##### Table of Contents





FORM 10-K
 (Mark One)[ x ] Annual Report Pursuant to Section 13 or
    15(d) of the Securities Exchange Act of 1934
    For the fiscal year ended: January 31, 2009
    or[  ] Transition Report Pursuant to Section 13 or
    15(d) of the Securities Exchange Act of 1934
    For the transition period
    from
    to      
  PACIFIC SUNWEAR OF CALIFORNIA,
    INC.
    California

95-3759463(State of incorporation)

(I.R.S. Employer Identification No.)3450 E. Miraloma Ave., Anaheim, CA

92806(Address of principal executive offices)

(Zip Code)    (714) 414-4000
    Title of Each Class

Name of Exchange on Which RegisteredCommon Stock, par value $0.01 per share

The NASDAQ Stock Market LLC (Nasdaq Global Select Market)      
    Indicate by check mark if the registrant is a well-known
    seasoned issuer, as defined in Rule 405 of the Securities
    Act. Yes [ ] No [X]
    Indicate by check mark if the registrant is not required to file
    reports pursuant to Section 13 or 15(d) of the Act.
    Yes [ ] No [X]
    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 if disclosure of delinquent filers
    pursuant to Item 405 of
    Regulation S-K
    is not contained herein, and will not be contained, to the best
    of the registrants knowledge, in definitive proxy or
    information statements incorporated by reference in
    Part III of this
    Form 10-K
    or any amendment to this
    Form 10-K.
    [ ]
    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 definitions of
    large accelerated filer, accelerated
    filer and smaller reporting company in Rule
    12b-2 of the
    Exchange Act. (Check one):  Large accelerated
    filer [X]
    Accelerated
    filer [ ]
    Non-accelerated
    filer [ ]
    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]        Form 10-K.




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TABLE OF CONTENTS  PART IITEM 1. BUSINESSITEM 1A. RISK FACTORSITEM 1B. UNRESOLVED STAFF COMMENTSITEM 2. PROPERTIESITEM 3. LEGAL PROCEEDINGSITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSPART IIITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESPERFORMANCE GRAPHITEM 6. SELECTED FINANCIAL DATAITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAITEM 9. CHANGES IN, AND DISAGREEMENTS WITH, ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSUREITEM 9A. CONTROLS AND PROCEDURESPART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCEITEM 11. EXECUTIVE COMPENSATIONITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESPART IVITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULESSIGNATURESEX-10.3EX-10.4EX-10.12EX-10.21EX-10.24EX-10.25EX-21.1EX-23.1EX-31.1EX-32.1    Table of Contents  PART I
 
  ITEM 1. BUSINESS
      (714) 414-4000; www.pacsun.com Form 10-K, Form 10-Q, Form 8-K,
    Fiscal Year

Year-End Date

# of Weeks2009

January 30, 2010

522008

January 31, 2009

522007

February 2, 2008

522006

February 3, 2007

532005

January 28, 2006

522004

January 29, 2005

52   Our Mission and
    Strategies
    Strong Focus on Apparel.
   2     Pacific
    Sunwear of California, Inc. Form 10-K 2008




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##### Table of Contents



Drive Improved Store Productivity.
  Deliver a Compelling Customer Shopping Experience. 50-75
    Merchandising
  Merchandise.
  2008

2007

2006Young Mens Apparel

41%

38%

37%Juniors Apparel

42%

33%

29%Accessories

13%

17%

20%Footwear

4%

12%

14%Total

100%

100%

100%    Pacific
    Sunwear of California, Inc. Form 10-K
    2008     3




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##### Table of Contents



Customer-focused Product Mix. and/or
  Brands. up-and-coming
      Vendor and Contract Manufacturer Relationships.
   4     Pacific
    Sunwear of California, Inc. Form 10-K 2008




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##### Table of Contents



Buying, Planning, Allocation and Distribution.
    E-commerce. www.pacsun.com. e-mail
  Stores
  Locations.
  Real Estate Strategy. 35-50 35-50
   Pacific
    Sunwear of California, Inc. Form 10-K
    2008     5




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##### Table of Contents



Store Operations.
  Competition
    Trademarks and
    Service Marks
    Information
    Technology
     6     Pacific
    Sunwear of California, Inc. Form 10-K 2008




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##### Table of Contents



look-up,
  Seasonality
    Working Capital
    Concentration
    Employees
  Form 10-K),
  Executive Officers.
  Executive Officer

Age

TitleSally Frame Kasaks


64


Chief Executive Officer and Chairman of the BoardMichael L. Henry


38


Sr. Vice President, Chief Financial Officer and Secretary
        Pacific
    Sunwear of California, Inc. Form 10-K
    2008     7




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##### Table of Contents



ITEM 1A.
    RISK
    FACTORS  Cautionary Note
    Regarding Forward-Looking Statements
  This report on
    Form 10-K
    contains forward-looking statements within the
    meaning of Section 27A of the Securities Act of 1933, as
    amended, and Section 21E of the Exchange Act, and we intend
    that such forward-looking statements be subject to the safe
    harbors created thereby. We are providing cautionary statements
    identifying important factors that could cause our actual
    results to differ materially from those projected in the
    forward-looking statements contained herein. Any statements that
    express, or involve discussions as to, expectations, beliefs,
    plans, objectives, assumptions, future events or performance
    (often, but not always identifiable by the use of words or
    phrases such as will result, expects to,
    will continue, anticipates,
    plans, intends, estimated,
    projects and outlook) are not historical
    facts and may be forward-looking and, accordingly, such
    statements involve estimates, assumptions and uncertainties
    which could cause actual results to differ materially from those
    expressed in the forward-looking statements. Examples of
    forward-looking statements in this report include, but are not
    limited to, the following categories of expectations about:
  
    forecasts of future store closures, expansions, relocations
    and store refreshes, including planned fiscal 2009 activities
    forecasts of future comparable store net sales, gross
    margins, inventory levels and selling, general and
    administrative expenses
    the sufficiency of working capital, operating cash flows and
    available credit to meet our operating and capital expenditure
    requirements
    expectations regarding our capital expenditure plans for
    fiscal 2009 and for the following few years
    expectations regarding future borrowings and repayments under
    our credit facility and cash balances at fiscal year-end
    expectations regarding future increases in common area
    maintenance (CAM) expenses  All forward-looking statements included in this report are
    based on information available to us as of the date hereof, and
    are subject to risks and uncertainties that could cause actual
    results to differ materially from those expressed in the
    forward-looking statements. We assume no obligation to update or
    revise any such forward-looking statements to reflect events or
    circumstances that occur after such statements are made.
  The current volatility in the U.S. economy has adversely
    affected consumer spending, which could negatively impact our
    business, operating results and stock price.
    Our comparable store net sales results will fluctuate
    significantly, which can cause volatility in our operating
    performance and stock price.
   8     Pacific
    Sunwear of California, Inc. Form 10-K 2008




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##### Table of Contents



Our failure to identify and respond appropriately to changing
    consumer preferences and fashion trends in a timely manner could
    have a material adverse impact on our business and
    profitability.
  Our net sales, operating income and inventory levels
    fluctuate on a seasonal basis.
  We have stated our intention to place a greater emphasis on
    apparel, Juniors merchandise, and the proprietary brand
    penetration within the Juniors category in our merchandising
    assortments than we have in the past, which may not be
    successful in improving our store productivity or profitability.
  Our reinvestment in our existing store base may not result in
    improved operating performance and the deceleration of our store
    refresh program in fiscal 2009 may cause many of our stores
    to become less attractive to customers.
   Pacific
    Sunwear of California, Inc. Form 10-K
    2008     9




