Ascena Retail Team, the company that owns Ann Taylor and Lane Bryant, has filed for Chapter 11 bankruptcy safety and plans to near a considerable quantity of merchants, the company stated.
The company has posted operating losses of $2.4 billion with only one yr of favourable operating gain because the summer time of 2014 but stated the COVID-19 disaster scuttled turnaround attempts.
Ascena, which was the moment the greatest apparel retailer for females in the place, has been closing merchants for years. It stated it will permanently near some Ann Taylor, Loft, Lane Bryant, and Lou & Gray merchants and a “significant” quantity of Justice merchants. It also stated it would permanently near all merchants throughout all of its brand names in Canada, Puerto Rico, and Mexico.
The company borrowed $230 million from existing credit history strains, but it ended the third quarter in May with $439 million in hard cash on its harmony sheet and debt of $1.3 billion, warning there was significant question about its skill to survive. It closed all merchants on March 18 thanks to the pandemic, furloughing ninety% of its staff members and withholding payments to landlords and distributors.
Dozens of merchants, like Brooks Brothers, JCPenney, and J.Crew have filed for bankruptcy as COVID-19 wrought havoc throughout the field, although some businesses have found their inventory value strengthen thanks to fascination by working day traders.
Ascena stated it entered into a restructuring aid agreement (RSA) with about sixty eight% of its secured phrase creditors that will lessen its debt by somewhere around $1 billion and give increased monetary versatility. It has also gained $150 million in new money.
“The RSA formalizes our lenders’ frustrating aid for a comprehensive system to deleverage our harmony sheet, proper-measurement our functions, and inject new money into the enterprise,” interim executive chair Carrie Teffner stated.
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