Ascena Retail Group Inc. is preparing to file for bankruptcy and shutter 1,200 of its retail locations, according to a Wednesday report by Bloomberg.
The Mahwah company, parent to women’s clothing stores Ann Taylor and Lane Bryant and girl’s store Justice, may enter Chapter 11 this week with a creditor agreement that eliminates around $700 million of its $1.1 billion debt load, the report said, citing people familiar with the matter.
Lenders would assume control of the company, they said.
Ascena‘s mall-centric portfolio, which also includes LOFT, Lou & Grey, Cacique and Catherines, was hard hit by the COVID-19 pandemic that shuttered malls throughout the country, including in New Jersey until just last week.
Referencing that and years of declining foot traffic in malls, the Bloomberg report said a bankruptcy filing would allow the company to keep some of its brands operating while it shutters or sells others.
Ascena is considering selling some of its chains, including Catherines and Justice, Bloomberg’s source said, though the plan is not final.
Ascena did not immediately return NJBIZ’s request for comment.