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##### Table of Contents



50-75
  Our business depends on our ability to operate existing
    stores that achieve acceptable levels of profitability. Any
    failure to do so may negatively impact our stock price and
    operational performance.
  We face significant competition from both
    vertically-integrated and brand-based competitors that are
    growing rapidly, which could have a material adverse effect on
    our business.
  Our customers may not prefer our proprietary brand
    merchandise, which may negatively impact our profitability.
  Our current or prospective vendors may be unable or unwilling
    to supply us with adequate quantities of their merchandise in a
    timely manner or at acceptable prices, which could have a
    material adverse impact on our business.
     10     Pacific
    Sunwear of California, Inc. Form 10-K 2008




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Our foreign sources of production may not always be reliable,
    which may result in a disruption in the flow of new merchandise
    to our stores.
  The loss of key personnel could have a material adverse
    effect on our business at any time.
  Adverse outcomes of litigation matters could significantly
    affect our operating results.
  Our dependence on a single distribution facility exposes us
    to significant operational risks.
  Selling merchandise over the internet carries particular
    risks that can have a negative impact on our business.
   Pacific
    Sunwear of California, Inc. Form 10-K
    2008     11




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##### Table of Contents



and/or
  The effects of terrorism or war could significantly impact
    consumer spending and our operational performance.
  Our stock price can fluctuate significantly due to a variety
    of factors, which can negatively impact our total market
    value.
  Any material failure, interruption or security breach of our
    computer systems or information technology may adversely affect
    the operation of our business and our financial results.
  and/or and/or
     12     Pacific
    Sunwear of California, Inc. Form 10-K 2008




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##### Table of Contents



We caution that the risk factors described above could cause
    actual results or outcomes to differ materially from those
    expressed in any forward-looking statements made by us or on
    behalf of the Company. Further, we cannot assess the impact of
    each such factor on our business or the extent to which any
    factor, or combination of factors, may cause actual results to
    differ materially from those contained in any forward-looking
    statements.
  
 ITEM 1B. UNRESOLVED
    STAFF COMMENTS
    
 ITEM 2. PROPERTIES
  Form 10-K.
      Alabama


13Alaska


3Arizona


22Arkansas


5California


118Colorado


22Connecticut


10Delaware


4Florida


70Georgia


19Hawaii


9Idaho


6Illinois


28Indiana


18Iowa


9Kansas


7Kentucky


8Louisiana


11Maine


5Maryland


19Massachusetts


23Michigan


26Minnesota


16Mississippi


6Missouri


17Montana


4Nebraska


4Nevada


10New Hampshire


7New Jersey


24New Mexico


7New York


37North Carolina


24North Dakota


4Ohio


33Oklahoma


9Oregon


13Pennsylvania


51Rhode Island


2South Carolina


12South Dakota


2Tennessee


17Texas


70Utah


11Vermont


4Virginia


26Washington


25West Virginia


8Wisconsin


18Wyoming


2Puerto Rico


14   
 ITEM 3. LEGAL
    PROCEEDINGS
    
 ITEM 4. SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS
     Pacific
    Sunwear of California, Inc. Form 10-K
    2008     13




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##### Table of Contents



PART II
 
  ITEM 5.
    MARKET FOR
    REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
    ISSUER PURCHASES OF EQUITY SECURITIES    Fiscal 2008


Fiscal 2007High


Low


High


Low1st Quarter

$
14.04


$
10.62


$
23.11


$
16.942nd Quarter

$
13.23


$
7.00


$
23.06


$
15.623rd Quarter

$
8.76


$
2.54


$
18.60


$
13.004th Quarter

$
3.53


$
0.72


$
16.99


$
8.87      14     Pacific
    Sunwear of California, Inc. Form 10-K 2008




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##### Table of Contents



PERFORMANCE
    GRAPH
    Comparison of
    Cumulative Total Return from January 31, 2004 through
    January 31,
    2009(1)
  
  Calculated
    Returns(1)

01/31/04

01/29/05

01/28/06

02/03/07

02/02/08

01/31/09Pacific Sunwear

100

105

105

87

52

5NASDAQ Market Index

100

100

113

121

117

58Retail Index

100

121

129

143

126

81     Common Stock Repurchase and Retirement Form 10-K,
     Pacific
    Sunwear of California, Inc. Form 10-K
    2008     15




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##### Table of Contents



ITEM 6. SELECTED
    FINANCIAL DATA
    Fiscal Year2008


2007


2006


2005


2004Consolidated Income Statement Data:Net sales

$
1,255


$
1,306


$
1,241


$
1,206


$
1,081Gross margin (after buying, distribution and occupancy costs)


320



414



407



453



404Operating (loss)/income from continuing operations


(61
)


70



101



188



160(Loss)/ income from continuing operations


(39
)


46



65



120



101(Loss)/ income from continuing operations per share, diluted

$
(0.59
)

$
0.65


$
0.91


$
1.59


$
1.30Consolidated Operating Data:Comparable store net sales
    +/(-)(1)


(5.2
)%


3.4
%


(4.2
)%


3.5
%


7.5
%Average net sales($)/square
    foot(2)

$
339


$
350


$
347


$
370


$
370Average net sales($)/store
    (000s)(2)

$
1,298


$
1,334


$
1,263


$
1,369


$
1,339Stores open at end of period


932



954



965



907



828Capital expenditures ($ million)

$
81


$
106


$
158


$
109


$
82Consolidated Balance Sheet Data:Working capital

$
98


$
187


$
195


$
304


$
258Total assets

$
570


$
752


$
773


$
808


$
678Long-term debt


















Shareholders
    equity(3)

$
372


$
483


$
503


$
547


$
458          16     Pacific
    Sunwear of California, Inc. Form 10-K 2008




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##### Table of Contents



ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  Form 10-K. Form 10-K).
  Executive
    Overview
    Comparable (or same store) sales
  Net merchandise margins
  Operating margin
  Store sales trends
  Cash flow and liquidity (working capital)
  Critical
    Accounting Policies
     Pacific
    Sunwear of California, Inc. Form 10-K
    2008     17




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##### Table of Contents



Recognition of Revenue
  Valuation of Inventories and/or
  Determination of Stock-Based Compensation
    Expense Form 10-K
  Store Operating Lease Accounting Bulletin 85-3, 13-1, Bulletin 88-1,
   18     Pacific
    Sunwear of California, Inc. Form 10-K 2008




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Evaluation of Long-Lived Assets
    Evaluation of Insurance Reserves
  Evaluation of Income Taxes
    Evaluation of Litigation Matters
   Pacific
    Sunwear of California, Inc. Form 10-K
    2008     19




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##### Table of Contents



Results of
    Operations
    Fiscal Year2008


2007


2006Net sales


100.0
%


100.0
%


100.0
%Cost of goods sold (including buying, distribution and occupancy
    costs)


74.5



68.3



67.3Gross margin


25.5



31.7



32.7Selling, general and administrative expenses


30.4



26.4



24.6Operating (loss)/income from continuing operations


(4.9
)


5.3



8.1Other income, net


0.2



0.2



0.4(Loss)/Income from continuing operations before income tax
    expense


(4.7
)


5.5



8.5Income tax (benefit)/expense


(1.5
)


