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Item Description – is taking drastic steps to overcome the financial losses of COVID-19. Ascena Retail Group Inc., the parent company of clothing chains Lane Bryant and Ann Taylor, filed for bankruptcy on Thursday. This is the latest of many .Ascena Retail Group Inc. is moving forward with a Chapter 11 filing to avoid shutting down permanently. There will be significant changes in the chains they manage. The plans include closing over half of the group’s stores, which will total over 1,000 locations. Control will be passed to its lenders to cover the debt.Around 40,000 employees work for Ascena. Some of them will most likely end up losing their jobs. Exactly how many is still uncertain. Store locations that are on the chopping block include those in Canada, Mexico, Puerto Rico, and the United States.The bankruptcy filing also includes the complete closure of the Catherines plus-size clothing chain. The Catherines website currently displays a note to its customers thanking them for over 60 years in business.60 Years in the Retail IndustryBefore the Ascena Retail Group Inc., there was Dressbarn. Dressbarn opened in 1962 in Stanford, Connecticut. Founder Roslyn Jaffe saw an unfulfilled niche when women were beginning to enter the workforce in greater numbers. She created a store that sold professional garments for women.The company reorganized in 2011, creating the Ascena Retail Group Inc. The company expanded its offerings into girls’ and tween clothing with the Justice chain. Justice was the successor of retailer Limited Too.Ascena acquired retail holding company Charming Shoppes the following year, which added Catherines Plus, Cacique, and Lane Bryant. Another expansion occurred in 2015 when Ascena acquired Ann Inc., which added Loft and Ann Taylor.The company permanently closed 650 Dressbarn stores on December 26th, 2019.Dealing with a Global Pandemic Following suit with many other retailers earlier this year, Chief Executive Officer Gary Muto ordered the temporary shutdown of Ascena’s stores in March to protect staff and customers from the outbreak. Approximately 95% of locations were reopened after the initial shutdown but experienced lower than usual foot traffic. Store sales fell to between 30% and 80% in the last third of May. Management predicts that the trend will continue with revenue tumbling to just 21% by August, which marks the end of the financial year. More losses are expected into the fall season.. However, which brands will survive to take advantage of that opportunity remains to be seen. The Future of Ascena Retail Group Inc.Ascena Retail Group Inc. stated that it plans to reduce its debt by around $1 billion through a pre-arranged restructuring plan. This will give it better financial flexibility to move toward earning profits again.“The meaningful progress we have made driving sustainable growth, improving our operating margins and strengthening our financial foundation has been severely disrupted by the COVID-19 pandemic,” explained Interim Executive Chair Carrie Teffner.“As a result, we took a strategic step forward today to protect the future of the business for all of our stakeholders.”While the plans include the continued operation of some Ann Taylor, Lane Bryant, and Loft locations, the statement also mentioned that it will “include the exit of all stores across brands in Canada, Puerto Rico, and Mexico and the closure of all Catherines stores.”Existing lenders have supplied around $150 million in funding for Ascena. That amount combined with cash flow from ongoing operations and cash on hand is expected to meet the company’s needs.Ascena’s 2,800 stores will be reduced to 1,200.Shares are currently trading at under $1 and dropped 27% premarket and 90% year to date.While coronavirus was the catalyst, the company’s financial status also played a role in the decision to file bankruptcy. President of Customer Growth Partners Craig Johnson stated that Ascena was negatively affected by acquisitions made between 2005 and 2015. These occurred just as the women’s clothing market began to hit a plateau in sales.“Even closing hundreds of stores was not enough to rebalance supply and demand – ASNA was continually behind the curve,” he said. ASNA is Ascena’s stock ticker.“To exit the thousands of leases it was burdened with after the decade-long buying binge, Chapter 11 was inevitable, only a matter of when not whether.”Teffner’s court declaration said that Ascena had been looking for rescue options for months but determined that there were “no financing or other out-of-court alternatives that provided a viable path forward.”New Ownership for Ascena Retail Group Inc.According to court records, Monarch Alternative Capital and Bain Capital will be among Ascena’s new owners. Each will appoint a director while a group including those firms and Lion Point Capital and Eaton Vance Management will appoint another.The bankruptcy plans also include moving the Justice brand to a primarily online existence and the winding down of Lou & Grey stores.Australian retailer City Chic Collective LTD. is the lead bidder for Catherines assets, including intellectual property and the ecommerce side of the business. The sale is not finalized and will be subject to court approval, which means new bids could be submitted.