Apparel retail chain Dressbarn will close its 650 stores and shut down operations, the company announced Tuesday. The company has not shared a timeline for when the closures will occur. All Dressbarn stores and its ecommerce site, Dressbarn.com, are open and conducting business as usual for the time being.
Dressbarn did not specify if Dressbarn.com will shut down along with its stores. The company did not respond to multiple requests for clarification.
Dressbarn is owned by Ascena Retail Group, No. 80 in the 2019 Internet Retailer Top 1000, the parent company of other womenswear chains such as Ann Taylor, Loft and Lane Bryant.
“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,” says Steven Taylor, chief financial officer .
Dressbarn had a 4% comparable sales decline in its fiscal 2018 ended Aug. 4. In Ascena’s annual report, the company pointed to Dressbarn as a reason for a decline in gross margin rate. “Value fashion gross margin rate performance declined approximately 150 basis points, caused primarily by a 280 basis point decline at Dressbarn,” the report says. “The decline mainly reflects higher markdown requirements to maintain appropriate inventory levels, a higher level of promotional selling, particularly at Dressbarn, due to lower than expected customer demand, and higher shipping costs related to increased direct channel penetration.”
In more recent quarters, Ascena reported a 1% comparable sales decline at Dressbarn in its fiscal first quarter ended Nov. 3 and 4% decline in fiscal second quarter ended Feb. 2.
The news comes after Ascena sold its Maurices brand to private equity firm OpCapita LLP for $300 million in March. Ascena will continue to operate back-end services of Maurices, including the supply chain and sourcing, something it noted could be offered to other third parties as a revenue-generating tactic.
Total 2018 ecommerce sales for Ascena was an Internet Retailer-estimated $862.6 million. Dressbarn accounts for 9.7% of Ascena’s total ecommerce sales, or approximately $83.4 million on online sales in 2018, while Maurices makes up 15.2%, or approximately $131.4 million. Ascena brands’ remaining share of online sales is divided between Ann Taylor, Loft, Lane Bryan, Catherines and Justice.Favorite