Ascena Retail, the proprietor of Ann Taylor and Lane Bryant is the newest retailer to file for Chapter 11 chapter safety in the course of the coronavirus pandemic, following different main retailers.
Ascena is at the least the ninth main retailer to file for chapter since early May, together with Brooks Brothers, Sur La Desk, J.Crew, Neiman Marcus Group, JCPenney, Fortunate Model, Stage Shops and GNC.
Ascena mentioned in a press release that it expects to scale back its money owed by about $1 billion in its pre-arranged restructuring, offering Ascena with “increased financial flexibility” to achieve profitability.
The corporate mentioned it has obtained commitments for $150 million in a brand new cash time period loan from its present lenders and that, following court docket approval, this financing, mixed with cash available and cash stream generated by ongoing operations, is anticipated to fulfill the corporate’s operational and restructuring wants.
Ascena will shut “a select number” of Ann Taylor, Lane Bryant, LOFT and Lou & Gray shops in addition to all of its plus-size model Catherines areas and all shops in Canada, Puerto Rico and Mexico, the corporate mentioned in a Chapter 11 submitting in U.S. Chapter Court docket within the Jap District of Virginia.
The corporate has entered into an asset buy settlement with stalking-horse bidder Metropolis Stylish Collective Restricted to promote the mental property belongings and e-commerce enterprise for Catherines, topic to a greater supply.
The pandemic hit Ascena arduous: The corporate introduced widespread furloughs and pay cuts in March and, in a May replace, Ascena mentioned that whole revenues within the third quarter of fiscal 2020 have been down 45% in comparison with the third quarter of the prior 12 months, largely as a result of 60% of the corporate’s 2020 income earlier than the pandemic got here from its brick-and-mortar operations.
Ascena was based in 1962, underneath the title Gown Barn, and went public in 1983, then modified its title in 2011 saying that the enterprise had “ascended to new heights.” In 2015 it acquired Lane Bryant and the proprietor of Ann Taylor, which incorporates LOFT. In 2016, Ascena had greater than 5,000 shops. However then the corporate struggled. In 2019, it offloaded the chain Maurices and its almost 950 shops and closed all 650 Gown Barns.
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The shop closures may have an effect on the already struggling malls and outlet facilities through which a majority of Ascena-owned shops are positioned. The corporate presently has 2,800 shops all through the U.S., Canada, and Puerto Rico.
“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 a result, we took a strategic step forward today to protect the future of the business for all of our stakeholders,” Carrie Teffner, Interim Government Chair of Ascena, mentioned in a press release.
Ascena Retail Group Reaches Complete Restructuring Settlement to Strengthen Monetary Place (SEC Submitting)
Ascena Retail Group (ASNA) to furlough all retailer associates and near half of its company associates (Press Launch)
Ascena retail group Gives Extra Enterprise Replace on COVID-19 (Press Launch)
Ascena, Proprietor Of Ann Taylor, Justice, Lane Bryant, Wager That Larger Was Higher. Then Retail Modified. (Forbes)