Acquiring

Ann Taylor Chain To Be Sold For $2.2B

Acsena, which runs Lane Bryant and Dressbarn women’s clothing stores, is to buy Ann Inc., a large retailer for women’s everyday fashion in the U.S., known mainly for its two brands – Ann Taylor and LOFT.

Ann Inc. is set to join Ascena for $2.15 billion. Under the deal, Ascena will pay cash and stock worth $47 a share at Friday’s closing price, a 21 percent premium. While shares in Ascena were down 2.1 percent at $13.91, Ann’s stock jumped 19.2 percent to $46.12, reports Reuters.

Ascena currently owns about 3,900 stores under a number of names in the U.S. and Canada. In 2014, its sales were worth more than $7.3 billion. After this deal it will operate nearly 5,000 stores and will become one of the largest women’s apparel retailers in the United States.

Ascena’s ambition is to boost profit by more than 20 percent a year after the deal closes, which should take place during the second half of 2015, Reuters reported.

Ann Inc. has suffered from heavy discounting and tough competition with sales falling during the past year. In March 2014, Ann Inc. President and Chief Executive Officer Kay Krill stated, “Retailing has undergone a sea change over the last few years, driven by the continued rapid shift of consumers’ purchasing behavior and the growth of omni-channel shopping. Ann Inc. has been at the forefront of this evolution, investing in the infrastructure and system enhancements that led to the launch of our successful omni-channel platform in 2012. Today, we are taking the next critical step, by realigning our organization to support an integrated stores/eCommerce structure to accelerate our strategic growth agenda and overall financial performance in 2014 and beyond.”

In fact, Ascena expects to adopt Ann’s successful eCommerce strategy. Some 20 percent of Ann’s sales come from eCommerce, higher than Ascena’s, according to The Wall Street Journal.

David Jaffe, Ascena’s President and Chief Executive Officer, commented: “With the addition of the Ann Taylor and LOFT brands, Ascena will become one of North America’s largest and most diversified specialty apparel retailers, with a tremendous set of opportunities to continue to expand its leadership position in the women’s apparel market.”

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