Women’s apparel retailer Ann Inc. announced last week that it plans to sell its always-on-sale stores, Ann Taylor and Loft—seriously, if you pay full price at these places, you’re doing it wrong—to Ascena Retail Group, which owns women’s clothing stores Lane Bryant and Dress Barn.
The $2.1 billion sale is the latest ripple in what’s been a choppy women’s apparel market. Ann Inc.’s sale comes a little over a year after the company announced a realignment of its organization, which led to the elimination of about 10% of its corporate workforce. Soon after, Golden Gate Capital, a firm known for rehabbing struggling retailers like Eddie Bauer and Zales, bought a 9.5% stake in the company, making it Ann Inc’s largest shareholder. The move prompted rumors that the private equity firm would buy the company.
Ann Inc.’s offerings haven’t resonated with its traditional customers. At the Loft, they were too neutral and not Bohemian enough, says Rebecca Duval, an analyst at Bluefin Research. At Ann Taylor, styles were too modern. “I think that when you have a company that’s in such a transition—when you have fewer designers, fewer merchants, fewer people doing more work—there’s no time to consider the assortment at all levels.” Ann Inc. has recorded declining same store sales in three of the past four quarters. The company declined to comment.
Ann Inc. is certainly not the only women’s clothing retailer that’s in a funk. Coldwater Creek filed for bankruptcy protection last year. In February, Chico’s announced it was closing 120 underperforming stores while opening 40, a decrease from its initial plans to open 60 to 70 new locations. Once the envy of the retail industry, J. Crew has struggled recently, with same-store sales falling 2% in 2014. Gap Inc.’s namesake brand is also in a rut; its comparable store sales fell 10% in the most recent quarter—the fifth consecutive quarterly decline.