Sycamore Partners LLC has reportedly made a preliminary bid to snap up the assets of bankrupt Ascena Retail Group Inc.
The private equity firm, according to people familiar with the matter who spoke with Bloomberg, is offering to buy the company’s Ann Taylor as well as Loft and Lane Bryant brands. The offer is said to be non-binding, with talks expected to continue before a final bid heads to court.
The publication added that the sources asked not to be named because the bid isn’t public. Bloomberg first reported that Sycamore was interested in the labels back in July.
Sycamore declined to comment, while Ascena did not immediately respond to FN’s request for comment.
The report comes just days after Ascena announced that a judge in the United States Bankruptcy Court for the Eastern District of Virginia accepted its disclosure statement, which includes a summary of its operations as well as its plan of reorganization.
With the approval, the retail group expects to exit Chapter 11 proceedings with $1 billion in debt relief. Loans will be converted into equity in the company, which will be turned over to lenders. It also got authorization for debtor-in-possession financing composed of a $400 million asset-based lending facility and a roughly $312 million term loan, which includes $150 million in new money.
According to the company, the plan received the support of 95% of its secured term lenders. A hearing to consider its confirmation is scheduled for Oct. 23.
Ascena is also parent to the Loft, Lou & Grey and Justice brands. Last week, it announced that it was selling its Catherines brand for more than double what it was initially offered. In a court filing, the company said that it was proffered a winning bid of $40.8 million from FullBeauty Brands Operations LLC for the plus-size chain. The company is also currently in the “final stages” of store closures across its brands, which is expected to reduce its overall footprint to approximately 1,300 locations, from about 2,800 outposts prior to the coronavirus pandemic.