Dressbarn is closing all 650 stores and its e-Commerce site, marking the end of a 57-year run for the women’s apparel retailer. For now, the stores and e-Commerce site remain open and conducting business as usual, while Dressbarn says it will share more specific information related to the store closings at a later date.
The retailer, which reorganized under its parent company Ascena Retail Group in 2011 and operates alongside brands such as Ann Taylor, LOFT and Lane Bryant, has retained A&G Realty Partners to assist on the closures.
Ascena, which operated 5,000 stores across its brands as of 2016, has been on a downward spiral in recent years, dealing with many of the problemsthat its mall-based specialty contemporaries have struggled with before restructuring or filing for bankruptcy. By the end of 2018, the company’s store footprint shrank to 4,486 as part of its “Change for Growth” plan, which is on track to cut $300 million in costs by July 2019.
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Ascena’s major weakness across its banners is relatively low sales per store compared to competitors. The company’s average store sells 43% less than the average Express store, 68% less than the average Gap store and an estimated 72% less than the average U.S. Inditex store, according to 2018 data from RetailNext. In its most recent quarter, Ascena’s retailers saw 2% comparable store sales growth, but total net losses widened to $71.5 million from a $39.3 million loss last year.
Ann Taylor and LOFT remain the company’s strongest brands, driving the best comparable sales growth rates at Ascena at 10% each in Q2.
Not counting the Dressbarn closures, Ascena expects to close 260+ more stores after July 2019. As part of its bounce-back attempt, Ascena recently sold its majority stake in the value fashion chain Maurices, to OpCapita for $300 million.
Ascena is seeking to steer its business back in the right direction under a new CEO, Gary Muto. The retail group saw both CEO David Jaffe and President/COO Brian Lynch step down from their roles in early May, with the former remaining on the company’s Board of Directors.
The Jaffe resignation was significant, marking the first time a Jaffe did not run the company in its history. Jaffe’s parents, Elliot and Roslyn, founded Dressbarn in 1962 in Stamford, Conn. Elliot served as a director since 1966, Chairman of the Board until 2011, CEO until 2002, and as non-executive Chairman of the Board until his retirement in December 2016. Together, Elliot and Roslyn Jaffe still own approximately 25% of Ascena stock.
