Ascena Sells Off Divisions to Sycamore Partners

The bankrupt Ascena Retail Group Inc. has agreed to sell Ann Taylor, Loft, Lane Bryant and Lou & Grey to Sycamore Partners, a private equity firm that owns Belk, Talbots, The Limited and Torrid, among other holdings.

Ascena said it signed an asset purchase agreement with Premium Apparel LLC, an affiliate of Sycamore Partners, which will acquire the brand assets for a purchase price of $540 million, on a cash-free and debt-free basis, subject to certain adjustments, and the assumption of certain liabilities.

Ascena, which has been bankrupt since July 20, has been following a dual course of action to emerge from bankruptcy, including selling its assets or enabling lenders to take over the company if they couldn’t find a buyer. Ascena has already sold off over the last several seasons assets including Maurices, Catherines and Justice. The deal with Sycamore would have to be approved by bankruptcy court.

Under the agreement, Premium Apparel has committed to retaining a substantial portion of the stores operated by Ann Taylor, Loft, Lane Bryant and Lou & Grey, and associates working at these brands.

“We are pleased to announce an agreement with Sycamore Partners, an experienced and trusted leader in the retail sector. The commitment Sycamore has made to our people and business is a testament to the long-term growth potential of our brands,” said Gary Muto, chief executive officer. “At Ascena, we have made significant progress in our financial restructuring process. We have worked diligently to maximize the value of all of our brands, and today’s agreement with Sycamore is the latest example.”

Muto continued, “I want to thank our associates, as well as our customers and vendors, for their support of Ascena and our brands. We are looking forward to the holiday season and beyond in Ann Taylor, Loft, Lane Bryant and Lou & Grey stores and online.”

“Ann Taylor, Loft, Lane Bryant and Lou & Grey are well-known brands, each with passionate associates and loyal customers,” said Stefan Kaluzny, managing director of Sycamore Partners. “These brands have significant potential, and we are excited about the opportunity to partner with Ascena’s talented team to continue delivering new and relevant experiences for customers.”

The transaction is expected to be completed by mid-December. Ascena previously signed a couple of deals to sell off assets. FullBeauty Brands Operations bought the intellectual property assets and e-commerce business of Catherines, a plus-size brand, and Justice Brand Holdings LLC, an entity formed by Bluestar Alliance LLC, has completed its acquisition of the intellectual property of Justice, a tween brand.

Ascena, which has been slashing costs, consolidating and closing stores for months, operates e-commerce sites and about 1,500 stores.

Sycamore Partners, based in New York, specializes in consumer, retail and distribution investments. In its statement Thursday, Sycamore said it “partners with management teams to improve the operating profitability and strategic value of their business” and that it has about $10 billion in assets under management. The firm’s investment portfolio includes Belk, CommerceHub, Hot Topic, MGF Sourcing, NBG Home, Pure Fishing, Staples North American Delivery, Staples United States Retail, Staples Canada, Talbots, The Limited and Torrid.

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