The owner of Ann Taylor and Lane Bryant, which just a few years ago was one of the country’s largest clothing retailers for women and girls, filed for bankruptcy on Thursday, after declining sales and high debt were exacerbated by store closures mandated by coronavirus lockdowns, according to the NYTimes.
- The kicker: The company, Ascena Retail Group, will close 1,600 of its approximately 2,800 stores and hopes to shed $1 billion of its $1.1 billion in debt. Closings will include “a select number” of Ann Taylor, Lane Bryant, Loft and Lou & Grey stores, as well as all of its Catherines locations.
- Secular decline in retail accelerated: Ascena, is at least the ninth prominent retailer to file for bankruptcy since early May: Brooks Brothers, Sur La Table, J. Crew, Neiman Marcus Group, J.C. Penney, Lucky Brand, Stage Stores, and GNC.
- Covid was the straw that broke the camel’s back: Ascena’s troubles began after the company acquired brands focusing on premium fashion (Ann Taylor and Loft), plus-size clothes (Lane Bryant and Catherines) and girls’ clothes (Justice). Ascena acquired them when young female customers were turning to online retailers and inexpensive fast fashion brands such as Zara or H&M, where they could pay $30 for a work dress instead of $100. The acquisition stuck the company with more than $1 billion in debt without increasing sales, and they never recovered. [NYTimes]