Ascena Retail Group (formerly Dress Barn, Inc.) has left the farm for greener retail pastures. The apparel and accessories retailer operates about 4,900 specialty stores throughout the US, Puerto Rico, and Canada. Its 800-plus dressbarn stores court women ages 35 to 55. Maurices, with some 990-plus locations, targets 17-to-34-year-old females in towns with populations between 25,000 and 100,000. Its second-largest chain, Justice and its Charming Shoppes subsidiary, courts "tweens" at about 940 stores and online. In 2015, Ascena purchased upscale retailer ANN, which became Ascena's largest segment and added Ann Taylor, Lou & Grey, and LOFT stores.
The company operates six business segments: ANN, Justice, Lane Bryant, maurices, dressbarn, and Catherines.
ANN offers sells clothes for women under its Ann Taylor and LOFT brands, and accounts for around a third of the company's revenue.
Justice makes clothes and related branded merchandise for girls age 6-12; Lane Bryant and maurices specialize in plus-sized fashion for women in suburban and small towns; the three chains each bring in around 16% of net revenue.
Catherines offers mid-range wear-to-work and casual clothing and accessories, and brings in some 6% of revenue.
Dressbarn accounts for 14% of sales.
New Jersey-based Ascena Retail Group's +4,900 specialty stores are located across the US states, as well as in Puerto Rico and Canada. The Justice and maurices chains operate 42 stores and 35 stores in Canada, respectively. While more are planned, they contribute an insignificant amount of sales at present.
ANN has stores in 47 states, the District of Columbia, Canada and Puerto Rico as well as six international franchise stores. Justice has stores in 48 states and Canada as well as 68 international franchise stores, while maurices has stores in 45 states and Canada. dressbarn, Lane Bryant and Catherines have stores located in 48, 47 and 44 states, respectively.
ANN segment had 13 company-operated stores in Canada. ANN had the highest number of stores of about over 1,020 in fiscal 2015.
Sales and Marketing
Ascena Retail employs a variety of advertising and marketing strategies across its six retail brands. The company engages in customer research, promotional events, window and in-store marketing materials, as well as direct mail, online, and magazine advertising. In fiscal 2016 (ended July), the company spent $271 million on advertising and marketing, compared with $177 million the previous year and $160 million in fiscal 2014.
The acquisition of ANN in August 2015 bumped up revenue a healthy 46% in fiscal 2016, to $7.0 billion. Comparable sales fell by $214 million. The company reduced its net loss from $236.8 million to $11.9 million, partly due to higher net revenue, and partly due to the absence of impairment goodwill relating to the write-down in Lane Bryant value.
Cash from operations increased 3% to $445.4 million.
Ascena Retail Group mines different retail niches, including younger women (ages 17 to 34), tween (ages seven to 14) girls, plus-size women (sizes 12 to 32), and "mature" women through its various retail brands. The recent acquisition of ANN and its Anne Taylor and LOFT brands taps into the working women market.
Acquisitions are key to the holding company's successful growth strategy. Concurrently, the company is working to right-size its store network, closing underperforming Dress Barn locations, and adding Maurice's shops and Justice stores, including locations in Canada. While the company's international presence is relatively light, it's exploring other international opportunities for its brands. Licensing presents an opportunity for overseas growth.
Another focus for the company is its omnichannel strategy, which includes traditional stores, in-store ordering capabilities, and e-commerce operations. It made nearly $520 million from online sales in 2015, up 15%.
Mergers and Acquisitions
In 2015 the company doubled down on its plan to focus on older customers when it paid $2.2 billion for upscale retailer ANN, parent of career-wear maker Ann Taylor and its more casual LOFT banner. The acquisition positioned Ascena as the third largest specialty apparel retailer and the single largest focused on women's apparel, with a diverse brand portfolio that serves women of all ages, sizes and demographics.