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In the latest example of how the world of brick-and-mortar retail is being overwhelmed by the pandemic, specialty apparel conglomerate Ascena Retail Group Inc — corporate parent of Ann Taylor, Lane Bryant and other chains — filed for Chapter 11 bankruptcy protection. The company said its restructuring plan will allow it to reduce its debt by $1 billion. It also will close an unspecified number of stores across all of its major banners, including shuttering all of its Catherines plus-size apparel locations.
Ascena may not have the cultural primacy of some of the other prominent names in the industry that have recently filed for bankruptcy. It doesn’t have the long, storied heritage of Brooks Brothers, the preppy clothier that opened its first shop more than 200 years ago. It didn’t define a fashion moment like J Crew
did a decade ago when Michelle Obama was sporting its embellished cardigans. It’s not a household name like JC Penney.
But make no mistake: Ascena’s bankruptcy is the scariest yet for the industry in the Covid-19 era, because the company’s collapse has the potential to create more devastating ripple effects than were caused by almost any of the other retail washouts that preceded it.
Ascena had nearly 2,800 stores as of February, a staggeringly large portfolio that includes Loft and kids’ shop Justice. That makes it a highly important tenant for many mall operators. The company accounted for 4.7% of annualised base rent at Tanger Factory Outlet Centers Inc, according to that operator’s latest quarterly filing, a share that makes Ascena its second-largest tenant behind only Gap Inc.
For Simon Property Group Inc, only Gap and Victoria’s Secret parent L Brands Inc account for a greater share of annual base rent than Ascena. It is in the top 10 for Brookfield Property Partners and Acadia Realty Trust.
Ascena has not detailed exactly how many stores it will close. It committed to closing all of its Catherines outposts, which numbered almost 300 as of February. It said it will shutter a “significant†portion of its more than 800 Justice stores, and a “select†number of its Ann Taylor, Loft, Lane Bryant and Lou & Grey locations.
—Bloomberg