As the banking system crumbles around us, let’s turn our attention to other, more fashionable sectors.

With capitulation finally upon us, (see also, “Stock Market Capitulation.“) I’m preparing a long list of stocks to buy amid the carnage. One name I have had an eye for, is Pacific Sunwear (PSUN).

Shares of this young, trendy retailer have struggled like many companies tied to the consumer sector. But unlike some competitors, namely Target (TGT), the Gap (GPS) and Aeropastale (ARO), PSUN surprised analysts by announcing a 3% rise in June same-store sales, even though usual strong areas of California and Florida showed weakness.

Teenagers Shop ‘Til They Drop

For those of you who aren’t as with-it as Gen Xers and Millennials, PSUN operates more then 800 retail stores that sell both casual and sport apparel, accessories and footwear to teens and young adults.

PSUN appears to be on top of their game and on the top of every teen’s shopping list as the stores I’ve been dragged into are filled to capacity with teenagers competing to wear the latest trend.

PSUN’s core customer isn’t affected by economic weakness. Let’s face it, it’s highly unlikely to find a teenager who knows how to spell Bernanke, much less tell me what the guy does. All they care about is spending their money at the mall.

Ah…to be young again with discretionary income to burn on the latest trend! This fact alone makes PSUN a very interesting buy from my point of view. In fact, I’ve always been intrigued by retail concepts that appeal to this demographic. The youth are driven much more by trends (not always a good thing if you are behind the trend) than other macro factors like a credit crunch or banking crisis.

Retail Therapy

I know, I know: It’s risky to say that I like a retailer at this point in the economic cycle, but hey, at least it’s not a financial stock (for more on retail stocks that peaked my interest earlier this summer, see “Retail Steals for Summer Profits.“)

And believe it or not, investing in PSUN is not as risky as it may seem. Shares have already been beaten up and any further downside seems limited. Not to mention, Pacific Sun’s Board of Directors authorized a $50 million buyback program just last week. The stock trades for just 10 times forward earnings estimates, 36% of sales, slightly above book value, and has a debt-free balance sheet.

Personally, I think the big carnage is over and a Rational Investors will see PSUN shares as a good excuse to bring our kids back to the mall.

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