2.1



3.3(Loss)/Income from continuing operations


(3.2
)%


3.4
%


5.2
%Number of stores open at end of period


932



954



965Total square footage (in 000s)


3,588



3,658



3,664   Cost Reduction
    Actions
    
    Reduced planned inventory levels by at least 20 percent
    throughout the year, thereby significantly reducing the amount
    of cash that will be invested in inventory at any one point in
    time;
    Reduced planned capital expenditures to not more than
    $30 million for the year, a reduction of over
    $50 million from the fiscal 2008 level; and
    Reduced planned selling, general and administrative expenses by
    approximately $35 million versus the fiscal 2008 level
    (2008 includes total non-recurring impairment charges for
    goodwill and the Anaheim distribution center of approximately
    $15 million). These reductions are most prominently within
    headquarters, field management and payroll expenses. As part of
    the reduction in selling, general and administrative expenses,
    we announced a workforce reduction resulting in the elimination
    of approximately 11 percent of our headquarters and field
    management staff.   20     Pacific
    Sunwear of California, Inc. Form 10-K 2008




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##### Table of Contents



Fiscal 2008
    Compared to Fiscal 2007
  Net
    Sales
    $millions


Attributable to$
(63
)

Negative (5)% decline in comparable store net sales in fiscal
    2008 compared to fiscal 2007. In percentage terms, the average
    sale transaction in a comparable store was down 9% partially
    offset by a 4% increase in total transactions. For fiscal 2008,
    comparable store net sales were down 1% in the first half and 9%
    in the second half. Same-store sales declined more significantly
    in the second half of the year consistent with the overall
    economic downturn.(28
)

Store closures.26


Increase due to non-comparable sales from new, expanded or
    relocated stores not yet included in the comparable store base.14


Increase in net sales attributable to
    e-commerce.$
(51
)

Total     Gross
    Margin
    %


Attributable to(4.7
)

Decline in merchandise margin from 50.1% in fiscal 2007 to 45.4%
    in fiscal 2008, or $85 million, due to increased markdowns and
    promotional activity associated with the precipitous decline in
    consumer spending and the overall economic environment,
    particularly in the latter half of fiscal 2008.(1.4
)

Increase in occupancy charges as a percentage of net sales to
    15.5% ($194 million) in fiscal 2008 from 14.1% ($184 million) in
    fiscal 2007. Deleverage of occupancy costs as a result of the
    negative (5)% same-store sales result for fiscal 2008.(0.1
)

Increase in other costs.(6.2
)

Total      Pacific
    Sunwear of California, Inc. Form 10-K
    2008     21




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##### Table of Contents



Selling, General
    and Administrative Expenses
    %


Attributable to2.3


Increase in asset impairment charges, including a
    $15 million increase in store impairments, $8 million
    related to the materials handling equipment in the
    Companys former Anaheim distribution center, and
    $6 million related to the impairment of goodwill.0.7


Increase in payroll and payroll-related expenses
    ($2 million) due to deleveraging these expenses against the
    negative five percent same-store sales results. In dollars,
    store payroll expenses were down $0.6 million.0.5


Increase in depreciation expense ($4 million), primarily
    due to the impact of accelerated depreciation associated with
    store closures and relocations, and new depreciation on existing
    stores from our refresh program.0.5


Increase in other SG&A expenses.4.0


Total     Goodwill
    Impairment
    Other Income,
    Net
         22     Pacific
    Sunwear of California, Inc. Form 10-K 2008




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##### Table of Contents



Income
    Taxes
    Fiscal 2007
    Compared to Fiscal 2006
  Net Sales
    $millions


Attributable to$
39


3.4% increase in comparable store net sales in fiscal 2007
    compared to fiscal 2006.37


Net sales from stores opened in fiscal 2006 while not yet
    included in the comparable store base in 2007.10


Net sales from expanded or relocated stores not yet included in
    the comparable store base.10


Increase in net sales attributable to
    e-commerce.6


14 new stores opened in fiscal 2007 not yet included in the
    comparable store base.(38
)

25 closed stores in fiscal 2007 and 3 closed stores in fiscal
    2006.$
64


Total       Gross
    Margin
     Pacific
    Sunwear of California, Inc. Form 10-K
    2008     23




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##### Table of Contents



%


Attributable to(0.5
)

Increase in occupancy charges as a percentage of net sales to
    14.1% ($184 million) in fiscal 2007 from 13.6%
    ($168 million) in fiscal 2006. Occupancy expenses increased
    pursuant to store operating lease terms at a higher rate of
    sales than the 3.4% same-store sales result for fiscal 2007.(0.3
)

Increase in buying expenses as a percentage of net sales to 1.6%
    ($21 million) in fiscal 2007 from 1.3% ($16 million)
    in fiscal 2006, primarily due to increased headcount in the
    Companys design and allocation departments.(0.2
)

Increase in distribution expenses as a percentage of net sales
    to 2.6% ($33 million) in fiscal 2007 from 2.4%
    ($29 million) in fiscal 2006, primarily due to operating
    two distribution centers in fiscal 2007 versus one in fiscal
    2006.(1.0
)

Total   Selling, General and Administrative Expenses
    %


Attributable to0.2


Increase in asset impairment and loss on disposal charges to
    $6 million in fiscal 2007 compared to $3 million in
    fiscal 2006.0.5


Increase in direct store expenses as a percentage of net sales
    to 7.1% ($93 million) in fiscal 2007 from 6.6%
    ($82 million) in fiscal 2006, primarily due to increased
    depreciation expenses associated with the Companys store
    refresh program and new store openings as well as increased
    credit authorization charges due to higher penetration of credit
    card sales in fiscal 2007.0.2


Increase in general and administrative payroll expenses as a
    percentage of net sales to 3.0% ($39 million) in fiscal
    2007 from 2.8% ($35 million) in fiscal 2006 due to planned
    headcount additions.0.2


Increase in store payroll expenses as a percentage of net sales
    to 11.8% ($154 million) in fiscal 2007 from 11.6%
    ($144 million) for fiscal 2006. In absolute dollars, these
    expenses were up primarily due to the addition of 14 new stores
    during fiscal 2007 and 61 new stores during fiscal 2006. As a
    percentage of net sales, these expenses were up primarily due to
    deleveraging them against the 3.4% same-store sales results in
    fiscal 2007.0.3


Increase in consulting expenses as a percentage of net sales to
    0.4% ($5 million) in fiscal 2007 from 0.1%
    ($2 million) in fiscal 2006. The consulting expenses for
    fiscal 2007 were targeted primarily at the Companys
    strategic positioning, supply chain and real estate portfolio
    assessment.0.4


Increase in all other general and administrative expenses as a
    percentage of net sales to 3.5% ($47 million) in fiscal
    2007 from 3.1% ($39 million) for fiscal 2006, primarily due
    to planned increases in
    e-commerce
    and system support expenses designed at improving operating
    efficiencies.1.8


Total   Other Income, Net
     24     Pacific
    Sunwear of California, Inc. Form 10-K 2008




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##### Table of Contents



Income Tax
    (Benefit)/Expense
    Liquidity and
    Capital Resources
    Operating Cash
    Flows
    $millions


Attributable to$
(33
)

Net loss, primarily due to negative (5)% comparable store net
    sales in fiscal 2008 compared to fiscal 2007, asset impairments
    and lease termination charges associated with discontinued
    operations.(24
)

Decrease in cash flows from non-cash asset impairments and loss
    on disposals primarily due to the discontinued demo concept.(21
)

