NEW YORK CITY AND MAHWAH, N.J. — Premium Apparel LLC, an affiliate of New York City-based private equity firm Sycamore Partners, has entered into an agreement to purchase multiple clothing brands from Mahwah-based Ascena Retail Group (OTCMKTS: ASNAQ) for $540 million.
The apparel and footwear brands in question include Ann Taylor, LOFT, Lane Bryant and Lou & Grey. Under the terms of the deal, which is expected to close by mid-December, Premium Apparel will acquire the brands on a cash-free and debt-free basis.
Premium Apparel did not specify how many of brick-and-mortar stores will be affected by the transaction, but the new ownership did say that it remains committed to retaining a “substantial portion” of stores and employees affiliated with these brands.
“Ann Taylor, LOFT, Lane Bryant and Lou & Grey are well-known brands, each with passionate associates and loyal customers,” says 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.”
Ascena Retail Group, which operated about 1,500 stores throughout the country as of late August, filed for Chapter 11 bankruptcy in July. In September, the company agreed to sell its plus-size chain Catherines to FullBeauty Brands for $40.8 million. The company has also ceased operating its Justice and Dressbarn brands over the last 18 months.
Kirkland & Ellis LLP is serving as legal counsel to the Ascena Retail Group, and Alvarez and Marsal Holdings LLC is serving as restructuring advisor. Guggenheim Securities LLC is serving as Ascena’s financial advisor. Davis Polk & Wardwell LLP is serving as legal counsel to Sycamore Partners and Premium Apparel.
The stock price of Ascena Retail Group, which trades on the OTC Markets Group exchange, opened at 34 cents per share on Monday, Nov. 30, down from $9.40 per share a year ago.
— Taylor Williams