash flows over the remaining term of the related leases to recover the Company’s investment in the respective stores. As a result, the Company recorded the following non-cash impairment charges related to its retail stores within the accompanying Condensed Consolidated Statements of Operations and Comprehensive Operations, to write-down the carrying value of its long-lived store assets to their estimated fair values.

	For the Second Quarter Ended				For the First Half Ended
	(In thousands)
	July 28, 2012		July 30, 2011		July 28, 2012		July 30, 2011
Impairment charges from continuing operations	$	1,142	$	3,100	$	2,676	$	5,118
Impairment charges from discontinued operations		—		295		—		667
Total impairment charges	$	1,142	$	3,395	$	2,676	$	5,785

	July 28, 2012		July 30, 2011
	(In thousands)
Carrying value of assets tested for impairment	$	9,016	$	27,688
Carrying value of assets with impairment	$	1,955	$	4,949
Fair value of assets impaired	$	813	$	1,554
Number of stores tested for impairment		166		187
Number of stores with impairment		23		28

The long-lived assets disclosed above that were written down to their respective fair values consisted primarily of leasehold improvements, furniture, fixtures and equipment. The Company recognized impairment charges of $1.1 million and $3.4 million, respectively, during the quarters ended July 28, 2012 and July 30, 2011 and $2.7 million and $5.8 million, respectively, during the first half ended July 28, 2012 and July 30, 2011. The decrease in the number of stores tested for impairment year-over-year was primarily related to the Company’s recent closure of certain underperforming stores. Based on historical operating performance and the projected outlook for these stores, the Company believes that the remaining asset value of approximately $8 million as of July 28, 2012, is recoverable. Additionally, the Company wrote off approximately $1 million of excess store fixtures in the second quarter of fiscal 2012.

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Other Current Liabilities (Details Textual) (USD $)			6 Months Ended
	Jul. 28, 2012	Jan. 28, 2012	Jul. 28, 2012 Series B Preferred Stock [Member]
Class of Stock [Line Items]
Convertible Series B Preferred Stock issued	1,000	1,000	1,000
Period of term loan			5 years
Senior secured term loan	$ 74,414,000	$ 73,910,000	$ 60,000,000
Fair value of Series B Preferred Stock			15,000,000
Other Current Liabilities (Textual) [Abstract]
Derivative fair value liability	$ 22,000,000

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Other Current Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Jul. 28, 2012	Jan. 28, 2012
Other current liabilities
Derivative liability	$ 21,962	$ 20,076
Accrued gift cards	7,701	10,776
Accrued compensation and benefits	14,484	10,687
Sales taxes payable	4,227	3,983
Deferred tax liability	2,201	2,201
Accrued capital expenditures	1,599	1,281
Other	22,717	19,365
Total other current liabilities	$ 74,891	$ 68,369

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Debt (Details) (USD $)	3 Months Ended		6 Months Ended				6 Months Ended		6 Months Ended		6 Months Ended		6 Months Ended					6 Months Ended		6 Months Ended
	Jul. 28, 2012	Jul. 30, 2011	Jul. 28, 2012 NumberOfPromissoryNote	Jul. 30, 2011	Jul. 28, 2012 Miraloma [Member]	Aug. 20, 2010 Miraloma [Member]	Jul. 28, 2012 Pacsun Stores [Member]	Aug. 20, 2010 Pacsun Stores [Member]	Jul. 28, 2012 Term Loan [Member]	Aug. 20, 2010 Notes Payable, Other Payables [Member]	Jul. 28, 2012 Notes Payable, Other Payables [Member] Miraloma [Member]	Aug. 20, 2010 Notes Payable, Other Payables [Member] Miraloma [Member]	Jul. 28, 2012 Notes Payable, Other Payables [Member] Pacsun Stores [Member]	Aug. 20, 2010 Notes Payable, Other Payables [Member] Pacsun Stores [Member]	Dec. 07, 2012 Cash [Member] Term Loan [Member]	Jul. 28, 2012 Cash [Member] Term Loan [Member]	Dec. 07, 2012 Paid In Kind [Member] Term Loan [Member]	Jul. 28, 2012 Revolving Credit Facility [Member]	Dec. 07, 2012 Revolving Credit Facility [Member]	Jul. 28, 2012 Swing Line Loan Facility [Member]
Debt (Textual) [Abstract]
Maximum borrowing capacity										$ 29,800,000		$ 16,800,000		$ 13,000,000					$ 100,000,000	$ 12,500,000
Revolving credit facility term																		5 years
New credit facility Maturity Date																				Dec. 07, 2016
Revolving credit facility interest rate description																		Borrowings under the New Credit Facility bear interest at a floating rate which, at the Company's option, may be determined by reference to a LIBOR Rate or a Base Rate (as defined in the New Credit Facility, 04.0% as of July 28, 2012).
Revolving credit facility reference to floating interest rate																		400.00%
Direct borrowing outstanding																				0
Interest rate												6.50%		6.50%	5.50%		7.50%
Interest payable																3,000,000
Maturity date									Dec. 07, 2016		Sep. 01, 2017		Sep. 01, 2017
Periodic payment											113,435		87,777
Notes payable amortization schedule period.					25 years		25 years
Notes payable outstanding principal and unpaid interest.						14,400,000		11,200,000
Portion of prepayment fees equals to principal amount of notes.						1.00%		1.00%
Period for prepayment of note without penalty					30 days		30 days
Debt (Additional Textual) [Abstract]
Letter of credit outstanding	28,000,000		28,000,000
Remaining availability under new credit facility	62,000,000		62,000,000
Number of promissory note			2
Interest expense	$ 3,500,000	$ 600,000	$ 6,800,000	$ 1,100,000

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Income Taxes (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jul. 28, 2012
Income Taxes (Textual) [Abstract]
Net state deferred tax assets	$ 5
Ownership change monitor description	Full valuation allowance was established during the fourth quarter of fiscal 2009 and continues to be maintained on all federal and the majority of state deferred tax assets
Ownership change under Internal Revenue Code	0.00%

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Summary of Significant Accounting Policies

6 Months Ended

Jul. 28, 2012

Summary of Significant Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Information regarding significant accounting policies is contained in Note 1, “Nature of Business and Summary of Significant Accounting Policies,” of the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for fiscal 2011. Presented below in the following notes is supplemental information that should be read in conjunction with “Notes to Consolidated Financial Statements” included in that Report.

Income Taxes

The Company calculates its interim income tax provision in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 270, “Interim Reporting” (“ASC 270”) and ASC Topic 740, “Accounting for Income Taxes” (“ASC 740”). At the end of each interim period, the Company estimates the annual effective tax rate and applies that rate to its ordinary quarterly earnings. The tax expense or benefit related to significant, unusual, or extraordinary items is recognized in the interim period in which those items occur. In addition, the effect of changes in enacted tax laws, rates or tax status is recognized in the interim period in which the change occurs. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including the expected operating income for the year, permanent and temporary differences as a result of differences between amounts measured and recognized in accordance with tax laws and financial accounting standards, and the likelihood of recovering deferred tax assets generated in the current fiscal year. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or the tax environment changes.

