The parent company of Ann Taylor, LOFT, Justice and Lane Bryant has filed for Chapter 11 bankruptcy protection amid the COVID-19 pandemic.
The parent company of Lane Bryant, Ann Taylor and the Justice tween brand has filed for Chapter 11 bankruptcy protection, a move spurred by the COVID-19 pandemic.
New Jersey-based Ascena Retail Group, which also operates Ann Taylor Loft, Catherines, Lou & Grey and Cacique, plans to “reduce their store fleet from approximately 2,800 stores to approximately 1,200 stores,” the company said in court records Thursday. The planned closures are a 56% “reduction in the total store fleet.”
The company said in the bankruptcy filing that it plans to shutter all of its Catherines plus-size stores and “intends to transition Justice to a primarily online platform and continue Lou & Grey within go-forward LOFT stores.”
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Like other apparel retailers with a heavy commitment to shopping malls, Ascena was grappling with declining foot traffic long before the coronavirus pandemic. It joins a rapidly growing list of retailers that have stumbled into bankruptcy amid the wreckage of COVID-19, which temporarily shuttered non-essential stores due to health concerns.
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“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,” Carrie Teffner, interim executive chair, said in the release. “As a result, we took a strategic step forward today to protect the future of the business for all of our stakeholders.”
The company says it has nearly 40,000 employees.
According to frequently asked questions posted on Ascena’s restructuring website, the final number of store closings “will be determined based on the ability of Ascena and our landlords to reach agreement on sustainable lease structures.”
The closing sales are expected to last 30 to 60 days from “the filing date depending on the store location,” Ascena said.
Catherines store closings: Plus-size retailer to permanently close all of its stores in bankruptcy. See the list.
Ann Taylor and Loft store closings: These locations will shutter as part of Ascena bankruptcy
Court records show that SB360 Capital Partners will manage Catherines’ going-out-of-business liquidation sales as well as the closing sales at its sister brands. SB360 managed Charlotte Russe’s 2019 liquidation and is currently handling Modell’s Sporting Goods’ closing sales.
“Because of the compelling discounts and the highly desirable merchandise, we expect this will be a short sale across all stores,” said Aaron Miller, SB360 executive vice president, in a statement. “Customers are encouraged to shop early while quantities last as many of their favorite styles may go quickly.”
As many as 25,000 stores could shutter this year as businesses continue to feel the impacts of the pandemic, according to a recent report from Coresight Research.
Brooks Brothers, Lucky Brand, J.C. Penney, Neiman Marcus, Sur La Table and J. Crew have all filed for Chapter 11 since May.
Other retailers that haven’t filed for bankruptcy also plan to shutter locations, including Victoria’s Secret, Nordstrom and Signet Jewelers, parent company of Kay, Zales and Jared. This week, Tailored Brands, parent company of Men’s Wearhouse, said it will close up to 500 stores.
Ascena started a “fleet optimization” program in 2017 and closed nearly 900 stores. In 2019, the company closed its nearly 650 Dressbarn stores and also sold Maurices, its other value brand.
Teffner said in a May 28 business update, that COVID-19 “significantly disrupted our business” and reduced earnings.
“With retail stores making up the majority of our revenue and cash flow, the uncertainty created by COVID-19 requires us to evaluate all options available to protect the business and its stakeholders,” Teffner said in May.
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Contributing: Nathan Bomey.
Follow USA TODAY reporter Kelly Tyko on Twitter: @KellyTyko
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