Ascena Retail Group Inc. is offloading its Justice brand.
The bankrupt retailer — also parent to Ann Taylor and Loft — announced on Tuesday that it has entered into an asset purchase agreement with Premier Brands Justice LLC for the sale of the tween label’s intellectual property, e-commerce business and other assets. The move, according to Ascena, brings it closer to the completion of its restructuring process as it attempts to wade out of Chapter 11 proceedings.
Premier Brands Justice, which has been designated the stalking-horse bidder, will participate in the upcoming bankruptcy auction. The terms of the proposal were not disclosed.
“All of our restructuring activities are focused on maximizing value for all of our stakeholders and positioning the Ascena brands for long-term success,” CEO Gary Muto said in a statement. “Justice remains a brand beloved by tween girls, and we look forward to a competitive auction process.”
Formerly known as Limited Too, Justice — which became a subsidiary of Ascena in 2009 — offers fashion, footwear and accessories for girls aged 6 through 12. Its physical units were found across the United States and Canada, as well as in Asia, Mexico and the Middle East.
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However, three months ago, Ascena revealed that it would shut down about 600 of the more than 800 outposts in Justice’s brick-and-mortar fleet. (Liquidation sales for those stores lasted between 30 to 60 days.) According to its owner, Justice is expected to transition into a “primarily online platform.”
Ascena — which also operates the Lou & Grey and Lane Bryant banners — declared bankruptcy on July 23 amid the coronavirus pandemic. In mid-September, it sold its Catherines brand for $40.8 million to FullBeauty Brands Operations. Three weeks ago, Ascena announced that a judge had accepted its disclosure statement, which includes a summary of its operations as well as its plan of reorganization. With the approval, the company expects to exit Chapter 11 proceedings with $1 billion in debt relief.
“With a reduced store footprint and a more focused collection of go-forward brands, we believe that Ascena will emerge from Chapter 11 better able to strategically invest in our future and generate sustainable, profitable growth,” Muto added.
Correction: An earlier press release reported that the stalking-horse bidder was IHL Group. This story has been corrected to reflect the changes made in a revised press release, which indicated that Ascena has entered into an asset purchase agreement with Premier Brands Justice.