Photographer: George Frey/Bloomberg

Ascena Quietly Built a Fashion Empire for Suburban America

The little-known company lacks glamour, but it’s a retail powerhouse

Hardly a household name, a company called Ascena Retail Group built a business on consumers often neglected by the upper reaches of the fashion industry. Now it’s one of the largest and most powerful women’s apparel retailers in America.

On Monday, Ascena announced the acquisition of Ann Inc., parent company of Ann Taylor and Loft, for $2.16 billion. The deal for the brands beloved by suburban moms and professional women expands the company into a 5,000-store behemoth with more than $7 billion in annual sales. It also furthers Ascena's conquest of Middle America.

Since 2009, Ascena has assembled a stable of women’s fashion labels that serve America’s underserved. Ascena labels Lane Bryant and Catherines sell plus-size apparel, while Dressbarn’s maxi dresses and suit separates aim to attract middle-aged woman, not young and trendy types. So does the simple everyday wear sold at Maurices. These segments, to many clothing companies, just aren’t that glamorous. Even Ascena's tween label Justice, with its graphic tanks and colorful print skirts, is really targeting the parents who buy those clothes for their kids. 

A look from Ann Taylor's exclusive Kate Hudson LBD collection in 2014.
A look from Ann Taylor's exclusive Kate Hudson LBD collection in 2014.
Ann Taylor via Bloomberg

“Ann Taylor may not be the destination for a young career woman in New York City, but it might be in Ohio,” says Poonam Goyal, an analyst at Bloomberg Intelligence. “When you go into real America, it’s fashion-forward and it’s affordable." 

Ann Taylor made its name selling dress shirts and sheaths for women to wear in the workplace. Loft is its more casual offshoot, presenting a more athletic image. It was the next logical step in Ascena’s expansion, says Goyal. With some of its brands already dominating the plus-size market, Ann Taylor and Loft fill voids with their smaller sizing. “Ann Inc. is Middle America too,” says Goyal. “It fits in with that customer, but it gives them access to every age group and every size.”

Founded in 1962 as Dressbarn, Ascena has pushed for growth through acquisitions since its 2009 purchase of Tween Brands, Justice's parent company. In 2012, it completed the purchase of Lane Bryant's parent, Charming Shoppes, representing a major push into plus-size. “We believe in buying brands not stores,” Ascena Chief Executive Officer David Jaffe said on a conference call with analysts following the Ann announcement. “So when we looked at the landscape and said OK, who is the best retailer, who’s got the best name out there, it was a very, very short list, and Ann was on top of it.” (Ann had been exploring a sale earlier this year, Bloomberg reported in February.)

Oliver Chen, an analyst at Cowen & Co., wrote in a note to clients that although the Ann deal will make Ascena a “women’s speciality retail powerhouse,” there are still many questions. Managerial changes and the slow progress of the Charming Shoppes acquisition may be causes for concern, he wrote.

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