Decrease in cash flows from other current liabilities due to
    reduced compensation and lease termination accruals primarily
    associated with the discontinued demo concept.(11
)

Decrease in operating cash flows primarily due to a gain on the
    sale of the Anaheim distribution center. The $25 million of
    cash proceeds are classified in investing cash flows.15


Decrease in merchandise inventories, net of accounts payable,
    due primarily to our strategy to reduce overall ending inventory
    at the end of fiscal 2008 given current economic conditions.(8
)

Decrease in cash flows from other changes in working capital
    items.$
(82
)

Total    Pacific
    Sunwear of California, Inc. Form 10-K
    2008     25




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##### Table of Contents



Working
    Capital
    $millions


Description$
187


Working capital at February 2, 2008(73
)

Decrease in cash and cash equivalents, primarily due to
    $53 million of share repurchases and $47 million of
    demo lease termination payments, among other items (see cash
    flows statement).(46
)

Decrease in inventories, net of accounts payable, primarily as a
    result of our efforts during the fourth quarter of fiscal 2008
    to reduce overall inventory levels in response to the current
    economic environment.24


Net decrease in other current liabilities from reduced
    compensation accruals primarily due to lower store counts as a
    result of the discontinued demo concept and a decrease in our
    accrued gift card liability as a result of current year
    redemptions net of new gift card issuances.6


Net increase in other current assets.$
98


Working capital at January 31, 2009   Investing Cash
    Flows
  Form 10-K),
  Fiscal 2008 New
    Store Costs
      $millions


Description$
19


Store capital expenditures.10


Investments in new information technology capabilities,
    particularly with regard to supply chain, and store systems.1


Other corporate capital expenditures, including maintenance
    capital.$
30


Total    26     Pacific
    Sunwear of California, Inc. Form 10-K 2008




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##### Table of Contents



Financing Cash
    Flows
    Form 10-K,
  Credit
    Facility
      Contractual
    Obligations
     Pacific
    Sunwear of California, Inc. Form 10-K
    2008     27




---



##### Table of Contents



Payments Due by PeriodContractual Obligations



Less than

1-3

3-5

More than(In $millions)

Total

1 year

years

years

5 yearsOperating lease obligations

$525

$96

$169

$122

$138Capital lease obligations

<0.1

<0.1

<0.1



FIN 48 obligations including interest and penalties

1



1



Letters of credit

11

11





Total

$537

$107

$170

$122

$138       Operating Leases Form 10-K).
  35-50
    Indemnifications
     28     Pacific
    Sunwear of California, Inc. Form 10-K 2008




---



##### Table of Contents



Off-Balance Sheet
    Arrangements
    Recent Accounting
    Pronouncements
  Form 10-K,
  Inflation
    Seasonality and
    Quarterly Results
  30-34%
 
  ITEM 7A. QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   
  ITEM 8. FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA
   
  ITEM 9.
    CHANGES IN, AND
    DISAGREEMENTS WITH, ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
    DISCLOSURE     Pacific
    Sunwear of California, Inc. Form 10-K
    2008     29




---



##### Table of Contents



ITEM 9A. CONTROLS
    AND PROCEDURES
  Conclusion
    Regarding the Effectiveness of Disclosure Controls and
    Procedures
  Rule 13a-15(e) 15d-15(e)
  Managements
    Report on Internal Control Over Financial Reporting
  Rules 13a-15(f) 15d-15(f). Internal Control 
    Integrated Framework Internal
    Control  Integrated Framework
  Form 10-K,
    Changes in
    Internal Control Over Financial Reporting
     30     Pacific
    Sunwear of California, Inc. Form 10-K 2008




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
      Internal Control 
    Integrated Framework Managements Report on
    Internal Control over Financial Reporting
        Internal Control  Integrated Framework
         Pacific
    Sunwear of California, Inc. Form 10-K
    2008     31




---



##### Table of Contents



ITEM 9B. OTHER
    INFORMATION
   
  PART III
 
  ITEM 10. DIRECTORS,
    EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
  Form 10-K.
 
  ITEM 11. EXECUTIVE
    COMPENSATION
  Form 10-K.
 
  ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS  Form 10-K.
 
  ITEM 13. CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE
  Form 10-K.
 
  ITEM 14. PRINCIPAL
    ACCOUNTANT FEES AND SERVICES
  Form 10-K.
 
  PART IV
 
  ITEM 15. EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES
  (a) 1.
    The financial statements listed in the Index to
    Consolidated Financial Statements at
    page F-1
    are filed as a part of this report.  2.
    Financial statement schedules are omitted because they are not
    applicable or the required information is shown in the
    consolidated financial statements or notes thereto.3.
    Exhibits included or incorporated herein: See Index to
    Exhibits at end of consolidated financial statements.   32     Pacific
    Sunwear of California, Inc. Form 10-K 2008




---



##### Table of Contents



SIGNATURES
      By:
    /s/  Sally
    Frame Kasaks       Signature

Title

Date/s/  Sally
    Frame KasaksSally
    Frame Kasaks

Chief Executive Officer and Chairman of the Board (Principal
    Executive Officer)

March 31, 2009/s/  Michael
    L. HenryMichael
    L. Henry

Senior Vice President, Chief Financial Officer and Secretary
    (Principal Financial and Accounting Officer)

March 31, 2009/s/  Peter
    StarrettPeter
    Starrett

Non-Employee Lead Director

March 31, 2009/s/  Brett
    BrewerBrett
    Brewer

Non-Employee Director

March 31, 2009/s/  William
    C. CobbWilliam
    C. Cobb

Non-Employee Director

March 31, 2009/s/  Pearson
    C. Cummin IIIPearson
    C. Cummin III

Non-Employee Director

March 31, 2009/s/  Michael
    GoldsteinMichael
    Goldstein

Non-Employee Director

March 31, 2009/s/  George
    R. MrkonicGeorge
    R. Mrkonic

Non-Employee Director

March 31, 2009/s/  Thomas
    M. MurnaneThomas
    M. Murnane

Non-Employee Director

March 31, 2009/s/  Grace
    NicholsGrace
    Nichols

Non-Employee Director

March 31, 2009    Pacific
    Sunwear of California, Inc. Form 10-K
    2008     33




---



##### Table of Contents



PACIFIC SUNWEAR
    OF CALIFORNIA, INC.
  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
  CONSOLIDATED
    FINANCIAL STATEMENTS FOR THE FISCAL YEARS ENDED:
      Report of Independent Registered Public Accounting Firm


F-2Consolidated Balance Sheets as of January 31, 2009 and
    February 2, 2008


F-3Consolidated Statements of Operations and Comprehensive
    Operations for each of the three fiscal years in the period
    ended January 31, 2009


F-4Consolidated Statements of Shareholders Equity for each of
    the three fiscal years in the period ended January 31, 2009


F-5Consolidated Statements of Cash Flows for each of the three
    fiscal years in the period ended January 31, 2009


F-6Notes to Consolidated Financial Statements


F-7    Pacific
    Sunwear of California, Inc. Form 10-K
    2008     F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
            Internal Control  Integrated Framework
       F-2     Pacific
    Sunwear of California, Inc. Form 10-K 2008




---



##### Table of Contents



PACIFIC SUNWEAR
    OF CALIFORNIA, INC.
 CONSOLIDATED
    BALANCE SHEETS  January 31,


February 2,(In thousands, except share amounts)

