The operator of Ann Taylor and Lane Bryant filed for Chapter 11 bankruptcy on Thursday, the latest retailer to do so during the pandemic. | AP
Ascena joins a growing list of retailers that have filed for Chapter 11 in recent weeks, including Brooks Brothers, Neiman Marcus, J.C. Penney, J.Crew, and Stage Stores. These retailers were already struggling with weak sales but the forced closure of non-essential stores in March to reduce the spread of the coronavirus put them further in peril.
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. Prior to the pandemic, Ascena’s stores accounted for about 60% of total revenues. Consequently, the pandemic “has significantly reduced our earnings and cash flow,” according to a May statement from Carrie Teffner, interim executive chair of Ascena. Total revenues in the third quarter of fiscal 2020, which covered the February through April period, were down 45% compared with the same period a year ago.
At the time, Ascena said it would continue to evaluate all available options to preserve its ongoing operations.
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