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Shareholders' Equity (Details) (USD $)	6 Months Ended
	Jul. 28, 2012	Jul. 30, 2011
Employee Stock Option [Member]
Weighted- average assumptions for determining Fair value
Expected life	4 years	4 years
Expected volatility		83.00%
Expected dividends
Employee Stock Option [Member] | Maximum [Member]
Weighted- average assumptions for determining Fair value
Expected volatility	88.00%
Risk-free interest rate	0.92%	1.61%
Employee Stock Option [Member] | Minimum [Member]
Weighted- average assumptions for determining Fair value
Expected volatility	87.00%
Risk-free interest rate	0.53%	1.24%
ESPP [Member]
Weighted- average assumptions for determining Fair value
Expected life	6 months	6 months
Expected volatility	71.00%	54.00%
Risk-free interest rate	0.15%	20.00%
Expected dividends

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Segment Reporting (Details Textual)	6 Months Ended
	Jul. 28, 2012 Segment
Segment Reporting (Textual) [Abstract]
Number of operating segments	3

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Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Jul. 28, 2012	Jan. 28, 2012
CURRENT ASSETS:
Cash and cash equivalents	$ 34,830	$ 50,306
Restricted cash	405	8,593
Merchandise inventories	144,797	88,740
Prepaid expenses	17,165	15,506
Other current assets	6,366	6,272
Total current assets	203,563	169,417
Property and equipment, net	137,440	149,716
Deferred income taxes	6,643	6,643
Other assets	28,487	29,355
TOTAL ASSETS	376,133	355,131
CURRENT LIABILITIES:
Accounts payable	85,852	38,914
Other current liabilities	74,891	68,369
Total current liabilities	160,743	107,283
LONG-TERM LIABILITIES:
Deferred lease incentives	16,728	17,681
Deferred rent	16,517	16,602
Long-term debt	74,414	73,910
Other long-term liabilities	26,201	26,558
Total long-term liabilities	133,860	134,751
Commitments and contingencies (Note 10)
SHAREHOLDERS' EQUITY:
Preferred stock, $0.01 par value; 5,000,000 shares authorized; 1,000 issued and outstanding
Common stock, $0.01 par value; 170,859,375 shares authorized; 67,823,617 and 67,511,468 shares issued and outstanding, respectively	678	675
Additional paid-in capital	18,357	16,766
Retained earnings	62,495	95,656
Total shareholders' equity	81,530	113,097
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 376,133	$ 355,131

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Nature of Business

6 Months Ended

Jul. 28, 2012

Nature of Business and Basis of Presentation [Abstract]

NATURE OF BUSINESS

1. NATURE OF BUSINESS

Pacific Sunwear of California, Inc. (together with its wholly-owned subsidiaries, the “Company” or “PacSun”) is a leading specialty retailer rooted in the action sports, fashion and music influences of the California lifestyle. The Company sells a combination of branded and proprietary casual apparel, accessories and footwear designed to appeal to teens and young adults. It operates a nationwide, primarily mall-based chain of retail stores under the names “Pacific Sunwear” and “PacSun.” In addition, the Company operates an e-commerce website at www.pacsun.com which sells PacSun merchandise online, provides content and community for its target customers and provides information about the Company. The Company, a California corporation, was incorporated in August 1982. As of July 28, 2012, the Company leased and operated 727 stores in each of the 50 states and Puerto Rico.

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Shareholders' Equity (Details Textual) (USD $)	6 Months Ended		12 Months Ended	6 Months Ended										3 Months Ended		6 Months Ended
	Jul. 28, 2012	Jul. 30, 2011	Jan. 28, 2012	Jul. 28, 2012 Stock Options [Member]	Jul. 28, 2012 Restricted Stock [Member]	Jul. 30, 2011 Restricted Stock [Member]	Jul. 28, 2012 Restricted Stock Units (RSUs) [Member]	Jul. 28, 2012 Maximum [Member]	Jul. 28, 2012 Minimum [Member]	Jul. 28, 2012 Performance Plan [Member]	Jul. 28, 2012 Performance Plan [Member] Restricted Stock [Member]	Jul. 30, 2011 Performance Plan [Member] Restricted Stock [Member]	Jul. 28, 2012 Performance Plan [Member] Performance Shares [Member]	Jul. 28, 2012 Performance Plan [Member] Restricted Stock Units (RSUs) [Member]	Jul. 30, 2011 Performance Plan [Member] Restricted Stock Units (RSUs) [Member]	Jul. 28, 2012 Performance Plan [Member] Restricted Stock Units (RSUs) [Member]	Jul. 30, 2011 Performance Plan [Member] Restricted Stock Units (RSUs) [Member]	Jul. 28, 2012 Series B Preferred Stock [Member]
Shareholders' Equity (Textual) [Abstract]
Exercise price of series B preferred shares																		1.75
Period in which stock option expires under condition one								10 years	7 years
Maximum number of shares of the Company's common stock that was available for award grants under the Performance Plan										2,100,000
Termination date of the Performance Plan										Mar. 22, 2015
Vesting period of restricted stock								4 years	3 years		4 years
Stock option expiration conditions				Expire in seven to ten years or three months after termination of employment with the Company.
Time-based restriction as to vesting											Four years with 25% of the grant vesting each year on the anniversary of the grant date.					Awards generally vest 100% on the first anniversary of the grant date.
Restricted stock award vesting percentage per year											25.00%
Shares which only vest upon the achievement of certain performance-based financial targets							125,000				1,495,782		675,000
Weighted-average grant-date fair value granted							$ 1.57				$ 1.76	$ 3.53
Fair value of awards vested					$ 500,000	$ 900,000										$ 1,770,000	$ 0
Restricted stock units vesting percentage per year																100.00%
Stock-based compensation expense	1,466,000	1,736,000												600,000	700,000	1,400,000	1,700,000
Compensation cost related to nonvested stock options, restricted stock awards and restricted stock units not yet recognized														4,300,000		4,300,000
Stock-based compensation expense is expected to be recognized over a weighted-average period					3 years 6 months											2 years 7 months 6 days
Shareholders' Equity (Additional Textual) [Abstract]
Common Stock issued to landlords			900,000
Common Stock issued to landlords, fair value			1,600,000
Right to purchase common stock	13,500,000
Stock-based awards vesting period	1 year
Period in which stock option expires under condition	3 months
Weighted-average grant-date fair value per share of options granted	$ 1.71	$ 1.96
Intrinsic value of stock options exercised	$ 0	$ 100,000
Percentage of discount in purchasing common stock from fair market value under ESPP	10.00%
Purchasing period of stock under ESPP	6 months
Shares issued under ESPP	114,897	95,798
Average price at which shares issued under ESPP	$ 1.58	$ 2.35

