As it seeks to exit bankruptcy, Mahwah, New Jersey-based Ascena Retail Group, Inc. has announced plans to sell its Ann Taylor, Loft, Lane Bryant, and Lou & Grey brands. According to a release published by the company on Thursday, Ascena has entered into an asset purchase agreement with Premium Apparel LLC, an affiliate of Sycamore Partners. The deal will see Premium Apparel acquire the aforementioned businesses for $540 million.
As part of the agreement, Premium Apparel has also committed to retaining a “substantial portion” of the acquired brands’ retail stores and associates.
“The commitment Sycamore has made to our people and business is a testament to the long-term growth potential of our brands,” commented Ascena CEO Gary Muto in the company’s release.
“At Ascena, we have made significant progress in our financial restructuring process. We have worked diligently to maximize the value of all of our brands, and today’s agreement with Sycamore is the latest example,” he added.
“Ann Taylor, Loft, Lane Bryant, and Lou & Grey are well-known brands, each with passionate associates and loyal customers,” said Stefan Kaluzny, managing director of Sycamore Partners. “These brands have significant potential, and we are excited about the opportunity to partner with Ascena’s talented team to continue delivering new and relevant experiences for customers.”
Ascena filed for Chapter 11 bankruptcy due to the economic pressures of the Covid-19 pandemic in July and received court approval for its reorganization plan in September.
As it progresses through the bankruptcy process, the company has already sold the intellectual property assets and e-commerce business of its Catherines’ brand to FullBeauty Brands Operations, LLC, while the intellectual property of its youth-focused Justice banner has been acquired by Bluestar Alliance.
Prior to the coronavirus crisis, the retail group had been struggling for some time, due to increased competition from online retailers and an aggressive acquisition strategy which led to the company accumulating debt.
The sale of Ann Taylor, Loft, Lane Bryant, and Lou & Grey to Premium Apparel is expected to be completed by mid-December.