Ascena Retail Group Files for Bankruptcy
Ascena Retail Group, the parent company of women’s apparel brands Ann Taylor, Lane Bryant and Catherines, filed for bankruptcy yesterday and said it will close at least 877, or nearly a third, of its 2,800 stores after years of declining sales and growing debt. The company, founded as Dressbarn in 1962, is one of the nation’s largest sellers of women’s clothing. Ascena is closing all 264 Catherines stores, selling the plus-size clothing brand and its website to an Australian company, City Chic Collective. It also will shutter more than 600 Justice stores, which cater to girls and pre-teens, and some Ann Taylor, Loft, Lane Bryant, and Lou & Grey shops.
Total Retail's Take: One of the most visible signs of the struggles that retailers have had to endure in the first half of 2020, and particularly since the coronavirus reached a pandemic level in mid-March, is the number of organizations that have filed for bankruptcy protection. Ascena joins other retailers such as J.C. Penney, J.Crew, Neiman Marcus, Brooks Brothers, and many others in bankruptcy court. The question is will any of these businesses or, more broadly, traditional brick-and-mortar retail, return?
The answer is likely somewhere in the middle. Yes, some of these businesses will emerge from bankruptcy, albeit with shrunken physical footprints. However, operating as "normal" is likely done forever. In order to survive, traditional brick-and-mortar retailers need to evolve to better serve today's consumers, who increasingly opt for the convenience and, at least right now, safety of shopping online. And that means more than just having an optimized website. It means a supply chain that can get inventory to stores and customers' doorsteps quickly and efficiently; it means carrying unique merchandise that can't be easily found elsewhere; it means providing a customer experience that leaves customers wanting to come back to purchase again; among a litany of other operational changes. It's not going to be easy, but that's what it's going to take to succeed.