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Fair Value Measurements (Tables)

6 Months Ended

Jul. 28, 2012

Fair Value Measurements [Abstract]

Summary of fair value assumptions for derivative liabilities

	July 28, 2012			April 28. 2012
Conversion price	$	1.75		$	1.75
Expected volatility		66	%		65	%
Expected term (in years)		9.3			9.6
Risk free interest rate		1.58	%		1.96	%
Expected dividends	$	—		$	—

Summary of derivative liability activity

The following table presents the activity recorded for the derivative liability during the first half ended:

	July 28, 2012
	(In thousands)
Beginning balance as of January 28, 2012	$	20,076
Gain on change in fair value		(6,333	)
Balance as of April 28, 2012		13,743
Loss on change in fair value		8,219
Ending balance as of July 28, 2012	$	21,962

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Fair Value Measurements (Details) (Derivative Financial Instruments, Liabilities [Member], Series B Preferred Stock [Member], Fair Value, Inputs, Level 3 [Member], Fair Value, Measurements, Recurring [Member], USD $)	3 Months Ended	6 Months Ended
	Apr. 28, 2012	Jul. 28, 2012
Derivative Financial Instruments, Liabilities [Member] | Series B Preferred Stock [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Summary of fair value assumptions for derivative liabilities
Conversion price	$ 1.75	$ 1.75
Expected volatility	65.00%	66.00%
Expected term (in years)	9 years 7 months 6 days	9 years 3 months 18 days
Risk free interest rate	1.96%	1.58%
Expected dividends

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Nature of Business (Details Textual)	Jul. 28, 2012 States Store
Nature of Business (Textual) [Abstract]
Number of stores leased and operated in each state	727
Number of states	50

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Basis of Presentation

6 Months Ended

Jul. 28, 2012

Nature of Business and Basis of Presentation [Abstract]

BASIS OF PRESENTATION

2. BASIS OF PRESENTATION

The accompanying Condensed Consolidated Financial Statements are unaudited and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted.

These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2012 (“fiscal 2011”) filed with the SEC. The Condensed Consolidated Financial Statements include the accounts of Pacific Sunwear of California, Inc. and its wholly-owned subsidiaries (Pacific Sunwear Stores Corp., a California corporation (“PacSun Stores”) and Miraloma Borrower Corporation, a Delaware corporation (“Miraloma”)). All intercompany transactions have been eliminated in consolidation.

In the opinion of management, all adjustments consisting only of normal recurring entries necessary for a fair presentation have been included. The preparation of Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements as well as the reported revenues and expenses during the reporting period. Actual results could differ from these estimates. The results of operations for the Company’s fiscal quarter ended July 28, 2012 are not necessarily indicative of the results that may be expected for the fiscal year ending February 2, 2013 (“fiscal 2012”).

The results of continuing operations for all periods presented in these Condensed Consolidated Financial Statements exclude the financial impact of discontinued operations. See Note 12, “Discontinued Operations” for further discussion related to discontinued operations presentation.

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)	Jul. 28, 2012	Jan. 28, 2012
Condensed Consolidated Balance Sheets [Abstract]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	1,000	1,000
Preferred stock, shares outstanding	1,000	1,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	170,859,375	170,859,375
Common stock, shares issued	67,823,617	67,511,468
Common stock, shares outstanding	67,823,617	67,511,468

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Discontinued Operations

6 Months Ended

Jul. 28, 2012

Discontinued Operations [Abstract]

DISCONTINUED OPERATIONS

12. DISCONTINUED OPERATIONS

In accordance with ASC Topic 205, “Presentation of Financial Statements- Discontinued Operations” (“ASC 205”), the Company has presented the results of operations of its closed stores as discontinued operations for all periods presented. The Company closed 3 and 6 underperforming stores in the second quarter of fiscal 2012 and 2011, respectively, and during the first half of fiscal 2012 and 2011, the Company closed 8 and 31 underperforming stores, respectively. If the cash flow of the closed store was determined not to be significant to ongoing operations, and the cash inflows of nearby stores were not expected to increase significantly, the results of operations of the closed store are included in discontinued operations. The following table details the operating results included in discontinued operations for the periods presented:

	For the Second Quarter Ended July 30, 2011			For the First Half  Ended July 30, 2011
Net sales	$	13,983		$	27,856
Cost of goods sold, including buying, distribution and occupancy costs		11,840			23,416
Gross margin		2,143			4,440
Selling, general and administrative expenses		3,998			9,183
Operating loss		(1,855	)		(4,743	)
Income taxes		48			122
Loss from discontinued operations	$	(1,807	)	$	(4,621	)

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Document and Entity Information	6 Months Ended
	Jul. 28, 2012	Aug. 27, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	PACIFIC SUNWEAR OF CALIFORNIA INC
Entity Central Index Key	0000874841
Document Type	10-Q
Document Period End Date	Jul. 28, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--01-28
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		67,823,841

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jul. 28, 2012

Summary of Significant Accounting Policies [Abstract]

Income Taxes

Income Taxes

The Company calculates its interim income tax provision in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 270, “Interim Reporting” (“ASC 270”) and ASC Topic 740, “Accounting for Income Taxes” (“ASC 740”). At the end of each interim period, the Company estimates the annual effective tax rate and applies that rate to its ordinary quarterly earnings. The tax expense or benefit related to significant, unusual, or extraordinary items is recognized in the interim period in which those items occur. In addition, the effect of changes in enacted tax laws, rates or tax status is recognized in the interim period in which the change occurs. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including the expected operating income for the year, permanent and temporary differences as a result of differences between amounts measured and recognized in accordance with tax laws and financial accounting standards, and the likelihood of recovering deferred tax assets generated in the current fiscal year. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or the tax environment changes.

Stock Compensation

Stock Options

The Company accounts for stock-based compensation expense in accordance with ASC Topic 718, “Stock Compensation” (“ASC 718”). The Company uses the Black-Scholes option-pricing model to estimate the grant date fair value of its stock-based compensation expense. Forfeitures are estimated at the date of grant based on historical rates and reduce the compensation expense to be recognized during the vesting period. The expected term of options granted is derived primarily from historical data on employee exercises adjusted for expected changes to option terms, if any. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the date of grant. Expected volatility is based primarily on the historical volatility of the Company’s common stock. The Company records stock-based compensation expense using the straight-line method over the vesting period, which is generally three to four years. The Company’s stock-based awards generally begin vesting one year after the grant date and, for stock options, expire in seven to ten years or three months after termination of employment with the Company. The Company’s stock-based compensation expense resulted from awards of stock options, restricted stock, and stock appreciation rights, as well as from shares issued under the ESPP.