2009


2008ASSETSCURRENT ASSETS:Cash and cash equivalents

$
24,776


$
97,587Merchandise inventories


107,205



170,182Other current assets


58,943



52,818Total current assets


190,924



320,587PROPERTY AND EQUIPMENT, NET:Gross property and equipment


665,236



688,241Less: Accumulated depreciation and amortization


(341,892
)


(311,998
)Total property and equipment, net


323,344



376,243Assets held for sale


3,682



Deferred income taxes


21,984



15,231Other assets


29,575



40,082TOTAL ASSETS

$
569,509


$
752,143LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable

$
45,263


$
62,349Other current liabilities


47,564



71,107Total current liabilities


92,827



133,456LONG-TERM LIABILITIES:Deferred lease incentives


52,313



74,012Deferred rent


23,008



27,669Other long-term liabilities


29,374



33,661Total long-term liabilities


104,695



135,342Commitments and contingencies (Note 12)SHAREHOLDERS EQUITY:Preferred stock, $.01 par value; 5,000,000 shares
    authorized; none issued






Common stock, $.01 par value; 170,859,375 shares
    authorized; 65,174,144 and 70,026,510 shares issued and
    outstanding, respectively


652



700Additional paid-in capital


2,306



16,761Retained earnings


369,029



465,884Total shareholders equity


371,987



483,345TOTAL LIABILITIES AND SHAREHOLDERS EQUITY

$
569,509


$
752,143   See notes to consolidated
    financial statements.
   Pacific
    Sunwear of California, Inc. Form 10-K
    2008     F-3




---



##### Table of Contents



PACIFIC SUNWEAR
    OF CALIFORNIA, INC.
 CONSOLIDATED
    STATEMENTS OF OPERATIONS AND COMPREHENSIVE OPERATIONS  (In thousands, except share and per share amounts)

January 31,


February 2,


February 3,FISCAL YEAR ENDED

2009


2008


2007Net sales

$
1,254,886


$
1,306,028


$
1,241,294Cost of goods sold, including buying, distribution and occupancy
    costs


934,779



892,102



834,783Gross margin


320,107



413,926



406,511Selling, general and administrative expenses


381,008



344,295



305,205Operating (loss)/income from continuing operations


(60,901
)


69,631



101,306Other income, net


2,369



3,012



4,620(Loss)/income from continuing operations before income tax
    (benefit)/expense


(58,532
)


72,643



105,926Income tax (benefit)/expense


(19,287
)


26,836



41,171(Loss)/income from continuing operations


(39,245
)


45,807



64,755Loss from discontinued operations, net of tax effects


(24,577
)


(76,174
)


(25,134
)Net (loss)/income

$
(63,822
)

$
(30,367
)

$
39,621Comprehensive (loss)/income

$
(63,822
)

$
(30,367
)

$
39,621(Loss)/income from continuing operations per share:Basic

$
(0.59
)

$
0.66


$
0.91Diluted

$
(0.59
)

$
0.65


$
0.91Net (loss)/income per share:Basic

$
(0.96
)

$
(0.44
)

$
0.56Diluted

$
(0.96
)

$
(0.44
)

$
0.56Weighted average shares outstanding:Basic


66,652,088



69,749,536



70,800,912Diluted


66,652,088



70,020,500



71,170,181   See notes to consolidated
    financial statements.
   F-4     Pacific
    Sunwear of California, Inc. Form 10-K 2008




---



##### Table of Contents



PACIFIC SUNWEAR
    OF CALIFORNIA, INC.
 CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS EQUITY  Common





AdditionalStock


Common


Paid-in


Retained(In thousands, except share amounts)

Shares


Stock


Capital


Earnings


TotalBALANCE, January 28, 2006


73,751,249


$
737


$
23,866


$
522,187


$
546,790Exercise of stock options and shares issued under employee stock
    purchase plan


724,828



8



8,562







8,570Repurchase and retirement of common stock


(4,916,000
)


(49
)


(99,297
)






(99,346
)Stock compensation










6,220







6,220Tax benefits related to exercise of stock options










1,498







1,498Reclassify negative additional paid-in capital to retained
    earnings(1)










64,934



(64,934
)


Net income














39,621



39,621BALANCE, February 3, 2007


69,560,077



696



5,783



496,874



503,353Exercise of stock options and shares issued under employee stock
    purchase plan


466,433



4



4,291







4,295Stock compensation










6,398







6,398Tax benefits related to exercise of stock options










289







289FIN 48 adoption adjustment (see Note 6)














(623
)


(623
)Net loss














(30,367
)


(30,367
)BALANCE, February 2, 2008


70,026,510



700



16,761



465,884



483,345Exercise of stock options and shares issued under employee stock
    purchase plan


345,349



3



1,846







1,850Repurchase and retirement of common stock


(5,347,544
)


(53
)


(52,858
)






(52,911
)Restricted stock award, vesting of shares


149,829



2



(47
)






(46
)Stock compensation










5,167







5,167Tax benefits related to exercise of stock options










(1,596
)






(1,596
)Reclassify negative additional paid-in capital to retained
    earnings(1)










33,033



(33,033
)


Net loss














(63,822
)


(63,822
)BALANCE, January 31, 2009


65,174,144


$
652


$
2,306


$
369,029


$
371,987     See notes to consolidated
    financial statements.
   Pacific
    Sunwear of California, Inc. Form 10-K
    2008     F-5




---



##### Table of Contents



PACIFIC SUNWEAR
    OF CALIFORNIA, INC.
 CONSOLIDATED
    STATEMENTS OF CASH FLOWS  (In thousands)

January 31,


February 2,


February 3,FISCAL YEAR ENDED

2009


2008


2007CASH FLOWS FROM OPERATING ACTIVITIES:Net (loss)/income

$
(63,822
)

$
(30,367
)

$
39,621Adjustments to reconcile net (loss)/income to net cash provided
    by operating activities:Depreciation and amortization


76,433



80,323



72,529Stock compensation


5,167



6,398



6,220Asset impairment (including goodwill)


35,348



59,829



24,409Loss on disposal of equipment


4,668



4,507



1,127Gain on sale of Anaheim distribution center


(10,768
)






Tax (deficiencies)/benefits related to stock-based compensation


(1,596
)


289



1,498Excess tax benefits related to stock-based compensation


(5
)


(292
)


(942
)Change in operating assets and liabilities:Merchandise inventories


62,977



35,031



9,927Other current assets


(6,125
)


(6,563
)


(4,770
)Other assets


(2,738
)


(14,891
)


7,896Accounts payable


(17,086
)


(4,232
)


19,031Other current liabilities


(17,887
)


3,552



(5,687
)Deferred lease incentives


(21,699
)


(15,359
)


7,931Deferred rent


(4,661
)


(2,950
)


1,553Other long-term liabilities


(4,291
)


366



(18,703
)Net cash provided by operating activities


33,915



115,641



161,640CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment


(80,934
)


(106,363
)


(157,788
)Proceeds from sale of Anaheim distribution center


25,000







Proceeds from sale of property and equipment


275







Purchases of available-for-sale short-term investments






(171,400
)


(296,031
)Maturities of available-for-sale short-term investments






202,900



324,831Purchases of held-to-maturity short-term investments
    (Note 11)






(23,300
)


Maturities of held-to-maturity short-term investments










14,611Net cash used in investing activities


(55,659
)


(98,163
)


(114,377
)CASH FLOWS FROM FINANCING ACTIVITIES:Borrowings under long-term debt obligations (Note 11)






23,300



Borrowings under credit facility


235,689







Principle payments under credit facility


(235,689
)






