Ann Taylor And Lane Bryant Parent Ascena Files Chapter 11 Bankruptcy

Ascena Retail Group, Inc. has filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Eastern District of Virginia. The retailer and “certain of its subsidiaries” have come to a restructuring support agreement (RSA) with more than 68 percent of secured term lenders, according to a Thursday (July 23) statement.

Ascena Interim Executive Chair Carrie Teffner said in the statement, “The RSA formalizes our lenders’ overwhelming support for a comprehensive plan to deleverage our balance sheet, right-size our operations and inject new capital into the business.”

The company has also secured commitments for $150 million in a “new money term loan” from current lenders. The company said the loan, along with cash flow brought in from its continuing operations and the cash it holds, is forecasted to be enough to satisfy its “operational and restructuring” requirements after court approval.

Ascena is currently running with roughly 95 percent of its store base opened again, helping shoppers via retail locations as well as online stores. However, the retailer plans to shutter many Justice brand locations and a “select number” of LOFT, Ann Taylor, Lou & Grey and Lane Bryant locations.

The ultimate number of retail locations to be shuttered “will be determined based on the ability of Ascena and its landlords to reach [an] agreement on sustainable lease structures,” according to the statement.

Ascena Chief Executive Officer Gary Muto said in the statement, “We look forward to our continued partnerships with our valued vendors, landlords and other stakeholders as we emerge from Chapter 11, and this pandemic, as a stronger company.”

In June, news surfaced that Ascena was reportedly in discussions with lenders regarding a potential bankruptcy filing, with COVID-19 putting the business into chaos. At the time, it was noted that a Chapter 11 filing would allow the company to keep some of its brands in operation as it looks to sell other labels.