The operator of Ann Taylor and Lane Bryant filed today for Chapter 11 bankruptcy protection, the latest retailer to do so during the pandemic.
Both Ann Taylor outlets in Hawaii — one at Ala Moana Center and the other at Pearlridge Center — will be closing. An employee at the Pearlridge store said she was told that the store would close in mid to late August.
Mahwah, N.J.-based Ascena Retail Group Inc., which operates nearly 3,000 stores mostly at malls, had been dragged down by debt and weak sales for years.
As part of its bankruptcy plan, the company said that it would close all of its Catherines stores, a “significant number” of Justice stores and a select number of Ann Taylor, Loft, Lane Bryant and Lou & Grey stores.
The company said it has reached an agreement with its creditors to reduce its debt by $1 billion. It received $150 million in new financing to continue operating during its reorganization.
Ascena joins a growing list of mostly clothing retailers that have filed for Chapter 11 in recent weeks, including Brooks Brothers, Neiman Marcus, J.C. Penney, J.Crew and Stage Stores. These retailers were already struggling with weak sales, but the forced closure of non-essential stores in March to reduce the spread of the coronavirus put them further in peril.
Roughly 40 retailers, including big and small companies, have filed for Chapter 11 bankruptcy so far this year, according to S&P Global Market Intelligence. That exceeds the number of retail bankruptcies for all of last year. About two dozen of them have sought bankruptcy protection since the pandemic started.
Analysts expect more to come as healthy retailers buckle under the financial toll from the relentless pandemic that continues to drag on. Surges of new cases around the country have kept shoppers away from stores while forcing re-closings of businesses in certain parts of the country. And shoppers are dramatically changing their shopping habits, shifting away from work clothes and more toward athletic wear. They’re also focusing on food and home products and continue to step up their online buying.
Shoppers, worried about their finances, could pull back even more heading into the critical fall and holiday shopping season.