Ascena Retail Group, the organization that owns Ann Taylor and Lane Bryant, has filed for Chapter eleven personal bankruptcy safety and programs to shut a significant number of merchants, the organization mentioned.
The organization has posted running losses of $2.four billion with only just one yr of optimistic running gain because the summer time of 2014 but mentioned the COVID-19 disaster scuttled turnaround tries.
Ascena, which was when the most significant apparel retailer for ladies in the country, has been closing merchants for many years. It mentioned it will completely shut some Ann Taylor, Loft, Lane Bryant, and Lou & Gray merchants and a “significant” number of Justice merchants. It also mentioned it would completely shut all merchants throughout all of its models in Canada, Puerto Rico, and Mexico.
The organization borrowed $230 million from present credit score lines, but it finished the third quarter in May well with $439 million in cash on its harmony sheet and debt of $1.3 billion, warning there was substantial question about its potential to survive. It shut all merchants on March eighteen due to the pandemic, furloughing 90% of its personnel and withholding payments to landlords and suppliers.
Dozens of vendors, together with Brooks Brothers, JCPenney, and J.Crew have filed for personal bankruptcy as COVID-19 wrought havoc throughout the industry, even though some corporations have viewed their stock price increase due to desire by day traders.
Ascena mentioned it entered into a restructuring guidance settlement (RSA) with around 68% of its secured time period lenders that will lower its debt by somewhere around $1 billion and supply enhanced monetary overall flexibility. It has also acquired $one hundred fifty million in new money.
“The RSA formalizes our lenders’ too much to handle guidance for a complete prepare to deleverage our harmony sheet, suitable-sizing our operations, and inject new money into the business,” interim government chair Carrie Teffner mentioned.
Michael Brochstein/SOPA Photos/LightRocket via Getty Photos