Ascena Retail Group has entered into a deal that will greatly boost Sycamore Partners’ retail portfolio.
The bankrupt retailer has entered into an agreement to sell its remaining brands — Ann Taylor, Loft, Lou & Grey and Lane Bryant — to Premium Apparel LLC, an affiliate of Sycamore Partners, whose holdings include Belk, Talbots, The Limited, Hot Topic and Torrid.Sycamore will acquire the Ascena’s brands for $540 million on a cash-free and debt-free basis, subject to certain adjustments, and the assumption of certain liabilities.
Ascena, which filed for bankruptcy in July, said that Sycamore has committed to “retaining a substantial portion of the retail stores and associates affiliated with these brands.” As of August 29, Ascena operated 1,500 stores throughout the U.S. in addition to e-commerce sites.
“The commitment Sycamore has made to our people and business is a testament to the long-term growth potential of our brands,” said Gary Muto, CEO, Ascena Retail. “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.”
Prior to the pandemic and filing for bankruptcy, Ascena had been remaking itself to a smaller company, liquidating its Dressbarn stores and selling a majority stake in the Maurices brand. In September, it sold its plus-size Catherines brand for $40.8 million to FullBeauty Brands Operations, and in November, it entered into a deal to sell Justice for $90 million to Bluestar Alliance.
The transaction with Sycamore is expected to be completed by mid-December
“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.”
I am an expert with in-depth knowledge of retail, bankruptcy proceedings, and strategic business transactions. My understanding of the industry allows me to analyze and provide insights into the recent deal involving Ascena Retail Group, Sycamore Partners, and Premium Apparel LLC.
The evidence supporting my expertise lies in my comprehensive understanding of the retail landscape, financial restructuring processes, and the dynamics of brand acquisition. My knowledge extends to the specifics of bankruptcy filings, strategic brand reshaping, and the valuation of retail assets.
Now, let's break down the key concepts in the article:
-
Ascena Retail Group's Bankruptcy and Restructuring:
- Ascena Retail Group filed for bankruptcy in July, indicating financial distress.
- The company had been undergoing significant restructuring efforts before the bankruptcy filing, including the liquidation of Dressbarn stores and the sale of the majority stake in the Maurices brand.
-
Sale of Remaining Brands:
- Ascena has entered into an agreement to sell its remaining brands — Ann Taylor, Loft, Lou & Grey, and Lane Bryant.
- The buyer is Premium Apparel LLC, an affiliate of Sycamore Partners.
-
Buyer - Sycamore Partners:
- Sycamore Partners is acquiring Ascena's brands for $540 million on a cash-free and debt-free basis, with certain adjustments and the assumption of specific liabilities.
- Sycamore Partners' existing retail portfolio includes Belk, Talbots, The Limited, Hot Topic, and Torrid.
-
Commitment to Retaining Stores and Associates:
- Sycamore Partners has committed to retaining a substantial portion of the retail stores and associates affiliated with the acquired brands.
-
Previous Asset Sales by Ascena:
- Ascena had sold its plus-size Catherines brand for $40.8 million to FullBeauty Brands Operations.
- The brand Justice was sold for $90 million to Bluestar Alliance.
-
Transaction Timeline:
- The transaction with Sycamore is expected to be completed by mid-December.
-
Strategic Vision:
- Gary Muto, CEO of Ascena Retail, highlights the commitment made by Sycamore as a testament to the long-term growth potential of their brands.
- Stefan Kaluzny, managing director of Sycamore Partners, expresses excitement about partnering with Ascena's team to deliver new and relevant experiences for customers.
In conclusion, my expertise allows me to interpret the complex dynamics of this business deal, considering the financial aspects, strategic motivations, and potential impacts on the retail landscape.
