Ascena Retail Group, which owns Lane Bryant, Ann Taylor, Loft and Dress Barn and other retailers, plans to close up to 667 stores through 2019. About 160 stores have already closed.
At least 268 of those stores will be closed by July 2019. The remaining 399 stores will be shut down if “rent concessions aren’t obtained through negotiations with landlords,” the company has said. Ascena Retail operates e-commerce websites and approximately 4,500 stores throughout the United States, Canada and Puerto Rico.
The Mahwah, NJ-based company has not specified which locations will be closed but several of the fashion brands are located in Rockland County’s main shopping hubs: Dress Barn at Rockland Plaza, Ann Taylor and Loft at the Shops at Nanuet and Lane Bryant at the Palisades Center. With chain and department stores closing, all of these centers have tenants in addition to Ascena’s stable of stores that are facing economic pressures.
This week, the company signed an agreement to sell a majority interest in Maurices to an affiliate of London-based private equity firm OpCapita LLP for about $300 million. (The 943-store Maurices division is part of Ascena’s “value” brand division.). The move is part of a comprehensive and ongoing portfolio review that is expected to yield run-rate cost savings of $300 million by July.
There is no Maurices store in Rockland.
In a statement, Ascena chairman and CEO David Jaffe, citing “structural changes in our industry,” said the company has also developed plans for an additional $150 million in savings, which will drive operating margin rate expansion.
“These efforts are expected to deliver a leaner operating model and enhanced competitive capabilities, but we must do more,” he said. “To create value for our shareholders, we are planning deliberate actions to generate more profitable growth from those brands and operations in our portfolio that we believe have greater long-term potential.”
Ascena said it expects to receive roughly $200 million in cash from the Maurices transaction (after expenses), while maintaining a significant minority interest. The cash proceeds will be used to pay down the company’s existing term loan balance and/or for reinvestment in the company’s business in accordance with the terms of its credit facilities.
“The sale of a majority interest in Maurices underscores the value that exists in our portfolio brands,” Jaffe said. “The review and evaluation process we are undertaking, with the help of outside advisors, is designed to recognize this value on behalf of Ascena shareholders.”
The transaction is expected to close by early summer.