Ann Taylor parent files for Chapter 11 bankruptcy

NEW YORK — Ascena Retail Group said it plans to close a “significant number” of stores after filing for Chapter 11 bankruptcy protection Thursday following the economic effects of the COVID-19 pandemic.

The New Jersey based retailer said that it would close all of its Catherines stores, a “significant number” of Justice stores and a select number of Ann Taylor, Loft, Lane Bryant and Lou & Grey stores in the bankruptcy plan.

As many as 50,000 jobs could be affected by the bankruptcy, according to Bloomberg which cited an annual report. The restructuring is expected to reduce debt by about $1 billion of the company’s cumulative $12.5 billion in debts.

“With the cash generated from our ongoing operations and the new money financing commitments we received from our lenders, we expect to have sufficient liquidity to meet our operational obligations during the court-supervised process,. We expect to move through this process on an expedited time frame,” Carrie Teffner, Ascena’s interim executive chair, said in a statement obtained by Bloomberg.

Late last year, Ascena shut down all 650 of its Dress Barn stores which employed about 6,800 people.

This spring, Ascena furloughed 90% of its workers when it temporarily shuttered its stores while also canceling merchandising orders where possible to preserve cash. It started to reopen its outlets in mid-May and now has about 95% of its stores open.

Ascena Retail Group, which has nearly 3,000 stores mostly at malls, has been dragged down by debt and weak sales for years.

Roughly 40 retailers, including big and small companies, have filed for Chapter 11 bankruptcy so far this year, exceeding the number of retail bankruptcies for the entirety of 2019. That’s according to S&P Global Market Intelligence. About 20 of them have sought bankruptcy protection since the pandemic started, and analysts expect more to come.

The Associated Press contributed to this story.

Cox Media Group