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Condensed Consolidated Statements of Operations and Comprehensive Operations (Unaudited) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jul. 28, 2012	Jul. 30, 2011	Jul. 28, 2012	Jul. 30, 2011
Condensed Consolidated Statements of Operations and Comprehensive Operations [Abstract]
Net sales	$ 210,305	$ 200,915	$ 384,129	$ 372,796
Cost of goods sold, including buying, distribution and occupancy costs	152,506	153,578	285,344	292,267
Gross margin	57,799	47,337	98,785	80,529
Selling, general and administrative expenses	63,508	63,842	122,774	124,798
Operating loss	(5,709)	(16,505)	(23,989)	(44,269)
Loss on derivative liability	8,219		1,886
Other expense, net	3,454	571	6,763	1,113
Loss from continuing operations before income taxes	(17,382)	(17,076)	(32,638)	(45,382)
Income taxes	156	376	523	726
Loss from continuing operations	(17,538)	(17,452)	(33,161)	(46,108)
Loss from discontinued operations, net of income taxes		(1,807)		(4,621)
Net loss	(17,538)	(19,259)	(33,161)	(50,729)
Comprehensive loss	$ (17,538)	$ (19,259)	$ (33,161)	$ (50,729)
Loss from continuing operations per share:
Basic and Diluted	$ (0.26)	$ (0.26)	$ (0.49)	$ (0.70)
Loss from discontinued operations per share:
Basic and Diluted		$ (0.03)		$ (0.07)
Net loss per share:
Basic and Diluted	$ (0.26)	$ (0.29)	$ (0.49)	$ (0.77)
Weighted-average shares outstanding:
Basic and Diluted	67,738,453	66,343,761	67,661,643	66,273,810

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Income Taxes

6 Months Ended

Jul. 28, 2012

Income Taxes [Abstract]

INCOME TAXES

7. INCOME TAXES

The provisions codified within ASC 740 require companies to assess whether valuation allowances should be established against their deferred tax assets based on consideration of all available evidence using a “more likely than not” standard. In accordance with ASC 740, a full valuation allowance was established during the fourth quarter of fiscal 2009 and continues to be maintained on all federal and the majority of state deferred tax assets. Remaining net state deferred tax assets of approximately $5 million were not reserved as the Company concluded it is more likely than not that these net deferred tax assets would be utilized before expiration. The Company has discontinued recognizing federal and certain state income tax benefits until it is determined that it is more likely than not that the Company will generate sufficient taxable income to realize the deferred income tax assets.

The Company continues to monitor whether an ownership change has occurred under Internal Revenue Code Section 382 (“Section 382”). Based on available information at the reporting date, the Company believes it has not experienced an ownership change through the quarter ended July 28, 2012. The determination of whether or not an ownership change under Section 382 has occurred requires the Company to evaluate certain acquisitions and dispositions of ownership interests over a rolling three-year period. As a result, future acquisitions and dispositions could result in an ownership change of the Company under Section 382. If an ownership change were to occur, the Company’s ability to utilize federal net operating loss carryforwards could be severely limited.

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Debt

6 Months Ended

Jul. 28, 2012

Debt [Abstract]

DEBT

6. DEBT

Credit Facility

On December 7, 2011, the Company entered into a new five-year, $100 million revolving credit facility with Wells Fargo Bank, N.A (the “New Credit Facility”), which replaced the Company’s previous revolving credit facility with JPMorgan Chase (the “Former Credit Facility”). Borrowings under the New Credit Facility bear interest at a floating rate which, at the Company’s option, may be determined by reference to a LIBOR Rate or a Base Rate (as defined in the New Credit Facility, 4.0% as of July 28, 2012). Extensions of credit under the New Credit Facility are limited to a borrowing base consisting of specified percentages of eligible categories of assets. The New Credit Facility is available for direct borrowings and allows for the issuance of letters of credit, and up to $12.5 million is available for swing-line loans. The New Credit Facility is secured by liens and security interests with (a) a first priority security interest in the current and certain related assets of the Company including cash, cash equivalents, deposit accounts, securities accounts, credit card receivables and inventory, and (b) a second priority security interest in all assets and properties of the Company that are not secured by a first lien and security interest. The New Credit Facility also contains covenants that, subject to specified exceptions, restrict the Company’s ability to, among other things, incur additional indebtedness, incur liens, liquidate or dissolve, sell, transfer, lease or dispose of assets, or make loans, investments or guarantees. The New Credit Facility is scheduled to mature on December 7, 2016. Based on current forecasts and plans for the year, the Company believes that cash flows from operating activities, working capital, borrowing availability under the New Credit Facility, and cash on hand resulting from the closing of the Term Loan and the two mortgage transactions discussed below will be sufficient to meet its operating and capital expenditure needs for the next twelve months. However, if the Company were to experience same-store sales declines similar to those that occurred in fiscal 2010 and 2009, it may be required to access most, if not all, of the New Credit Facility and would potentially require other sources of financing to fund its operations, which sources might not be available. At July 28, 2012, the Company had no direct borrowings and $28 million in letters of credit outstanding under the New Credit Facility. The remaining availability under the New Credit Facility at July 28, 2012 was $62 million. The Company is not subject to any financial covenant restrictions under the New Credit Facility.

Term Loan

On December 7, 2011, the Company obtained the Term Loan funded by an affiliate of Golden Gate Capital. The Term Loan bears interest at a rate of 5.5% per annum to be paid in cash, due and payable quarterly in arrears, and 7.5% per annum, due and payable in kind (“PIK”) annually in arrears, with such PIK interest then due and payable being added to the outstanding principal balance of the Term Loan at the end of each fiscal year, and with adjustments to the cash and PIK portion of the interest rate in accordance with the Term Loan agreement, following principal prepayments. Annual cash interest for fiscal 2012 is expected to be approximately $3 million. The Term Loan is guaranteed by each of the Company’s subsidiaries and will be guaranteed by any future domestic subsidiaries of the Company. The Term Loan is secured by liens and security interests with (a) a first priority security interest in all long-term assets of the Company and PacSun Stores and all other assets not subject to a first lien and security interest pursuant to the New Credit Facility, (b) a first priority pledge of the equity interests of Miraloma and (c) a second priority security interest in all assets of the Company and PacSun Stores subject to a first lien and security interest pursuant to the New Credit Facility. The Term Loan also contains covenants substantially identical to those in the New Credit Facility. The principal balance and any unpaid interest related to the Term Loan is due on December 7, 2016. The Company is not subject to any financial covenant restrictions under the Term Loan.

Mortgage Debt

On August 20, 2010, the Company, through its wholly-owned subsidiaries, Miraloma and PacSun Stores, executed two promissory notes pursuant to which borrowings in an aggregate amount of $29.8 million from American National Insurance Company (“Anico”) were incurred. The note executed by Miraloma (the “Miraloma Note”) is in the amount of $16.8 million and bears interest at the rate of 6.50% per annum. Monthly principal and interest payments under the Miraloma Note commenced on October 1, 2010, and are $113,435. The principal and interest payments are based on a 25-year amortization schedule. The remaining principal balance of the Miraloma Note, and any accrued but unpaid interest thereon (estimated to be $14.4 million), will be due in full on September 1, 2017. The Miraloma Note is secured by a deed of trust on the building and land comprising the Company’s principal executive offices in Anaheim, California and is non-recourse to the Company. The Miraloma Note does not contain any financial covenants. In connection with this transaction, the Company transferred the building and related land securing the Miraloma Note to Miraloma and entered into a lease for the building and land with Miraloma. Miraloma paid a prepayment fee to Anico equal to 1% of the principal amount of the Miraloma Note on the closing date of the transaction. As a result, Miraloma may prepay the Miraloma Note, in whole, but not in part, at any time without penalty upon 30 days prior written notice to Anico.

