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Bloomberg
Ascena Retail Group Inc, the owner of mall brands that occupy almost 3,000 stores in the US, is preparing to file for bankruptcy and shutter at least 1,200 of those locations, according to people with knowledge of the plan.
The company, which owns brands such as Ann Taylor and Lane Bryant, could enter Chapter 11 as soon as this week
with a creditor agreement in place that eliminates around $700 million of its $1.1 billion debt load. Lenders including Eaton Vance Corp would assume control of the company, said the people, who asked not to be identified discussing a private matter.
Ascena has experienced years of financial losses amid a boom in online shopping and slowdown in foot traffic at malls. The bankruptcy filing would allow the company to keep some of its brands operating while it shutters or sells others, the people said. Catherines and Justice are among the chains it’s considering to close or sell, they said. The plan is not final and certain details could change.
Mahwah, New Jersey-based Ascena didn’t provide a comment. The company is getting advice from restructuring lawyers at Kirkland & Ellis and investment bank Guggenheim Securities. A representative for Guggenheim declined to comment, while spokespeople for Kirkland and Eaton Vance didn’t immediately return messages seeking comment.
Ascena shut its shops in mid-March as the coronavirus outbreak spread, and began to re-open locations in May as state authorities lifted restrictions.