Sycamore Bids $540 Million for Ann Taylor, Other Ascena Brands
Private equity firm moves to acquire Ann Taylor, Lane Bryant, Loft and Lou & Grey stores out of bankruptcy
Sycamore Partners has agreed to pay $540 million to buy Ann Taylor, Lane Bryant and other store brands from Ascena Retail Group Inc., the brands’ bankrupt parent company said Thursday.
The proposed deal would also deliver the Loft and Lou & Grey brands to Sycamore, subject to approval from the bankruptcy court where Ascena filed for chapter 11 protection in July.
Ascena said Sycamore “has committed to retaining a substantial portion of the retail stores and associates” affiliated with the brands it is buying. As of late August, Ascena operated 1,500 stores throughout the U.S.
The company has already sold its Justice and Catherines brands out of bankruptcy as online-only businesses.
Permanent closures of retail stores in the country hit a record in the first half of 2020 as pandemic lockdowns and shoppers’ fear of disease curbed foot traffic, pushing Ascena and dozens of other retailers into bankruptcy.
Some, such as Brooks Brothers Group Inc. and J.C. Penney Co. , found buyers. Others including Neiman Marcus Group Inc. and J.Crew Group Inc. handed themselves over to lenders. A few, like discount retailer Stage Stores Inc. and women’s brand New York & Co. , simply had to liquidate.
Before filing for chapter 11, Ascena tried several steps to soften the pandemic’s financial impact, including temporarily closing all its stores in March, reducing capital expenditures and assessing vendor-payment terms.
Ann Taylor, the company’s flagship chain, was once a retailing bellwether, selling many women their first suits as they entered the workforce. The retailer tried for years to manage the shift to casual dressing, launching the Loft brand in 1998, but never recaptured its former glory.
Last year, Ascena wound down its Dressbarn business, with more than 650 retail stores, to eliminate debt while selling Dressbarn’s e-commerce rights for about $5 million.
Following the bankruptcy filing, Ascena said it would shut some Ann Taylor, Loft, Lane Bryant and Lou & Grey locations with the aim of reducing its store count, exit Canada, Puerto Rico and Mexico, and focus more on e-commerce.
The retailer entered chapter 11 with support from the bulk of its senior lenders, which had agreed to a roughly $1 billion debt-for-equity swap that would hand them a controlling stake in the company.
The lenders have instead agreed to support the proposed sale to Sycamore and an agreed framework for divvying up the proceeds, according to court papers.
“Ann Taylor, Loft, Lane Bryant and Lou & Grey are well-known brands, each with passionate associates and loyal customers,” said Sycamore managing director Stefan Kaluzny, a veteran retail deal maker.