Ascena Retail Group (OTC:ASNA), owner of the Ann Taylor and Lane Bryant clothing brands, announced today that it is filing for Chapter 11 bankruptcy protection amid pandemic-related sales decreases in its 2,800 women's clothing stores.
Ascena has been struggling for several years as customers have shifted to online shopping and the company is saddled with expensive real estate.
The company was founded in 1962 with the opening of Dressbarn to sell stylish, affordable office wear for women. It began to acquire other brands with the purchase of Tween Brands, owner of Justice, in 2009, followed by Lane Bryant and Catherines in 2012, and Ann Inc. (owner of Ann Taylor, Loft, and Lou & Grey) in 2015.
The strategy was to build its portfolio of higher-priced office wear to increase revenue. But it added to its mall-store holdings just around the time mall shopping started to go out of fashion and digital began to take over. While the company's brands have e-commerce channels, the declining mall sales couldn't justify their high-cost homes. With 60% of its sales coming from stores, the company came into the pandemic already dealing with the burden of its debt amid a harsh retail climate.
Ascena sold off its Maurices brand, consisting of 950 stores, in 2019, and closed its 650 Dressbarn stores the same year, in which it posted a $900 million net loss.
Ascena is the latest retail chain to file for Chapter 11 bankruptcy after Neiman Marcus, J.Crew, J.C. Penney, Brooks Brothers, and others that have seen their businesses ruined by COVID-19.