The retailer also made a play for the flip side of the hip-hop market: Designer and luxury goods. But One Thousand Steps, a trendy footwear chain selling brands such as Dolce, Lacoste and Vita to 18- to 24-year-olds, was another wipeout.

When Pacific Sunwear first spread its wings, exporting Southern California cool to the frigid malls of the Northeast and Midwest, it had the wind at its back. Films like Fast Times at Ridgemont High put surfing at the forefront of youth culture. Pacific carried cool brands like Billabong and Quicksilver, which incidentally continue to manufacture the kinds of clothes you'd expect to find at a surf shop.

But there's a downside to being a curator of brands -- even cool ones: It's not how mall rats shop anymore.

Save picking and choosing from among a variety of manufacturers for department stores and discounters, today's youth opt for private labels every time. Consider the brand loyalty rival mall stores Abercrombie & Fitch (ANF) and American Eagle Outfitters (AE) command. Abercrombie even has a laid-back, Southern California-inspired spinoff of its own called Hollister.

The other problem with relying on brand-name products from outside vendors to drive sales? It reduces profit margins. By contrast, competitors such as Gap (GPS) and Aeropostale (ARO) plump profits by selling higher-margin, private-label clothes.

Pacific Sunwear has the distinction of helping to mainstream surfer, skater, and to some extent, hip-hop culture. No small feat. But the Big Kahunas at this highly visible mall brand will need to do a better job of adapting to consumer trends -- not just fashion trends -- if they want to keep their heads above water.