Ann Taylor Owner Ascena Retail Files For Bankruptcy
Ascena retail group, inc., which owns Ann Taylor, LOFT, Lane Bryant, and Justice brands, among others, has filed for Chapter 11 Bankruptcy protection aiming to significantly reduce its debt by around $1 billion. The decision comes after the women’s clothing retailer was severely hit by lockdowns amid the coronavirus outbreak.
Carrie Teffner, Interim Executive Chair of ascena, said, “The meaningful progress we have made driving sustainable growth, improving our operating margins and strengthening our financial foundation has been severely disrupted by the COVID-19 pandemic.”
As part of the restructuring, the company plans to close a significant number of Justice stores and a select number of Ann Taylor, LOFT, Lane Bryant and Lou & Grey stores. All stores across brands in Canada, Puerto Rico and Mexico will be exited. Further, the company plans to close all Catherines stores.
The final number of store closings will be determined based on the ability of ascena and its landlords to reach deal on sustainable lease structures.
In addition, ascena has entered into an asset purchase agreement with City Chic Collective Limited to sell the Catherines intellectual property assets and to transition its e-commerce business to a subsidiary of City Chic.
Ascena retail has filed voluntary Chapter 11 petitions in the United States Bankruptcy Court for the Eastern District of Virginia to implement the terms of its restructuring support agreement or RSA with over 68 percent of its secured term lenders.
The Mahwah, New Jersey-based company has received commitments for $150 million in a new money term loan from its existing lenders, which will remain in place post emergence from Chapter 11.
During the process, the company will continue to operate its Ann Taylor, LOFT, Lane Bryant, Justice and Lou & Grey brands through a reduced number of retail stores and online.
Currently, Ascena retail is operating with approximately 95 percent of its store base reopened and continues to serve customers in those stores and through its e-commerce brand websites.
Ascena Retail, which bought Ann Inc., the parent company of clothing retailers Ann Taylor and Loft, in 2015, operated 2,800 locations as of February 19, 2020. The company last year had closed all of its approximately 650 Dressbarn locations.
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