The note executed by PacSun Stores (the “PacSun Stores Note”) is in the amount of $13.0 million and bears interest at the rate of 6.50% per annum. Monthly principal and interest payments under the PacSun Stores Note commenced on October 1, 2010, and are $87,777. The principal and interest payments are based on a 25-year amortization schedule. The remaining principal balance of the PacSun Stores Note, and any accrued but unpaid interest thereon (estimated to be $11.2 million), will be due in full on September 1, 2017. The PacSun Stores Note is secured by a mortgage on the Company’s leasehold interest in the building and land comprising the Company’s distribution center in Olathe, Kansas, and is unconditionally guaranteed by the Company. The PacSun Stores Note does not contain any financial covenants. PacSun Stores paid a prepayment fee to Anico equal to 1% of the principal amount of the PacSun Stores Note on the closing date of the transaction. As a result, PacSun Stores may prepay the PacSun Stores Note, in whole, but not in part, at any time without penalty upon 30 days prior written notice to Anico.

The Company recorded interest expense of $3.5 million and $0.6 million during the second quarter of fiscal 2012 and 2011, respectively, and $6.8 million and $1.1 million during the first half of fiscal 2012 and 2011, respectively.

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Discontinued Operations (Tables)

6 Months Ended

Jul. 28, 2012

Discontinued Operations [Abstract]

Details of operating results included in discontinued operations

	For the Second Quarter Ended July 30, 2011			For the First Half  Ended July 30, 2011
Net sales	$	13,983		$	27,856
Cost of goods sold, including buying, distribution and occupancy costs		11,840			23,416
Gross margin		2,143			4,440
Selling, general and administrative expenses		3,998			9,183
Operating loss		(1,855	)		(4,743	)
Income taxes		48			122
Loss from discontinued operations	$	(1,807	)	$	(4,621	)

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Impairment of Long-Lived Assets (Tables)

6 Months Ended

Jul. 28, 2012

Impairment of Long-Lived Assets [Abstract]

Long Lived Assets Tested For Impairment

the Company recorded the following non-cash impairment charges related to its retail stores within the accompanying Condensed Consolidated Statements of Operations and Comprehensive Operations, to write-down the carrying value of its long-lived store assets to their estimated fair values.

	For the Second Quarter Ended				For the First Half Ended
	(In thousands)
	July 28, 2012		July 30, 2011		July 28, 2012		July 30, 2011
Impairment charges from continuing operations	$	1,142	$	3,100	$	2,676	$	5,118
Impairment charges from discontinued operations		—		295		—		667
Total impairment charges	$	1,142	$	3,395	$	2,676	$	5,785

Details of Long Lived Assets Tested and Impaired

	July 28, 2012		July 30, 2011
	(In thousands)
Carrying value of assets tested for impairment	$	9,016	$	27,688
Carrying value of assets with impairment	$	1,955	$	4,949
Fair value of assets impaired	$	813	$	1,554
Number of stores tested for impairment		166		187
Number of stores with impairment		23		28

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Commitments and Contingencies

6 Months Ended

Jul. 28, 2012

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

10. COMMITMENTS AND CONTINGENCIES

Litigation

Charles Pfeiffer, individually and on behalf of other aggrieved employees vs. Pacific Sunwear of California, Inc. and Pacific Sunwear Stores Corp., Superior Court of California, County of Riverside, Case No. 1100527. On January 13, 2011, the plaintiff in this matter filed a lawsuit against the Company alleging violations of California’s wage and hour, overtime, meal break and rest break rules and regulations, among other things. The complaint seeks an unspecified amount of damages and penalties. The Company has filed an answer denying all allegations regarding the plaintiff’s claims and asserting various defenses. The Company is currently in the discovery phase of this case. As the ultimate outcome of this matter is uncertain no amounts have been accrued by the Company as of the date of this report. Depending on the actual outcome of this case, provisions could be recorded in the future which may have a material adverse effect on the Company’s operating results.

Tamara Beeney, individually and on behalf of other members of the general public similarly situated vs. Pacific Sunwear of California, Inc. and Pacific Sunwear Stores Corporation, Superior Court of California, County of Orange, Case No. 30-2011-00459346-CU-OE-CXC. On March 18, 2011, the plaintiff in this matter filed a putative class action lawsuit against the Company alleging violations of California’s wage and hour, overtime, meal break and rest break rules and regulations, among other things. The complaint seeks class certification, the appointment of the plaintiff as class representative, and an unspecified amount of damages and penalties. The Company has filed an answer denying all allegations regarding the plaintiff’s claims and asserting various defenses. The Company is currently in the discovery phase of this case. As the ultimate outcome of this matter is uncertain, no amounts have been accrued by the Company as of the date of this report. Depending on the actual outcome of this case, provisions could be recorded in the future which may have a material adverse effect on the Company’s operating results.

Phillip Gleason, on behalf of himself and others similarly situated vs. Pacific Sunwear of California, Inc., Superior Court of California, County of Los Angeles, Case No. 457654. On March 21, 2011, the plaintiff in this matter filed a putative class action lawsuit against the Company alleging violations of California’s wage and hour, overtime, meal break and rest break rules and regulations, among other things. The complaint sought class certification, the appointment of the plaintiff as class representative, and an unspecified amount of damages and penalties. On May 25, 2012, the Company settled Mr. Gleason’s claims for a nominal sum and the complaint was dismissed with prejudice as to such claims on August 21, 2012.

The Company is also involved from time to time in other litigation incidental to its business. The Company believes that the outcome of current litigation will not likely have a material adverse effect on its results of operations or financial condition and, from time to time, the Company may make provisions for probable litigation losses. Depending on the actual outcome of pending litigation, charges in excess of any provisions could be recorded in the future, which may have a material adverse effect on the Company’s operating results.

Indemnities, Commitments and Guarantees

During the normal course of business, the Company agreed to certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. These indemnities, commitments and guarantees include those given to various lessors in connection with facility leases for certain claims arising from such facility or lease and indemnities to directors and officers of the Company to the maximum extent permitted under the laws of the State of California. The duration of these indemnities, commitments and guarantees varies, and in certain cases, is indefinite. The majority of these indemnities, commitments and guarantees do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. The Company has not recorded any liability for these indemnities, commitments and guarantees in the accompanying consolidated balance sheets other than as disclosed below.

