Ascena Retail Group, parent of iconic women’s apparel brands Lane Bryant and Ann Taylor, has filed for chapter 11 bankruptcy protection and announced plans to shutter 1,600 of the 2,800 stores across its various chains in an effort to reduce its massive debt by $1 billion. The news comes weeks after an executive bonus windfall.
Ascena Retail Group
Brooks Brothers, famous for its pinstriped suits worn by 40 of the 45 U.S. presidents and legions of executives since its 1818 founding in New York, filed for Chapter 11 bankruptcy protection, citing the impact of COVID-19 as a major factor. The company, with $1 billion in sales and $300 in debt, expects to find a buyer shortly.
Following in the footsteps of JC Penney and others, struggling rollup Ascena Retail Group said it plans to pay up to $5.5 million in retention awards and performance bonuses and undo pay cuts to top executives, as it reportedly weighs a bankruptcy filing in the face of its debt and declining sales.
Coresight Research reported a total of 9,275 U.S. store closures by major retailers in 2019, 35% higher than the 6,897 closures recorded in 2018 as the bleeding continues. Closings outpaced store openings more than 2 to 1, Coresight found, with 4,454 new doors in 2019, compared to 4,311 in 2018.
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Ascena Retail Group, the parent company for both Dress Barn and Ann Taylor, plans to close up to 650 stores in the next two years as a result of consumer’s shift to online shopping. See what the company’s next move is in light of these closures.