Dressbarn set to close 650 stores and to cut low performing brands to stabilize growth

In a move to stabilize the business, Dressbarn’s owner Ascena Retail Group (ASNA) is all set to close all of its roughly 650 stores. However, the timeline for the said closures is yet to be disclosed.

Over the past decade, Ascena’s portfolio is made up of apparel brands through acquisitions including plus-size retailer Lane Bryant and women's apparel brand Ann Taylor. But as stores and shopping have mostly shifted online, Ascena is rethinking its strategies for its physical stores to offset debt load.

Till July 2018, same-store sales were down 2%, and the company had a total debt of $1.33 billion to recover during the same period. Shares of the company, which have a market value of $214.4 million, are down 55% year-to-date.

To stem the losses, the company has decided to get rid of its less successful brands. The company’s CEO expresses concerns over its under-performing brands but has assured further exploration within its existing portfolio with a focus on brands that are believed to deliver and drive growth.

In the second quarter of 2019, Dressbarn generated $164 million in sales, a 7% drop from the same quarter a year ago.

For now, the company has assured that customers can continue to shop online or in stores, wherever a better deal is available. Earlier this month, Ascena completed the sale of its Maurice's brand to an affiliate of OpCapita for roughly $300 million.