June 21, 2024

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Passion For Business

Parent of Ann Taylor, Lane Bryant Files for Chapter 11

Ascena Retail Team, the organization that owns Ann Taylor and Lane Bryant, has filed for Chapter 11 personal bankruptcy protection and strategies to close a considerable amount of merchants, the organization stated.

The organization has posted functioning losses of $two.four billion with only 1 12 months of beneficial functioning income given that the summer season of 2014 but stated the COVID-19 disaster scuttled turnaround makes an attempt.

Ascena, which was as soon as the most important clothes retailer for ladies in the place, has been closing merchants for many years. It stated it will permanently close some Ann Taylor, Loft, Lane Bryant, and Lou & Gray merchants and a “significant” amount of Justice merchants. It also stated it would permanently close all merchants throughout all of its brands in Canada, Puerto Rico, and Mexico.

The organization borrowed $230 million from current credit history strains, but it finished the 3rd quarter in May possibly with $439 million in dollars on its stability sheet and personal debt of $one.3 billion, warning there was sizeable doubt about its potential to endure. It shut all merchants on March 18 because of to the pandemic, furloughing ninety% of its personnel and withholding payments to landlords and distributors.

Dozens of suppliers, such as Brooks Brothers, JCPenney, and J.Crew have filed for personal bankruptcy as COVID-19 wrought havoc throughout the business, although some corporations have viewed their stock price increase because of to curiosity by day traders.

Ascena stated it entered into a restructuring support arrangement (RSA) with above 68% of its secured term loan providers that will decrease its personal debt by somewhere around $one billion and give elevated monetary versatility. It has also been given $150 million in new money.

“The RSA formalizes our lenders’ overwhelming support for a complete prepare to deleverage our stability sheet, appropriate-measurement our operations, and inject new money into the business,” interim government chair Carrie Teffner stated.

Michael Brochstein/SOPA Images/LightRocket through Getty Images

Ann Taylor, Ascena Retail Team, COVID-19, Lane Bryant, retail