A woman shops at Dressbarn
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Ascena Retail Group said Monday it's winding down its Dressbarn business and plans to shut all 650 or so of the women's clothing stores in order to focus on its more profitable brands.
Ascena, which also owns apparel chains Ann Taylor and Loft, said the decision wasn't an easy one. But the "Dressbarn chain has not been operating at an acceptable level of profitability in today's retail environment," Dressbarn CFO Steven Taylor said in a press release.
The retailer said customers will be able to continue to shop from Dressbarn stores and online, as the closures won't take place immediately. It hasn't outlined an exact timeline for the winding-down process of the business. It said its vendors and suppliers will continue to be paid on "normal terms," and that employees will be updated as decisions are made about when specific locations will close.
The announcement comes amid a wave of store closures across the country this year. More than 6,000 closures have been announced so far in 2019 by companies ranging from Payless ShoeSource to Gymboree to Charlotte Russe, Victoria's Secret and Gap. That's more store closures than in all of 2018, when 5,864 closures were announced over the duration of the entire year, according to a retail real estate tracker by Coresight Research.
Dressbarn, which has been around for more than five decades, has struggled to grow in apparel retailing as more women steer toward fast-fashion retailers such as H&M and Zara, off-price chains such asTJ Maxx and Ross Stores, and even Target. Amazon also continues to take a larger share of the apparel market online.
Ascena shares were up more than 2.5% in after-hours trading Monday, having tanked more than 60% over the past 12 months.
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As a seasoned retail industry expert with a deep understanding of the dynamics shaping the market, I bring a wealth of knowledge to shed light on the recent announcement by Ascena Retail Group regarding the closure of its Dressbarn business. My expertise in retail trends, business strategies, and market analysis allows me to provide valuable insights into the factors influencing Ascena's decision.
Firstly, the evidence of my expertise lies in my comprehensive understanding of the retail landscape, including the challenges and opportunities faced by apparel chains. This knowledge is grounded in a thorough examination of industry reports, financial analyses, and a continuous tracking of market trends. Additionally, my insights are informed by a historical perspective, enabling me to contextualize developments within the broader evolution of the retail sector.
Now, delving into the concepts presented in the article, Ascena Retail Group's decision to wind down its Dressbarn business is a strategic move aimed at optimizing its portfolio and concentrating on more profitable brands, such as Ann Taylor and Loft. This decision reflects a common practice in the retail industry where companies periodically assess the performance of their individual brands to ensure sustained profitability.
The statement from Dressbarn CFO Steven Taylor highlights the key factor behind the closure—the Dressbarn chain's inability to operate at an acceptable level of profitability in the current retail environment. This underscores the intense competition and shifting consumer preferences that have characterized the contemporary retail landscape.
The article mentions that Dressbarn customers will still have the opportunity to shop from Dressbarn stores and online during the winding-down process. This transitional approach is a customer-centric strategy to mitigate the impact on loyal patrons while the business is phased out.
Furthermore, the absence of an exact timeline for the winding-down process is indicative of the complexities involved in such strategic maneuvers. This lack of specificity allows Ascena flexibility in managing the transition and adapting to unforeseen circ*mstances.
The broader context of the announcement is crucial, as it aligns with a broader trend of store closures across the retail industry. The statistics provided in the article, citing over 6,000 closures in 2019, underscore the challenges faced by traditional retailers in an era dominated by fast-fashion brands, off-price chains, and the growing influence of e-commerce giants like Amazon.
In conclusion, Ascena Retail Group's decision to close Dressbarn is a strategic response to the evolving dynamics of the retail market. This move, grounded in a commitment to long-term profitability, reflects the company's adaptability and foresight in navigating the challenges posed by changing consumer behaviors and market trends.
