News Feature | January 16, 2014

Ascena Retail Group Customers Chose "Clicks" Over "Bricks" This Holiday Season

Source: Retail Solutions Online
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By Anna Rose Welch, Editor, Biosimilar Development
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While slow store sales troubled the company this season, Ascena saw an increase in e-commerce

Like many retailers, Ascena Retail Group — which operates as Lane Bryant, Dress Barn, and Maurice’s, among others — had a disappointing holiday season. The company’s financial results for November and December were lower than expected and have led the company to decrease its full-year sales projections as a result. Comparable store sales for its five brands (including both store and e-commerce) showed mixed rates of success. Justice was down 3 percent while Maurice’s came in flat for the holiday season. Lane Bryant and Catherine’s performed the best this season, showing increases of 8 percent and 13 percent respectively, while Dressbarn comps went up 1 percent. Total sales for the company were only up by 1 percent, while comps decreased 2 percent.

Following in the footsteps of various other CEOs this year, CEO David Jaffe attributes the disappointing results to the excess promotions. He says, “A challenging holiday selling season resulted in increased promotional activity.” This was not a surprise to the exec, however, who was cautious upon entering the holiday season following the release of its first quarter financial results. Coming out of its first quarter, ended Oct. 26th, all of Ascena’s brands had seen comparable stores sales growth. Regardless, the company was prepared for a cutthroat season. Following the release of its first quarter sales, Jaffe said that the company took a “conservative approach to planning inventory, and developed promotional contingencies” to ensure it would end the year on strong footing. Indeed, now that the holiday season has ended and the results are in, Jaffe says the company is ready to take on the spring season, as it has cleared out remaining inventory and taken the necessary markdowns.

However, the company did report strong e-commerce sales, suggesting its online strategies are working well. For the holiday season, online sales were up 27 percent. Back in June 2012, the company acquired Charming Shoppes, which included Catherine’s and Lane Bryant stores. These acquisitions have only strengthened the company’s online presence, as Internet Retailer says the company has reported $400 million in e-commerce sales in 2013. This amount is more than double what the brand saw in 2012 without the help of Charming Shoppes.

E-Commerce Takes Center Stage

Looking into the future, the company says it plans to open 185 stores and close 135 stores, ending the year with 3,900 Justice, Lane Bryant, Maurice’s, Dressbarn, and Catherine’s stores in operation. It is also making progress with its “synergy initiatives,” which, Jaffe says, will set the company up for long-term growth.

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