Ascena Retail Group Inc. is decreasing its store footprint and closing down one of its brands.
The apparel giant on Thursday filed for Chapter 11 bankruptcy protection, with a restructuring agreement supported by more than 68 per cent of its secured term lenders. Ascena is the latest retailer whose pre-Covid-19 struggles met their match during the pandemic. It expects to reduce its debts by about $1bn in its pre-arranged restructuring.
Ascena said it plans to “optimise” its brand portfolio and strategically reduce its footprint with the closing of a “significant number” of Justice stores and a select number of Ann Taylor, Loft, Lane Bryant and Lou & Grey locations. It also is closing all stores across all brands in Canada, Puerto and Mexico. (In total, Ascena has about 2,800 stores across the US, Canada and Puerto Rico.)
In addition, the retailer is shutting down its plus-size Catherines banner. It plans to sell the brand’s intellectual property assets to a stalking-horse bidder, City Chic Collective Limited. The total number of store closings will be based on the ability of Ascena and its landlords to reach agreement on sustainable lease structures, the retailer said.
“The company believes the plan is in the landlords’ long term interest and is hopeful and optimistic that its landlords will partner with the company to keep as many stores open as possible,” Ascena stated. “The optimisation of Ascena’s brand portfolio and store fleet will allow the company to stabilise its financial position in the wake of the Covid-19 pandemic and move forward as a strong, profitable business.”
