Struggling women’s specialty chain Dressbarn will shut its doors for good.
While its stores and e-commerce site remain open, the company said it will wind operations down, and that its 650 stores will eventually be shuttered. The specialty chain, which has been in operation for more than 50 years, has hired A&G Realty Partners to help in the related real estate matters.
Dressbarn, owned by Ascena Retail Group, said it hadn’t yet notified associates about specific store closures, but it did emphasize that Dressbarn will continue to pay its vendors and suppliers in full during the wind-down process.
Steven Taylor, chief financial officer of Dressbarn, said, “This decision was difficult, but necessary, as the Dressbarn chain has not been operating at an acceptable level of profitability in today’s retail environment.”
The decision wasn’t entirely unexpected. In March, Ascena posted disappointing second-quarter earnings results, and said it was exploring opportunities within it portfolio in order to focus on its better-performing brands. One division that didn’t do well was its value fashion group, which consisted, at the time, of its Maurices and Dressbarn nameplates. The group saw sales slip 4.1 percent to $421.4 million, and comps at 0 percent.
A few weeks later, Ascena disclosed that it was selling a majority stake in Maurices to an affiliate of private equity firm OpCapita in a deal valued at $300 million. Ascena retains a minority interest, and said the two would enter into a managed services agreement that could serve as third-party platform for others, and be a source of revenue for Ascena.
There was a question of what other deals could Ascena do, and Dressbarn was one of the nameplates that had been pitched to potential buyers. The problem, however, was that few would likely buy a brand or retailer that wasn’t doing well, and, even if someone were interested, it may not have been at a price Ascena was willing to accept.