Ascena Retail Group Inc. is selling its brands as it seeks to exit bankruptcy amid the coronavirus pandemic.
The company announced that it has entered into an asset purchase agreement with Premium Apparel LLC — an affiliate of private equity firm Sycamore Partners — to sell its Ann Taylor, Loft, Lane Bryant and Lou & Grey banners.
Under the deal, Premium Apparel will acquire the brand assets for $540 million on a cash-free and debt-free basis, subject to certain adjustments, and the assumption of certain liabilities. It also intends to retain a “substantial portion” of Ascena’s brick-and-mortar fleet as well as its employees.
“The commitment Sycamore has made to our people and business is a testament to the long-term growth potential of our brands,” the retail group’s CEO, Gary Muto, said in a statement on Thursday. “At Ascena, we have made significant progress in our financial restructuring process. We have worked diligently to maximize the value of all of our brands, and today’s agreement with Sycamore is the latest example.”
In addition, Sycamore managing director Stefan Kaluzny said, “Ann Taylor, Loft, Lane Bryant and Lou & Grey are well-known brands, each with passionate associates and loyal customers. These brands have significant potential, and we are excited about the opportunity to partner with Ascena’s talented team to continue delivering new and relevant experiences for customers.”
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Speculation over Sycamore’s purchase of Ascena’s brand first swirled in July and again in late September. It was also rumored that Authentic Brands Group was considering a buyout of the company, alongside frequent buying partners Simon Property Group and Brookfield Property Partners. (Over the past year, ABG has purchased luxury department store Barneys New York, fast-fashion giant Forever 21, denim purveyor Lucky Brand and menswear clothier Brooks Brothers.)
The Sycamore-Ascena transaction is expected to be completed by mid-December. As previously announced, FullBeauty Brands Operations LLC has acquired Catherines‘ intellectual property assets and e-commerce business, while Justice Brand Holdings LLC, an entity formed by Bluestar Alliance LLC, snapped up the intellectual property of Justice.
“We are looking forward to the holiday season and beyond in Ann Taylor, Loft, Lane Bryant and Lou & Grey stores and online,” Muto added. “As our customers’ needs continue to evolve, our teams remain focused on delivering great fashion and memorable experiences, however our customer chooses to shop.”