Even specialty apparel retail is getting hit with the acquisition bug.
Dress Barn
Wall Street likes the deal. Usually you'll see an acquiring company's stock take a hit as its buyout target rises in a stock deal, but the market was sending both stocks higher this morning.
Maybe Mr. Market is just in shock. For starters, most specialty retailers have been heading in the opposite direction and shedding concepts lately. Abercrombie & Fitch
There's also the odd pairing of the preteens who flock to Tween's Justice and Limited Too shops with the older clientele at Dress Barn's 841 eponymous stores. Dress Barn also owns maurices -- a 716-unit "authority for the savvy, fashion-conscious customer with a twenty-something attitude" -- but that's still at least half a generation away from Tween's pint-sized clientele.
But maybe Dress Barn is on to something by chasing the preteen market. One of the few new concepts to launch this year is Aeropostale's P.S., which aims squarely at the Jonas Brothers-loving 7- to 12-year-old demographic.
It also helps that Dress Barn expects this deal to be accretive in future years, after simply being neutral to the company's bottom line this year. For those scoring at home, Tween Brands is one of the many companies that Limited Brands
I've been shaking my head at the retailers that are cutting back these days, because they're missing the point. Mall landlords have a lot of empty spaces to lease out, and shoppers have fewer choices. Sure, a lot of that traffic is gravitating online, but you'll never get better lease terms out of desperate mall owners than you will right now.
It's a time to grow, with or without the tweeners. So I applaud this deal, as peculiar as it seems.
A tip of the hat to the concepts going away:
