Ascena Retail Group, the conglomerate behind women's apparel brands Ann Taylor, Lane Bryant and Catherines, filed for bankruptcy Thursday and said it would close at least 877 of its 2,800 stores after years of declining sales and ballooning debt.
The company, founded as Dressbarn in 1962, is one of the country's largest sellers of women's clothing. But in recent years, its lineups of no-frills workwear and other basics have lost ground to a growing crop of competitors, including low-price retailers such as TJ Maxx and newcomers such as Everlane.
Ascena is closing all 264 Catherines stores, and selling the plus-size clothing brand and its website to an Australian company, City Chic Collective. It will also shutter more than 600 locations from its Justice brand for girls and preteens, as well as some Ann Taylor, Loft, Lane Bryant and Lou & Grey shops.
The retailer, which is based in Mahwah, N.J., also is doing away with all locations in Canada, Puerto Rico and Mexico as it tries to whittle down about $1 billion in debt.
The planned closures represent another blow to the country's shopping malls, which already were struggling to attract shoppers and tenants long before the pandemic ushered in a new wave of bankruptcies and closures.
The Chapter 11 filing comes a few weeks after the company said it would give top executives as much as $5.5 million in retention pay and performance bonuses.
It's the latest retail casualty of the pandemic, following Brooks Brothers, J.C. Penney, J. Crew and Neiman Marcus and several others into bankruptcy court. Ascena temporarily shuttered all of its stores and furloughed more than 90% of its employees in mid-March as stay-home orders took effect. To stay afloat, it borrowed $230 million, canceled merchandise orders and stopped paying rent.
In its bankruptcy filing, the company said it owes between $10 billion and $50 billion to more than 100,000 creditors. Its largest debts are related to rent: Ascena owes $31.7 million to mall operator Simon Property Group, $16.6 million to Brookfield Properties, $8.8 million to Boston Properties and $7.2 million to Tanger Properties.
The company began gradually reopening stores in May, but it says customers have been slow to return. Quarterly revenue between March and May fell 45% from a year earlier.
"COVID-19 has significantly disrupted our business," Carrie Teffner, Ascena's interim executive chair, said in a May statement. "Despite aggressive actions to preserve liquidity, the pandemic has significantly reduced our earnings and cash flow, resulting in increased levels of debt and deferred liabilities."
The company had $5.5 billion in sales in fiscal year 2019, compared with nearly $7 billion in fiscal 2016.
Ascena permanently closed all 650 Dressbarn stores in December.
Shares of Ascena's stock fell 24% in premarket trading after the news, and are down nearly 90% this year.