Letters of Credit

The Company has issued guarantees in the form of commercial letters of credit, of which there were approximately $28 million outstanding at July 28, 2012, as security for merchandise shipments from overseas. All in-transit merchandise covered by letters of credit is accrued for in accounts payable.

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Shareholders' Equity

6 Months Ended

Jul. 28, 2012

Shareholders' Equity [Abstract]

SHAREHOLDERS' EQUITY

8. SHAREHOLDERS’ EQUITY

Common Stock

In connection with certain lease modifications during fiscal 2011, the Company issued 900,000 shares of its common stock to one of its landlords. The fair value on the date of issuance was approximately $1.6 million, which is being amortized on a straight-line basis as a component of occupancy costs over the respective rent reduction period.

Preferred Stock

In conjunction with the Term Loan, the Company issued the Series B Preferred to an affiliate of Golden Gate Capital which, based on the initial conversion ratio, gives that affiliate the right to purchase up to 13.5 million shares of the Company’s common stock. The Series B Preferred shares have an exercise price initially equal to $1.75 per share of the Company’s underlying common stock. The initial holder of the Series B Preferred is entitled to customary registration rights with respect to the underlying common stock. See Note 9, “Fair Value Measurements – Recurring Fair Value Measurements” for further discussion on the accounting treatment of the Series B Preferred.

Stock-Based Compensation

The Company maintains two stock-based incentive plans: (1) the 2005 Performance Incentive Plan (the “Performance Plan”) and (2) the amended and restated Employee Stock Purchase Plan (the “ESPP”). The types of awards that may be granted under the Performance Plan include stock options, stock appreciation rights, restricted stock, and other forms of awards granted or denominated in the Company’s common stock or units of the Company’s common stock. Persons eligible to receive awards under the Performance Plan include officers or employees of the Company or any of its subsidiaries, directors of the Company and certain consultants and advisors to the Company or any of its subsidiaries. The vesting of awards under the Performance Plan is determined at the date of grant. Each award expires on a date determined at the date of grant; however, the maximum term of options and stock appreciation rights under the Performance Plan is ten years after the grant date of the award. As of July 28, 2012, the maximum number of shares of the Company’s common stock that was available for award grants under the Performance Plan was 2.1 million shares. Any shares subject to awards under prior stock plans that are canceled, forfeited or otherwise terminate without having vested or been exercised, as applicable, will become available for other award grants under the Performance Plan. The Performance Plan will terminate on March 22, 2015, unless terminated earlier by the Company’s Board of Directors.

Stock Options

The Company accounts for stock-based compensation expense in accordance with ASC Topic 718, “Stock Compensation” (“ASC 718”). The Company uses the Black-Scholes option-pricing model to estimate the grant date fair value of its stock-based compensation expense. Forfeitures are estimated at the date of grant based on historical rates and reduce the compensation expense to be recognized during the vesting period. The expected term of options granted is derived primarily from historical data on employee exercises adjusted for expected changes to option terms, if any. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the date of grant. Expected volatility is based primarily on the historical volatility of the Company’s common stock. The Company records stock-based compensation expense using the straight-line method over the vesting period, which is generally three to four years. The Company’s stock-based awards generally begin vesting one year after the grant date and, for stock options, expire in seven to ten years or three months after termination of employment with the Company. The Company’s stock-based compensation expense resulted from awards of stock options, restricted stock, and stock appreciation rights, as well as from shares issued under the ESPP.

The fair value of the Company’s stock-based compensation activity was determined using the following weighted- average assumptions:

	For the First Half Ended
	July 28, 2012						July 30, 2011
	Stock Options			ESPP			Stock Options			ESPP
Expected life		4 years			0.5 years			4 years			0.5 years
Expected volatility		87% - 88	%		71	%		83	%		54	%
Risk-free interest rate		0.53% - 0.92	%		0.15	%		1.24% - 1.61	%		0.20	%
Expected dividends	$	—		$	—		$	—		$	—

Under the Performance Plan, incentive and nonqualified stock options have been granted to employees and directors to purchase common stock at prices equal to the fair value of the Company’s shares at the respective grant dates. A summary of stock option (incentive and nonqualified) activity for the first half of fiscal 2012 is presented below:

	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Yrs.)		Aggregate Intrinsic Value ($000s)
Outstanding at January 28, 2012		2,990,501		$	6.61
Granted		20,500			1.71
Exercised		—			—
Forfeited or expired		(315,414	)		12.86
Outstanding at July 28, 2012		2,695,587		$	5.85		4.0	$	178
Vested and expected to vest at July 28, 2012		2,512,390		$	6.01		4.0	$	169
Exercisable at July 28, 2012		1,346,857		$	7.83		3.4	$	143

The weighted-average grant-date fair value per share of options granted during the first half of fiscal 2012 and 2011 was $1.71 and $1.96, respectively. There were no stock options exercised during the first half of fiscal 2012 and the total intrinsic value of options exercised during the first half of fiscal 2011 was $0.1 million.

Restricted Stock Awards

A summary of service-based restricted stock awards activity under the Performance Plan for the first half of fiscal 2012 is presented in the following table. Except as described below, such restricted stock awards contain a service-based restriction as to vesting. These awards generally vest over four years with 25% of the grant vesting each year on the anniversary of the grant date.

	Shares			Weighted- Average Grant-Date Fair Value
Outstanding at January 28, 2012		765,523		$	3.91
Granted		1,495,782			1.76
Vested		(179,508	)		4.40
Forfeited or expired		(100,207	)		4.06
Outstanding at July 28, 2012		1,981,590		$	2.24

The weighted-average grant-date fair value per share of service-based restricted stock awards granted during the first half of 2012 and 2011 was $1.76 and $3.53, respectively. The total fair value of awards vested during the first half of fiscal 2012 and 2011 was $0.5 million and $0.9 million, respectively.

During the first half of fiscal 2012, the Company granted 675,000 performance-based restricted stock awards which only vest upon the achievement of certain financial targets. The weighted-average grant-date fair value per share of performance-based restricted stock awards granted during the first half of fiscal 2012 was $1.77. There were no performance-based restricted stock awards granted during the first half of fiscal 2011.

Restricted Stock Units

A summary of restricted stock units activity under the Performance Plan for the first half of fiscal 2012 is presented below. Restricted stock units contain a service-based restriction as to vesting. These awards generally vest 100% on the first anniversary of the grant date.

	Shares			Weighted- Average Grant-Date Fair Value
Outstanding at January 28, 2012		150,000		$	3.19
Granted		125,000			1.57
Vested		(125,000	)		3.19
Forfeited or expired		(25,000	)		3.19
Outstanding at July 28, 2012		125,000		$	1.57

Stock-based compensation expense recognized related to nonvested stock options, restricted stock awards and restricted stock units during each of the second quarters of fiscal 2012 and 2011 was $0.6 million and $0.7 million, respectively, and during the first half of fiscal 2012 and 2011, was $1.4 million and $1.7 million, respectively.

