Ascena Retail Group (formerly Dress Barn, Inc.) has left the farm for greener -- but not leaner -- retail pastures. The apparel and accessories retailer operates more than 3,800 specialty stores throughout the US, Puerto Rico, and Canada. Its 825 Dress Barn stores cater to women ages 35 to 55. Maurices, with some 830 locations, targets 17-to-34-year-old females in small towns with populations between 25,000 and 100,000. Its Justice chain courts "tweens" at 940 stores and online. Its newly-acquired Charming Shoppes subsidiary operates the plus-size Lane Bryant and Catherines Plus Sizes apparel chains. Founded as Dress Barn in 1962, the company changed its name to Ascena Retail Group in 2011.
Ascena Retail Group's specialty store operations are largely concentrated in the US and Canada. While its Justice and Maurices chains both have stores in Canada (more are planned), they contribute an insignificant amount of sales at present.
Justice is the company's largest retail chain, accounting for nearly 40% of fiscal 2012 (ends July) sales. Dress Barn contributes nearly a third of its parent company's sales, followed by Maurices with 25%. Newly-acquired Lane Bryant and Catherines ring up the remainder.
Sales and Marketing
Ascena Retail employs a variety of advertising and marketing strategies across its five retail brands. The company engages in customer research, promotional events, window and in-store marketing materials, as well as direct mail, online, and magazine advertising. In fiscal 2012 (ends July) the company spent $81.5 million on advertising and marketing, up from about $69 million and $50 million in fiscal 2011 and 2010, respectively.
Group sales increased by 15% in fiscal 2012 (ends July), while net income fell by nearly 5% over the same period. Justice, Maurices, and Dress Barn all posted annual sales gains (up more than 12%, 9%, and 5%, respectively), while the June 2012 purchase of Lane Bryant and Catherines contributed more than $150 million in incremental sales for the year. Fast-growing Ascena has fueled its growth through acquisitions and the opening of new stores. Indeed, its sales have more than doubled over the past four years, while net income increased steeply and relatively steadily.
Ascena Retail Group mines different retail niches, including younger women (ages 17 to 34), tween (ages seven to 14) girls, and now plus-size females (sizes 12 to 32) through its various retail brands. Acquisitions are key to the holding company's growth strategy, such as Charming Shoppes (in 2012) and Justice (2009). Concurrently, the company is working to right-size its store network, closing underperforming Dress Barn locations, and adding nearly 50 Maurice's shops and 40 Justice stores, including locations in Canada, in fiscal 2012. Going forward, the company plans to continue to expand in both the US and Canada across all of its retail chains.
To control costs and increase efficiency, Ascena Retail has centralized certain distribution center, information technology, and payroll procession operations. It is also working to consolidate certain of its financial systems and processes across it five retail brands.
Mergers and Acquisitions
Acquisitive Ascena Retail purchased Charming Shoppes for about $900 million in June 2012. With more than 1,800 stores (and related e-commerce sites) under the Lane Bryant, Catherines Plus Sizes, and Fashion Bug banners, Charming Shoppes offered Ascena entry to the burgeoning plus-size market. It plans to focus on the Lane Bryant and Catherines brands, while shutting down Fashion Bug and divesting the Figi's gift business. – less