The Mahwah, New Jersey-based company, which also operates the Lane Bryant and Catherines store brands, filed for voluntary Chapter 11 bankruptcy on Thursday, with a restructuring agreement supported by more than 68% of its secured term lenders.
The company said it expects to reduce debt by about $1 billion in its pre-arranged restructuring, giving it more financial flexibility to focus on returning to profitability. It has $150 million in funding from existing lenders, which combined with its current cash flow from ongoing operations will fund it through the bankruptcy process.
Ann Taylor, Loft, Lane Bryant and other chains will continue to operate through the restructuring with about 95% of stores open. However, the company will close a “significant” number of Justice stores and certain Ann Taylor, LOFT, Lane Bryant and Lou & Grey stores, including all stores across brands in Canada, Puerto Rico and Mexico.
Ascena follows in the footsteps of other retailers including J.Crew, J.C. Penney (JCP) - Get J. C. Penney Company, Inc. Report, Nordstrom, and most recently Brooks Brothers who have formally filed for creditor protection amid the coronavirus pandemic and economic collapse.
Latest Videos From TheStreet and Jim Cramer:
- Jobless Claims Are Heading in the Wrong Direction
- Coronavirus Update: Chipotle's Earnings Show Digital Sales, Delivery Up
- Amazon Prime Day Pushed Back, New Date Not Yet Released
- Twitter Posts Second-Quarter Loss, Though Sees It as Temporary
- What Is Trump’s Economic Plan and How Will it Impact Stocks?
- Walmart Is Paying $428 Million In Bonuses to Its Frontline Workers