Ascena to shut down Dressbarn
today May 21, 2019
Ascena Retail Group, Inc. announced on Monday that its Dressbarn brand is planning to begin a wind down of its operations, yet another step in its parent company’s efforts to turn its business around and improve shareholder value.
The wind down will ultimately entail the closure of all of Dressbarn’s approximately 650 stores, which collectively employ some 6,800 associates.
The value womenswear retailer said that it will provide information about individual store closures throughout the process, notifying associates in advance and providing them with transition support.
For the time being, however, Dressbarn stressed that business continues as usual both in its brick-and-mortar locations and on its e-commerce website, with no changes currently having been made to the chain’s return, refund or gift card policies.
The brand also stated that it intends to continue paying vendors and suppliers as usual during the wind down.
“This decision was difficult, but necessary, as the Dressbarn chain has not been operating at an acceptable level of profitability in today’s retail environment,” explained Dressbarn Chief Financial Officer Steven Taylor in the press release published by the brand. “During the wind down process, we will continue to provide our customers with the same great experience both in-store and online, offering them even better deals and value. We will work to assist our associates through the transition and maintain existing relationships with our vendors, suppliers, and other key stakeholders through this process.”
Dressbarn will continue to work with A&G Realty Partners on real estate-related matters, while Algon Group President Troy Taylor has been appointed to the company’s board of directors as an independent director to assist with the wind down process.
Ascena is currently attempting to optimize its brand portfolio and recently completed the sale of its low-cost Maurices brand to an affiliate of OpCapita LLP for $300 million.
The wind down of Dressbarn therefore hails the end of the retail group’s operations in the value segment, leaving the company to focus on its premium segment brands – namely Ann Taylor, Loft and Lou & Grey – as well as its plus-size offering, distributed via Lane Bryant, Catherines and Cacique, and its Justice tween brand.
Ascena’s turnaround efforts have also involved the shuttering of 110 of its retail locations in the second quarter, when the company reported a net loss of $72 million as slight improvements in comparable sales were undermined by narrowing margins.
Dressbarn posted a 1% decrease in comparable sales in the quarter, continuing a trend of disappointing results at the brand.
At the beginning of May, the retail group also announced that Gary Muto was taking over from David Jaffe as CEO, while Carrie Teffner was stepping into the role of interim executive chair of the board of directors.
In a separate press release published on Monday, Ascena assured shareholders that the Dressbarn wind down will have no effect on the operations of any of the retail group’s other brands.
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