Ascena Retail Group, the company that owns Ann Taylor and Lane Bryant, has filed for Chapter 11 bankruptcy protection and plans to close a significant number of stores, the company said.

The company has posted operating losses of $2.4 billion with only one year of positive operating profit since the summer of 2014 but said the COVID-19 crisis scuttled turnaround attempts.

Ascena, which was once the biggest clothing retailer for women in the country, has been closing stores for years. It said it will permanently close some Ann Taylor, Loft, Lane Bryant, and Lou & Grey stores and a “significant” number of Justice stores. It also said it would permanently close all stores across all of its brands in Canada, Puerto Rico, and Mexico.

The company borrowed $230 million from existing credit lines, but it ended the third quarter in May with $439 million in cash on its balance sheet and debt of $1.3 billion, warning there was substantial doubt about its ability to survive. It closed all stores on March 18 due to the pandemic, furloughing 90% of its employees and withholding payments to landlords and vendors.

Dozens of retailers, including Brooks Brothers, JCPenney, and J.Crew have filed for bankruptcy as COVID-19 wrought havoc across the industry, though some companies have seen their stock price improve due to interest by day traders.

Ascena said it entered into a restructuring support agreement (RSA) with over 68% of its secured term lenders that will reduce its debt by approximately $1 billion and provide increased financial flexibility. It has also received $150 million in new capital.

“The RSA formalizes our lenders’ overwhelming support for a comprehensive plan to deleverage our balance sheet, right-size our operations, and inject new capital into the business,” interim executive chair Carrie Teffner said.

Michael Brochstein/SOPA Images/LightRocket via Getty Images

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