Retail

Lane Bryant and Ann Taylor's Parent Ascena Reportedly Considers Bankruptcy

Ascena Retail Group Considers Bankruptcy Filing

With the pandemic putting its business into a state of disorder, Lane Bryant and Ann Taylor owner Ascena Retail Group is reportedly in talks with lenders about a possible bankruptcy filing. A Chapter 11 filing would let the firm maintain the operation of some of its brands as it looks to sell other names and could come as early as July, Bloomberg reported, citing unnamed sources.

Most of the roughly 2,800 retail locations of Ascena are still shuttered. All of its locations closed in March because of the outbreak, but the merchant started to open stores again in May as states took away restrictions. However, the company noted in a recent filing that foot traffic is significantly lower than usual at the locations that were brought back to life.

The protection of bankruptcy would let the firm steer clear of a permanent shutdown, shutter stores that are not strong to keep costs to a minimum and reduce its borrowings. However, the situation is in flux and plans are not set in stone, as the company is still reportedly looking for alternative financing options. The result could rely on conditions in the market and the forecast for when stores could begin to open again.

Ascena is mulling selling three brands, with the inclusion of Catherine’s, and maintaining Loft as well as Ann Taylor as part of the firm as it comes out of bankruptcy per the sources. Lenders of the firm are reportedly beginning private discussions on an arrangement that would have their holdings traded for a majority share in the new reorganized firm.

In separate news, Tuesday Morning Corporation said it filed for Chapter 11 bankruptcy to seek “financial and operational reorganization” per news in late May. The merchant said it filed voluntary petitions in United States Bankruptcy Court for the Northern District of Texas – Dallas Division to seek the reorganization. The retailer foresees closing approximately 230 of 687 stores.

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