Dressbarn confirms 53 stores to close in August as wind down nears

Ascena shares have been down by more than 75% this year and are trading at below $1

Ascena Retail Group, an American retailer for women’s clothing, recently announced that it is going to shut down 53 locations of Dressbarn by the end of August.

Rumors earlier suggest that the business will be forced to file for bankruptcy in order to break the leases. Ascena announced in May that it was planning to wind down Dressbarn and shut around 650 stores of the women’s clothing shop to focus on its profitable brands such as Loft and Taylor.

According to reliable sources, if the landlords did not agree to relieve the clothing brand of any lease obligations, the clothing store for women as a standalone unit wound end up filing for bankruptcy as it has already begun shutting down hundreds of stores in shopping centers and malls all over the country. The announcement could have been worse as retail property owners have also been affected by numerous store closures this year.

CFO of Dressbarn, Steven Taylor stated that the company has received overwhelming support from landlords for their plans that lets them implement their wind down in a way that provides the best recovery for the landlords.

The company has started to work with Gordan Brothers Retail Partners to help with the closing of stores and with Hilco Streambank to seek buyers for the intellectual property of Dressbarn. The company has been receiving fresh inventory but has encouraged customers for early shopping in order to get the best selection and avail outstanding gift cards.

Sources familiar with the matter said that Malfitano Partners has been managing the company’s overall wind down. Dressbarn has been around for over five decades but has been struggling for growth in apparel retailing due to customer shift towards fast-fashion retailers like Zara and H&M, Target and off-price chains like Ross Stores and T.J. Maxx while Amazon still takes bigger share of the online apparel market.

Source Credit- https://www.cnbc.com/2019/07/18/dressbarn-to-close-53-more-stores-in-august-wind-down-of-business-on-target.html