Dressbarn to Close 100% of Stores, as Parent Company Craters
Ascena Retail Group Inc. (NASDAQ: ASNA) said it would close all of its Dressbarn stores, which it numbered at 730 in its last annual report. More recent reports put the figure at 630.
The company announced:
Dressbarn’s wind down is another significant step taken to advance ascena’s ongoing transformation. This move is in line with the Company’s commitment to comprehensively assess and optimize its portfolio by focusing resources on its most profitable brands to position the business for long-term growth and enhance shareholder value. Today’s announcement follows ascena’s recently completed sale of its maurices brand.
Ascena also owns Ann Taylor, LOFT, Lou & Grey, Lane Bryant, Catherines, Cacique and Justice. Before shuttering the Dressbarn locations, the company had about 3,500 locations across all brands.
The Ascena share price is down to $1.14 off 63% in the past year.
Results for its most recently reported quarter were horrible. The company lost $72 million on revenue of $1.7 billion. When the results were announced, David Jaffe, board chair and chief executive officer, said:
While we believe the challenging selling environment is the result of macro headwinds impacting our sector, our third quarter outlook represents an unacceptable profit shortfall to the expectations we shared at the beginning of our fiscal year. As a result, we are working to accelerate plans that were already in development to take much more fundamental action to address our cost structure. We are committed to addressing performance at our under-performing brands, and continue to explore opportunities within our portfolio that can allow us to focus capital and management attention on those brands that we believe can deliver sustained growth and profitability by maintaining a differentiated position in the marketplace.
Jaffe stepped down in May.
The Dressbarn decision does something to address the cost structure.