Ascena Retail Group Struggles in Q1, Considers Transformations
Ascena Retail Group, the parent company of brands like Ann Taylor, Loft, and Lane Bryant, has reported a challenging quarter. CEO David Jaffe acknowledged missteps at some of its key brands, while the company's president and CEO, Gary Muto, expressed caution for the upcoming season. The quarter saw a net loss widening to $71.5 million and net sales falling to $1.69 billion.
The company's total comparable sales rose 2%, but the performance varied across brands. Ann Taylor and Loft saw comps rise 10% each, while Maurices rose 1%. However, Dressbarn fell 1%, Lane Bryant fell 8%, Catherines fell 4%, and Justice rose 2%. The plus-size segment, once a stronghold for Ascena, is now facing stiff competition from direct-to-consumer brands and mainstream retailers offering inclusive sizing.
The quarter also saw Ascena shuttering a net 110 locations, ending with 4,486 stores. The company's gross margin fell to 52.2% of sales from 54% in the year-ago period. Executives are now considering transformations for value banners to boost profitability and utilise cash more effectively.
Ascena's second quarter results reflect a challenging retail environment. While some brands showed improvement, others struggled. The company is now exploring strategic options to redesign brand value and improve profit access. As the retail landscape continues to evolve, Ascena must adapt to remain competitive.
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