At July 28, 2012, the Company had approximately $4.3 million of stock-based compensation cost related to nonvested stock options, service-based restricted stock awards and restricted stock units expected to be recognized over a weighted-average period of approximately 2.6 years, and $0.5 million of stock-based compensation cost related to certain performance-based restricted stock awards, which is expected to be recognized over a weighted-average period of approximately 3.5 years.

Employee Stock Purchase Plan (“ESPP”)

The Company’s ESPP provides a method for Company employees to voluntarily purchase Company common stock at a 10% discount from fair market value as of the beginning or the end of each six-month purchasing period, whichever is lower. The ESPP covers substantially all employees who have three months of service with the Company, excluding senior executives. The ESPP is intended to constitute an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code of 1986, as amended.

During the first half of fiscal 2012 and 2011, the Company issued 114,897, and 95,798 shares at an average price of $1.58 and $2.35, respectively, under the ESPP.

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Fair Value Measurements

6 Months Ended

Jul. 28, 2012

Fair Value Measurements [Abstract]

FAIR VALUE MEASUREMENTS

9. FAIR VALUE MEASUREMENTS

The Company measures its financial assets and liabilities at fair value on a recurring basis and measures its nonfinancial assets and liabilities at fair value as required or permitted.

Fair value is defined as the price that would be received pursuant to the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. In order to determine the fair value of certain assets and liabilities, the Company applies the three-level hierarchy of valuation techniques based upon whether the inputs reflect assumptions other market participants would use based upon market data obtained from independent sources (observable inputs) or reflect the Company’s assumptions of market participant valuation (unobservable inputs) and requires the use of observable inputs if such data is available without undue cost and effort. The hierarchy is as follows:

• Level 1 — quoted prices for identical instruments in active markets.

• Level 2 — inputs other than Level 1 inputs, which are observable either directly or indirectly.

• Level 3 — unobservable inputs.

Level 3 assumptions are, by their nature, inherently uncertain and the effect of changes in estimates may result in a significantly lower or higher fair value measurement.

Recurring Fair Value Measurements

Derivative Liability

The Series B Preferred shares are required to be measured at fair value each reporting period. The fair value of the Series B Preferred shares was estimated using an option pricing model that requires Level 3 inputs, which are highly subjective and determined using the following significant assumptions:

	July 28, 2012			April 28. 2012
Conversion price	$	1.75		$	1.75
Expected volatility		66	%		65	%
Expected term (in years)		9.3			9.6
Risk free interest rate		1.58	%		1.96	%
Expected dividends	$	—		$	—

The following table presents the activity recorded for the derivative liability during the first half ended:

	July 28, 2012
	(In thousands)
Beginning balance as of January 28, 2012	$	20,076
Gain on change in fair value		(6,333	)
Balance as of April 28, 2012		13,743
Loss on change in fair value		8,219
Ending balance as of July 28, 2012	$	21,962

The derivative liability is included in other current liabilities in the accompanying Condensed Consolidated Balance Sheet. Changes in the fair value of the derivative liability are included in gain on derivative liability in the accompanying Condensed Consolidated Statement of Operations and Comprehensive Operations.

Money Market Funds

As of July 28, 2012, and January 28, 2012, the Company had approximately $10.0 million and $19.8 million held in money market funds, respectively. The fair value of money market funds is determined based on Level 1 inputs which consist of quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets. Money market funds are included in cash and cash equivalents in the accompanying Condensed Consolidated Balance Sheet.

Non-Recurring Fair Value Measurements

On a non-recurring basis, using a discounted cash flow model, the Company measures certain of its long-lived assets at fair value based on Level 3 inputs including, but not limited to, moderate comparable store sales and margin growth, projected operating costs based primarily on historical trends, and an estimated weighted-average cost of capital rate. During the first half of fiscal 2012 and 2011 the Company recorded $3.5 million and $5.8 million of impairment charges, respectively, in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Operations.

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Segment Reporting

6 Months Ended

Jul. 28, 2012

Segment Reporting [Abstract]

SEGMENT REPORTING

11. SEGMENT REPORTING

The Company operates exclusively in the retail apparel industry. The Company designs, produces and distributes clothing and related products catering to teens and young adults through its primarily mall-based PacSun retail stores. The Company has identified three operating segments: PacSun stores, PacSun Outlet stores and pacsun.com. The three operating segments have been aggregated into one reportable segment based on the similar nature of products sold, production, merchandising and distribution processes involved, target customers, and economic characteristics among the three operating segments.

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Shareholders' Equity (Details 2) (USD $)	6 Months Ended
	Jul. 28, 2012	Jul. 30, 2011
Restricted Stock [Member] | Performance Plan [Member]
Summary of service-based restricted stock awards and units activity
Shares Outstanding at January 28, 2012	765,523
Weighted-Average Grant-Date Fair Value Outstanding at January 28, 2012	$ 3.91
Granted shares	1,495,782
Weighted-average grant-date fair value granted	$ 1.76	$ 3.53
Vested Shares	(179,508)
Weighted-Average Grant-Date Fair Value Vested	$ 4.40
Forfeited or expired shares	(100,207)
Weighted-Average Grant-Date Fair Value Forfeited or expired	$ 4.06
Shares Outstanding at July 28, 2012	1,981,590
Weighted-Average Grant-Date Fair Value Outstanding at July 28, 2012	$ 2.24
Restricted Stock Units (RSUs) [Member]
Summary of service-based restricted stock awards and units activity
Shares Outstanding at January 28, 2012	150,000
Weighted-Average Grant-Date Fair Value Outstanding at January 28, 2012	$ 3.19
Granted shares	125,000
Weighted-average grant-date fair value granted	$ 1.57
Vested Shares	(125,000)
Weighted-Average Grant-Date Fair Value Vested	$ 3.19
Forfeited or expired shares	(25,000)
Weighted-Average Grant-Date Fair Value Forfeited or expired	$ 3.19
Shares Outstanding at July 28, 2012	125,000
Weighted-Average Grant-Date Fair Value Outstanding at July 28, 2012	$ 1.57

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Shareholders' Equity (Tables)

6 Months Ended

Jul. 28, 2012

Shareholders' Equity [Abstract]

Weighted- average assumptions for determining Fair value

The fair value of the Company’s stock-based compensation activity was determined using the following weighted- average assumptions:

	For the First Half Ended
	July 28, 2012						July 30, 2011
	Stock Options			ESPP			Stock Options			ESPP
Expected life		4 years			0.5 years			4 years			0.5 years
Expected volatility		87% - 88	%		71	%		83	%		54	%
Risk-free interest rate		0.53% - 0.92	%		0.15	%		1.24% - 1.61	%		0.20	%
Expected dividends	$	—		$	—		$	—		$	—