Repurchase and retirement of common stock


(52,911
)






(99,346
)Proceeds from exercise of stock options


1,850



4,295



8,570Excess tax benefits related to stock-based compensation


5



292



942Principal payments under capital lease and long-term debt
    obligations


(11
)


(45
)


(347
)Net cash(used in)/provided by financing activities


(51,067
)


27,842



(90,181
)NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS


(72,811
)


45,320



(42,918
)CASH AND CASH EQUIVALENTS, beginning of fiscal year


97,587



52,267



95,185CASH AND CASH EQUIVALENTS, end of fiscal year

$
24,776


$
97,587


$
52,267SUPPLEMENTAL DISCLOSURES OF CASH
    FLOW INFORMATION:Cash paid for interest

$
601


$
6


$
6Cash (refunded)/paid for income taxes

$
(14,937
)

$
10,668


$
42,251SUPPLEMENTAL DISCLOSURES OF
    NON-CASH TRANSACTIONS:(Decrease)/increase in accrued property and equipment

$
(5,707
)

$
(6,358
)

$
5,023Purchases of property pursuant to capital lease obligations

$
20


$
11



   See notes to consolidated
    financial statements.
   F-6     Pacific
    Sunwear of California, Inc. Form 10-K 2008




---



##### Table of Contents



PACIFIC SUNWEAR
    OF CALIFORNIA, INC.
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (all amounts in thousands, except share and per share amounts,
    unless otherwise indicated)  1.
    NATURE OF
    BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
    POLICIES  Nature of Business e-commerce
      Fiscal Year

Year-End Date


# of Weeks2009


January 30, 2010



522008


January 31, 2009



522007


February 2, 2008



522006


February 3, 2007



53   Principles of Consolidation
  Basis of Presentation
  Use of Estimates
  Fair Value of Financial Instruments
   Pacific
    Sunwear of California, Inc. Form 10-K
    2008     F-7




---



##### Table of Contents



Cash and Cash Equivalents
  Merchandise Inventories and/or
  Property and Equipment
  Property Category

Depreciation TermBuildings

39 yearsBuilding improvements

Lesser of remaining estimated useful life of the building or
    estimated useful life of the improvementLeasehold improvements

Lesser of remaining lease term (at inception, generally
    10 years) or estimated useful life of the improvementFurniture, fixtures and equipment

Generally 5 years (ranging from 3 to 15 years),
    depending on the nature of the asset   Other Long-Lived Assets
  Insurance Reserves
  Income Taxes
   F-8     Pacific
    Sunwear of California, Inc. Form 10-K 2008




---



##### Table of Contents



Litigation
  Revenue Recognition
  Fiscal Year(in $000s)

2008


2007


2006Beginning balance

$
722


$
794


$
734Provisions


24,144



25,667



24,345Usage


(24,430
)


(25,739
)


(24,285
)Ending balance

$
436


$
722


$
794   E-commerce Shipping and Handling Revenues and
    Expenses 00-10,
   Pacific
    Sunwear of California, Inc. Form 10-K
    2008     F-9




---



##### Table of Contents



Customer Loyalty Programs EITF 00-22,
  Cost of Goods Sold, including Buying, Distribution and
    Occupancy Costs
  Vendor Allowances EITF 02-16,
  Straight-Line Rent 85-3, 13-1,
  Deferred Lease Incentives 88-1,
  Selling, General and Administrative Expenses
  Advertising Costs
  Stock-Based Compensation
  Fiscal Year2008


2007


2006Stock-based compensation expense included in cost of goods sold

$
1,972


$
2,335


$
1,836Stock-based compensation expense included in selling, general
    and administrative expenses

$
3,351


$
3,416


$
3,919    F-10     Pacific
    Sunwear of California, Inc. Form 10-K 2008




---



##### Table of Contents



Earnings Per Share
  Fiscal Year2008


2007


2006Incremental shares






270,964



369,269Anti-dilutive options and non-vested shares


2,564,554



2,308,227



2,376,996     Comprehensive Operations
  Vendor and Merchandise Concentrations
    Fiscal Year2008


2007


2006Young Mens Apparel


41
%


38
%


37
%Juniors Apparel


42
%


33
%


29
%Accessories


13
%


17
%


20
%Footwear


4
%


12
%


14
%Total


100
%


100
%


100
%   Recent Accounting Pronouncements 157-1 157-2,
   Pacific
    Sunwear of California, Inc. Form 10-K
    2008     F-11




---



##### Table of Contents



EITF 95-3
    2.
    DISCONTINUED
    OPERATIONS      Lease


EmployeeTermination


Retention andCosts


Severance Costs


Agency Fees


TotalLiability at February 2,
    2008(1)

$
4.0


$
3.4


$



$
7.4Cash payments


(47.8
)


(6.0
)


(4.0
)


(57.8
)Charges to expense


45.7



2.8



4.0



52.5Adjustments to liability(2)


(1.9
)


(0.2
)






(2.1
)Liability at January 31, 2009

$



$



$



$
          F-12     Pacific
    Sunwear of California, Inc. Form 10-K 2008




---



##### Table of Contents



(In thousands, except per share amounts)

January 31,


February 2,


February 3,Fiscal Year Ended

2009


2008


2007Net sales

$
27,051


$
153,697


$
205,939Loss before income tax benefit


(40,683
)


(125,512
)


(41,711
)Income tax benefit


(16,106
)


(49,338
)


(16,577
)Loss from discontinued operations

$
(24,577
)

$
(76,174
)

$
(25,134
)Loss from discontinued operations per diluted share

$
(0.37
)

$
(1.09
)

$
(0.35
)   3.
    IMPAIRMENT OF
    LONG-LIVED ASSETS  Store
    Assets
    Goodwill
    4.
    SEGMENT
    REPORTING     Pacific
    Sunwear of California, Inc. Form 10-K
    2008     F-13




---



##### Table of Contents



5.
    STOCK
    COMPENSATION      Fiscal Year2008

2007

2006Stock Awards

ESPP

Stock Awards

ESPP

Stock Awards

ESPPExpected Option Life

4 years

0.5 years

4 years

0.5 years

5 years

0.5 yearsStock Volatility

40.3% - 63.5%

45.4% - 57.0%

34.7% - 37.9%

31.9% - 45.4%

41.3% - 48.7%

31.9% - 35.4%Risk-free Interest Rates

1.2% - 3.0%

2.1% - 3.2%

3.1% - 4.9%

3.2% - 5.0%

4.6% - 5.1%

4.5% - 5.2%Expected Dividends

None

None

None

None

None

None            F-14     Pacific
    Sunwear of California, Inc. Form 10-K 2008




---



##### Table of Contents



Weighted-Weighted-

Average

AggregateAverage

Remaining

IntrinsicExercise

Contractual

ValueStock Options

Shares


Price

Term (Yrs.)

