Ascena Retail Group is shuttering more stores. The parent company of Dress Barn, Lane Bryant and Ann Taylor announced that over the next two years, due to an effort to cut costs, it will close over 667 stores, which represents close to 15% of its footprint in the retail industry.
Since the start of 2017, the company has closed 71 of its stores and will continue to do so with over 50 more being closed during its ongoing quarter.
CEO and president of the company David Jaffe said a comprehensive analysis had been done of the entire fleet of stores, sales transfer rates and customer behavior. The company, he added, is confident this strategy will create a leaner as well as more profitable business.
The company, based in Mahwah, New Jersey, posted a decline of 6% in its net sales to just over $1.56 billion compared to the same period one year ago, while reporting a unadjusted loss of $5.39 a share for its fiscal third quarter, in comparison to a 8 cents per share profit during the same quarter last year.
Comparable store sales across all its fashion brands experienced declines of mid-single to low double-digits. In all, sales at same stores were down by 8% during the quarter.
The CEO said he is expecting that for the foreseeable future the company would weather the major headwinds, as consumer shift their shopping preferences and move more toward shopping online and at off-price locations such as Amazon and TJX companies HomeGoods, Marshalls and TJMaxx.
He explained that responding to the shift in shopping habits requires changes that are fundamental in the operating model for retailers and significant progress has been made by the company toward transforming the business to compete in what is becoming a completely new environment.
An important piece of what company executives called its transformation program Change for Growth, is optimizing store count, next to other investments in infrastructure, technology and the reduction in merchandise procurement spending.
The unprecedented declines in store traffic across the retail apparel sector clearly are masking what the company sees as the continuing opportunity to create value via the company’s powerful brands, said Jaffe.
Ascena is not the first or only company that has recognized there is a need to quickly respond to changing patterns of shopping.
JC Penney, Sears and Macy’s are a few of the once giants of the industry that have done the same.