July 23, 2020
by Daphne Sorenson
Ascena Retail Group—the Mahwah, New Jersey-based corporation that owns several major women’s fashion retail stores—filed for Chapter 11 bankruptcy on July 23, 2020. Ascena is the parent company of the retail stores Ann Taylor, Factory Ann Taylor, Loft, Loft Outlet, Lane Bryant, Justice, Lou & Grey and Catherines. According to Bloomberg, Ascena expects to shut down about 1,600 of its 2,800 stores worldwide. All of the Catherines stores will be shuttered.
Bloomberg also reports: “The company listed about $12.5 billion of liabilities, including $1.6 billion of funded debt. More than two-thirds of its secured term lenders support its restructuring plan, and they’ll wind up owning most of the new equity, Ascena said in a statement and court papers. Almost $1 billion in debt will be erased, and Ascena will get $150 million in fresh funds from existing lenders.”
The company was founded in 1962, in Stamford, Connecticut, under the name Dressbarn and then changed its named to Ascena Retail Group in 2011. Ann Taylor and its lower-priced spinoff Factory Ann Taylor cater to career women on the go, while Loft and its lower-priced spinoff Loft Outlet target a younger customer base. Lou & Grey offered mostly casual clothing for women. Lane Bryant and Catherines were launched as clothing stores for plus-sized women. Justice has fashion for girls ages 7 to 14.
Even before the coronavirus pandemic (when Ascena temporarily closed all of retail locations on March 18, 2020), the company was already headed toward financial disaster, since it had been closing an increasing number of stores since 2018. Ascena Retail Group closed all Dressbarn locations in 2019. Depending on the state, county or city in the United States, some clothing retail stores have re-opened since the pandemic, while others have not, as of this writing. The re-opening policies vary.
Ascena Retail Group is among the growing list of fashion retailers that have declared bankruptcy since 2018. On the high-end retail spectrum, Henri Bendel completely shuttered its stores in 2019. Barney’s filed for Chapter 11 bankruptcy in 2019, while Nieman Marcus did the same in May 2020. Lord & Taylor is reportedly close to Chapter 11 bankruptcy as well.
Non-luxury fashion retailers have also been victims of the “retail apocalypse,” which has been largely blamed on the rise of online shopping. J. Crew declared Chapter 11 bankruptcy in May 2020. Low-end clothing retailers that shuttered in 2019 included Gymboree and Payless ShoeSource.
Other fashion retailers that had a massive percentage of store closures in 2018 and 2019 included Victoria’s Secret, Gap, Kohl’s, Abercrombie & Fitch, Foot Locker, Children’s Place and David’s Bridal. A few fashion retailers (such as Charlotte Russe and Bebe) have emerged from bankruptcy and are slowly trying to build back their business under new ownership. Department stores that carry fashion (such as Macy’s, JC Penney, Kmart and Sears) have also been closing stores.