($000s)Outstanding at February 2, 2008


2,821,794


$19.96Granted


586,080


12.37Exercised


(126,498
)

9.49Forfeited or expired


(1,062,128
)

19.90Outstanding at January 31, 2009


2,219,248


$18.57

4.09

$450Vested and expected to vest at January 31, 2009


1,817,712


$19.49

3.70

$172Exercisable at January 31, 2009


1,493,713


$20.06

3.32

$       Options Outstanding

Options ExercisableWeighted

Weighted



WeightedAverage

Average



AverageNumber

Remaining

Exercise

Number

ExerciseRange of Exercise
    Prices

Outstanding

Contractual Life

Price

Exercisable

Price$ 1.20  $10.78

253,078

3.51

$
9.10

160,078

$
9.5211.06  12.50

85,381

3.57


12.35

85,381


12.3512.67  13.19

339,202

6.00


13.18

10,102


12.9613.36  19.02

180,122

4.38


14.86

147,164


14.7219.10  19.10

286,000

5.31


19.10

178,667


19.1019.16  20.86

262,034

2.86


20.56

167,059


20.4620.97  22.69

264,919

4.61


22.03

225,647


21.9422.79  24.75

243,562

3.71


24.05

223,956


24.1024.82  27.08

298,950

2.17


26.74

289,909


26.7428.43  28.90

6,000

2.65


28.82

5,750


28.82$ 1.20  $28.90

2,219,248

4.09

$
18.57

1,493,713

$
20.06     Weighted-AverageGrant-DateNon-vested Shares

Shares


Fair ValueOutstanding at February 2, 2008


769,075


$
19.01Granted


328,701



12.22Vested


(156,202
)


19.06Forfeited or expired


(363,603
)


17.80Outstanding at January 31, 2009


577,971


$
15.85      Pacific
    Sunwear of California, Inc. Form 10-K
    2008     F-15




---



##### Table of Contents



Employee Stock Purchase Plan
    (ESPP)
  6.
    INCOME
    TAXES    2008


2007


2006Current income taxes:Federal

$
(34,309
)

$
24,035


$
38,337State


(254
)


5,663



5,820Total current


(34,563
)


29,698



44,157Deferred income taxes:Federal


13,554



170



(2,635
)State


1,722



(3,032
)


(351
)Total deferred


15,276



(2,862
)


(2,986
)Total income tax (benefit)/expense

$
(19,287
)

$
26,836


$
41,171       2008


2007


2006Provision for income taxes at statutory rate

$
(20,486
)

$
25,425


$
37,074State income taxes,net of federal income tax benefit


952



1,240



3,555Life insurance proceeds






(1,215
)


Other


247



1,386



542Total income tax (benefit)/expense

$
(19,287
)

$
26,836


$
41,171    F-16     Pacific
    Sunwear of California, Inc. Form 10-K 2008




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##### Table of Contents



January 31,


February 2,2009


2008Current net deferred tax (liability)/asset

$
(1,218
)

$
12,179Long-term net deferred tax asset


24,641



15,23123,423



27,410Valuation allowance


(2,657
)


Overall net deferred tax asset

$
20,766


$
27,410Deferred tax assets:Net operating loss and tax credit carryforwards

$
40,770


$
4,664Deferred lease incentives


21,937



31,004Deferred rent


7,318



8,148Deferred and stock-based compensation


3,562



5,244Inventory cost capitalization


2,450



2,610Sublease loss reserves


268



661Lease termination liabilities






1,658Other


1,932



8,39578,237



62,384Less valuation allowance


(2,657
)


Total deferred tax assets

$
75,580


$
62,384Deferred tax liabilities:Depreciation and amortization

$
(45,726
)

$
(31,853
)State income taxes


(3,569
)


(3,121
)Prepaid expense


(5,519
)


Total deferred tax liabilities


(54,814
)


(34,974
)Net deferred tax asset

$
20,766


$
27,410          Pacific
    Sunwear of California, Inc. Form 10-K
    2008     F-17




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##### Table of Contents



January 31,


February 2,2009


2008Unrecognized tax benefits, opening balance


$1,652


$
2,444Gross increases  tax positions in prior period


78



295Gross decreases  tax positions in prior period


(432
)


(542
)Gross increases  tax positions in current period


1



1Settlements






Lapse of statute of limitations


(100
)


(546
)Unrecognized tax benefits, ending balance


$1,199


$
1,652       7.
    OTHER CURRENT
    ASSETS    January 31,


February 2,2009


2008Income taxes receivable

$
30,251


$
5,200Prepaid expenses


25,573



25,228Deferred income taxes






12,179Non-trade accounts receivable


3,119



10,211Total other current assets

$
58,943


$
52,818   8.
    PROPERTY AND
    EQUIPMENT, NET    January 31,


February 2,2009


2008Leasehold improvements

$
325,540


$
310,654Furniture, fixtures and equipment


288,634



303,924Buildings and building improvements


39,835



47,768Land


11,227



25,895Total gross property and equipment


665,236



688,241Less accumulated depreciation


(341,892
)


(311,998
)Property and equipment, net

$
323,344


$
376,243   9.
    CREDIT
    FACILITY     F-18     Pacific
    Sunwear of California, Inc. Form 10-K 2008




---



##### Table of Contents



10.
    OTHER CURRENT
    LIABILITIES    January 31,


February 2,2009


2008Other current liabilities

$
13,714


$
19,569Accrued compensation and benefits


13,584



21,619Accrued gift cards


12,134



15,493Sales taxes payable


5,177



3,024Accrued capital expenditures


1,737



7,444Deferred taxes


1,218



Accrued lease terminations






3,958Total other current liabilities

$
47,564


$
71,107   11.
    INDUSTRIAL
    REVENUE BOND TRANSACTION  OLATHE, KANSAS     Pacific
    Sunwear of California, Inc. Form 10-K
    2008     F-19




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##### Table of Contents



10-year
  12.
    COMMITMENTS AND
    CONTINGENCIES  Operating Leases
    Fiscal year ending:January 30, 2010

$
95,866January 29, 2011


90,229February 3, 2012


78,056February 2, 2013


65,804February 2, 2014


56,210Thereafter


138,392Total future operating lease commitments

$
524,557     Litigation
  Indemnities, Commitments, and Guarantees
   F-20     Pacific
    Sunwear of California, Inc. Form 10-K 2008




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##### Table of Contents



Letters of Credit
  Accrued Sublease Loss Charges
  13.
    COMMON
    STOCK  Common Stock Repurchase and Retirement
  MaximumValue of# of Shares





Shares thatPurchased





May Yet beAverage


as Part of


Cost of


PurchasedPrice


Publicly


Shares


Under the# of Shares


Paid Per


Announced


Purchased


PlanPeriod

Purchased


Share


Plan


($000s)


($000s)$
50,508April 2008


799,010


$
12.83



799,010


$
10,248


$
40,260May 2008


1,280,000



9.26



1,280,000



11,853


$
28,407June 2008(1)


2,944,900



9.64



2,944,900



28,384


$
23July 2008(2)


323,634



7.50



323,634



2,426


$
47,597Total


5,347,544


$
9.89



5,347,544


$
52,911       14.
    RETIREMENT
    PLANS     Pacific
    Sunwear of California, Inc. Form 10-K
    2008     F-21




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##### Table of Contents



15.
    ASSETS HELD FOR
    SALE    16.
    FAIR VALUE
    MEASUREMENTS    
    Level 1:  Observable inputs such as quoted
    prices (unadjusted) in active markets that are accessible at the
    measurement date for identical, unrestricted assets or
    liabilities.
    Level 2:  Inputs other than quoted prices
    that are observable for the asset or liability, either directly
    or indirectly. These include quoted prices for similar assets or
    liabilities in active markets and quoted prices for identical or
    similar assets or liabilities in markets that are not active.
    Level 3:  Unobservable inputs that reflect
    the reporting entitys own assumptions.    Fair Value Measurements at January 31, 2009Quoted Prices


Significantin Active


Other


SignificantMarkets for


Observable


UnobservableIdentical Assets


Inputs


InputsTotal


(Level 1)


