MAHWAH, N.J. — Ascena Retail Group Inc., the owner of several high-profile mall staples, is preparing to file for bankruptcy and shutter nearly half of its almost 3,000 U.S. stores, Bloomberg reported Thursday.
Mahwah, New Jersey-based Ascena owns the Ann Taylor, LOFT, Lou & Grey, Justice, Lane Bryant, Catherines and Cacique brands and operates some 2,800 stores in the United States, Canada, and Puerto Rico, Forbes reported.
Citing people with knowledge of the strategy, Bloomberg reported the company could enter Chapter 11 bankruptcy as early as this week and eliminate roughly $700 million of its $1.1 billion debt load via a negotiated lender agreement. If the plan proceeds, lenders such as Eaton Vance Corp. would assume control of the company.
Bloomberg’s sources indicate the less profitable Catherines and Justice brands are among the chains being considered for sale or closure, but no determinations have been finalized. The reorganization is intended to keep the more popular brands operating.
According to Forbes, Ascena launched in 1962 as a single clothier catering to working women that grew into the DressBarn chain of more than 800 stores. The company began an aggressive acquisition phase in 2004, intended to boost its portfolio of clothing brands into the “too-big-to-fail” category but instead burdened operations with debt and stagnant brands.
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