Stock option (incentive and nonqualified) activity

	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Yrs.)		Aggregate Intrinsic Value ($000s)
Outstanding at January 28, 2012		2,990,501		$	6.61
Granted		20,500			1.71
Exercised		—			—
Forfeited or expired		(315,414	)		12.86
Outstanding at July 28, 2012		2,695,587		$	5.85		4.0	$	178
Vested and expected to vest at July 28, 2012		2,512,390		$	6.01		4.0	$	169
Exercisable at July 28, 2012		1,346,857		$	7.83		3.4	$	143

Summary of service-based restricted stock awards and units activity

	Shares			Weighted- Average Grant-Date Fair Value
Outstanding at January 28, 2012		765,523		$	3.91
Granted		1,495,782			1.76
Vested		(179,508	)		4.40
Forfeited or expired		(100,207	)		4.06
Outstanding at July 28, 2012		1,981,590		$	2.24

	Shares			Weighted- Average Grant-Date Fair Value
Outstanding at January 28, 2012		150,000		$	3.19
Granted		125,000			1.57
Vested		(125,000	)		3.19
Forfeited or expired		(25,000	)		3.19
Outstanding at July 28, 2012		125,000		$	1.57

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Impairment of Long Lived Assets (Details 1) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jul. 28, 2012 Store	Jul. 30, 2011 Store
Long lived assets tested for impairment
Carrying value of assets tested for impairment	$ 9,016	$ 27,688
Carrying value of assets with impairment	1,955	4,949
Aggregate fair value of all long-lived assets tested	$ 813	$ 1,554
Number of stores tested for asset impairment	116,000	187,000
Number of stores with asset impairment	23,000	28,000

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Discontinued Operations (Details) (USD $)	3 Months Ended	6 Months Ended
	Jul. 30, 2011	Jul. 30, 2011
Details of operating results included in discontinued operations
Net sales	$ 13,983	$ 27,856
Cost of goods sold, including buying, distribution and occupancy costs	11,840	23,416
Gross margin	2,143	4,440
Selling, general and administrative expenses	3,998	9,183
Operating loss	(1,855)	(4,743)
Income taxes	48	122
Loss from discontinued operations	$ (1,807)	$ (4,621)

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jul. 28, 2012	Jul. 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (33,161)	$ (50,729)
Adjustments to reconcile net loss to net cash from operating activities:
Loss on disposal of property and equipment	118	63
Loss on derivative liability	1,886
Depreciation and amortization	17,765	22,437
Asset impairment	3,540	5,785
Amortization of debt discount	787
Non-cash stock-based compensation	1,466	1,736
Change in operating assets and liabilities:
Merchandise inventories	(56,057)	(67,631)
Other current assets	(2,060)	(6,428)
Other assets	869	124
Deferred rent	(86)	(736)
Accounts payable	46,938	56,383
Other current liabilities	5,562	(573)
Deferred lease incentives	(953)	(3,872)
Other long-term liabilities	(163)	(276)
Net cash used in operating activities	(13,549)	(43,717)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from insurance settlement	653	300
Purchases of property and equipment	(9,068)	(6,938)
Restricted cash	8,188
Net cash used in investing activities	(227)	(6,638)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options	181	314
Payments for credit facility borrowings	(1,254)
Principal payments under mortgage borrowings	(265)	(248)
Principal payments under capital leases	(362)	(169)
Net cash used in financing activities	(1,700)	(103)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(15,476)	(50,458)
CASH AND CASH EQUIVALENTS, beginning of period	50,306	63,710
CASH AND CASH EQUIVALENTS, end of period	34,830	13,252
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest	1,741	1,047
Cash paid for income taxes	483	932
SUPPLEMENTAL DISCLOSURES OF NON-CASH TRANSACTIONS:
Property and equipment purchases accrued at period end	314	345
Capital lease borrowings for property and equipment	$ 111

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Other Current Liabilities

6 Months Ended

Jul. 28, 2012

Other Current Liabilities [Abstract]

OTHER CURRENT LIABILITIES

5. OTHER CURRENT LIABILITIES

Other current liabilities consisted of the following:

	July 28, 2012		January 28, 2012
	(In thousands)
Derivative liability	$	21,962	$	20,076
Accrued gift cards		7,701		10,776
Accrued compensation and benefits		14,484		10,687
Sales taxes payable		4,227		3,983
Deferred tax liability		2,201		2,201
Accrued capital expenditures		1,599		1,281
Other		22,717		19,365
Total other current liabilities	$	74,891	$	68,369

As disclosed in Note 8, the Company issued 1,000 shares of its Convertible Series B Preferred Stock (the “Series B Preferred”) in connection with the five-year, $60 million senior secured term loan (the “Term Loan”), funded by an affiliate of Golden Gate Capital. The fair value of the Series B Preferred at issuance was approximately $15.0 million which was recorded as a derivative liability. As of July 28, 2012, the fair value of the derivative liability was approximately $22.0 million. See Note 9, “Fair Value Measurements – Recurring Fair Value Measurements” for further discussion on the derivative liability.

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Impairment of Long-Lived Assets (Details Textual) (USD $)	3 Months Ended		6 Months Ended
	Jul. 28, 2012	Jul. 30, 2011	Jul. 28, 2012	Jul. 30, 2011
Impairment Of Long-Lived Assets (Textual) [Abstract]
Impairment charged	$ 2,700,000	$ 5,800,000	$ 3,540,000	$ 5,785,000
Excess store fixtures	1,000,000
First half ended [Member]
Impairment of Long Lived Assets (Additional Textual) [Abstract]
Underperforming stores, remaining assets fair value	$ 8,000,000		$ 8,000,000

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Fair Value Measurements (Details Textual) (USD $)	3 Months Ended		6 Months Ended				6 Months Ended
	Jul. 28, 2012	Jul. 30, 2011	Jul. 28, 2012	Jul. 30, 2011	Jul. 28, 2012 Fair Value, Inputs, Level 1 [Member] Cash and Cash Equivalents [Member]	Jan. 28, 2012 Fair Value, Inputs, Level 1 [Member] Cash and Cash Equivalents [Member]	Jul. 28, 2012 Fair Value, Inputs, Level 3 [Member]	Jul. 30, 2011 Fair Value, Inputs, Level 3 [Member]
Fair Value Measurements (Textual) [Abstract]
Money market funds, carrying value					$ 10,000,000	$ 19,800,000
Long-lived assets impairment charges	$ 1,142,000	$ 3,100,000	$ 2,676,000	$ 5,118,000			$ 3,500,000	$ 5,800,000

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Other Current Liabilities (Tables)

6 Months Ended

Jul. 28, 2012

Other Current Liabilities [Abstract]

Schedule of other current liabilities.

Other current liabilities consisted of the following:

	July 28, 2012		January 28, 2012
	(In thousands)
Derivative liability	$	21,962	$	20,076
Accrued gift cards		7,701		10,776
Accrued compensation and benefits		14,484		10,687
Sales taxes payable		4,227		3,983
Deferred tax liability		2,201		2,201
Accrued capital expenditures		1,599		1,281
Other		22,717		19,365
Total other current liabilities	$	74,891	$	68,369