(Level 2)


(Level 3)Deferred compensation assets

$
4,695


$



$
4,695


$
    F-22     Pacific
    Sunwear of California, Inc. Form 10-K 2008




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##### Table of Contents



17.
    SALE OF ANAHEIM
    DISTRIBUTION CENTER    18.
    QUARTERLY
    FINANCIAL DATA (UNAUDITED)    First


Second


Third


FourthFISCAL YEAR ENDED JANUARY 31, 2009:

Quarter


Quarter


Quarter


QuarterNet sales

$
266,867


$
312,726


$
323,612


$
351,681Gross margin


75,465



95,258



92,776



56,608(Loss)/income from continuing operations


(11,969
)


3,708



(3,520
)


(27,464
)Net (loss)/income


(37,102
)


2,796



(2,474
)


(27,042
)(Loss)/income from continuing operations per share, diluted


(0.17
)


0.06



(0.05
)


(0.42
)Net (loss)/income per share, diluted


(0.53
)


0.04



(0.04
)


(0.42
)Weighted average shares outstanding, diluted


69,915,802



66,704,159



64,968,707



65,059,597FISCAL YEAR ENDED FEBRUARY 2, 2008:Net sales


268,106



311,775



341,874



384,273Gross margin


75,198



101,846



114,726



122,156(Loss)/income from continuing operations


(338
)


9,258



17,143



19,744Net (loss)/income


(5,058
)


(10,502
)


(20,037
)


5,230(Loss)/income from continuing operations per share, diluted






0.13



0.25



0.28Net (loss)/income per share, diluted


(0.07
)


(0.15
)


(0.29
)


0.07Weighted average shares outstanding, diluted


69,578,259



70,064,804



69,949,070



70,069,528      Pacific
    Sunwear of California, Inc. Form 10-K
    2008     F-23




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##### Table of Contents



INDEX TO
    EXHIBITS
  Incorporated by ReferenceExhibit #

Exhibit Description

Form

Filing Date3
.1

Third Amended and Restated Articles of Incorporation of the
    Company


10-Q



8/31/043
.2

Certificate of Determination of Preferences of Series A
    Junior Participating Preferred Stock of the Company


8-K



12/24/983
.3

Fourth Amended and Restated Bylaws of the Company


8-K



11/26/084
.1

Specimen stock certificate


S-1



2/4/9310
.1*

Form of Indemnity Agreement between the Company and each of its
    executive officers and directors


S-1



2/4/9310
.2*

Pacific Sunwear of California, Inc. Executive Deferred
    Compensation Plan and Trust Agreement


10-K



3/17/9510
.3*+

Pacific Sunwear of California, Inc. Executive Deferred
    Compensation Plan, as amended and restated effective
    May 30, 200110
.4*+

Pacific Sunwear of California, Inc. Executive Deferred
    Compensation Plan, as amended and restated effective
    December 31, 2008 (subject to section 409A deferrals)10
.5*

Amended and Restated Pacific Sunwear of California, Inc. 1999
    Stock Award Plan dated March 24, 2004


10-Q



5/21/0410
.6*

Pacific Sunwear of California, Inc. 2005 Performance Incentive
    Plan


8-K



5/24/0510
.7*

Amended and Restated Pacific Sunwear of California, Inc.
    Employee Stock Purchase Plan dated November 17, 2004


10-Q



12/9/0410
.8*

Form of Performance-Based Bonus Award Agreement


10-Q



12/9/0410
.9*

Form of Notice of Director Stock Appreciation Right Award
    Agreement


8-K



5/23/0610
.10*

Form of Notice of Employee Stock Appreciation Right Award
    Agreement


8-K



5/23/0610
.11*

Form of Notice of Employee Restricted Stock Award Agreement


8-K



5/23/0610
.12*+

Pacific Sunwear of California, Inc. Executive Severance Plan, as
    amended and restated as of November 20, 200810
.13*

Employment Agreement, dated April 1, 2005 between the
    Company and Thomas M. Kennedy


10-K



4/12/0510
.14*

Amendment No. 1, dated December 14, 2006, to the
    Employment Agreement between the Company and Thomas M. Kennedy


8-K



12/18/0610
.15*

Amendment No. 2, dated September 28, 2007, to the
    Employment Agreement between the Company and Thomas M. Kennedy


10-Q



12/3/0710
.16*

Employment Separation and General Release Agreement between the
    Company and Thomas M. Kennedy, dated as of December 12, 2008


8-K



12/15/0810
.17*

Severance Agreement, dated February 15, 2005, between the
    Company and Lou Ann Bett


8-K



5/6/0510
.18*

Retention Bonus Agreement, dated October 29, 2007, between
    the Company and Lou Ann Bett


8-K



10/30/0710
.19*

Summary of Compensation Arrangements for Sally Frame Kasaks,
    Interim Chief Executive Officer


10-Q



12/5/0610
.20*

Employment Agreement, dated as of May 22, 2007, between the
    Company and Sally Frame Kasaks


8-K



5/23/0710
.21*+

Amendment No. 1, effective December 31, 2008, to the
    Employment Agreement and Restricted Stock Unit Award Agreement
    between the Company and Sally Frame Kasaks10
.22*

Form of Stock Appreciation Rights Agreement between the Company
    and Sally Frame Kasaks


8-K



5/23/0710
.23*

Form of Restricted Stock Unit Award Agreement between the
    Company and Sally Frame Kasaks


8-K



5/23/0710
.24*+

Summary of Board of Directors Compensation for fiscal 200910
.25*+

Summary of Named Executive Officers Annual Compensation for
    fiscal 2009




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##### Table of Contents



Incorporated by ReferenceExhibit #

Exhibit Description

Form

Filing Date10
.26

Credit Agreement, dated as of April 29, 2008, with JPMorgan
    Chase Bank, N.A., as Administrative Agent, Bank of America,
    N.A., as Syndication Agent, BB&T Company, U.S. Bank
    National Association and Wells Fargo Foothill, Inc., as
    Co-Documentation Agents, and J.P. Morgan Securities Inc.
    and Banc of America Securities LLC, as Joint Bookrunners and
    Joint Lead Arrangers, and a syndicate of other lenders


8-K



5/2/0810
.27

Security Agreement, dated as of April 29, 2008, by the
    Company, Pacific Sunwear Stores Corp., Miraloma Corp., and
    certain future subsidiaries of the Company, and JPMorgan Chase
    Bank, N.A., as Administrative Agent


8-K



5/2/0810
.28

First Amendment to Credit Agreement, dated as of August 1,
    2008, with JPMorgan Chase Bank, N.A., as Administrative Agent,
    and a syndicate of other lenders


10-Q



8/29/0810
.29

Trust Indenture, dated as of July 17, 2007, between
    the City of Olathe, Kansas and U.S. Bank National Association,
    as Trustee


8-K



7/23/0710
.30

Lease Agreement, dated as of July 17, 2007, between the
    City of Olathe, Kansas and Pacific Sunwear Stores Corp.


8-K



7/23/0721
.1+

Subsidiaries of the Registrant23
.1+

Consent of Independent Registered Public Accounting Firm31
.1+

Written statements of Sally Frame Kasaks and Michael L. Henry
    pursuant to section 302 of the Sarbanes-Oxley Act of 200232
.1+

Written statement of Sally Frame Kasaks and Michael L. Henry
    pursuant to section 906 of the Sarbanes-Oxley Act of 2002