The operator of the Lane Bryant and Dressbarn brands is buying the parent of iconic women's wear retailer, Ann Taylor. Fred Katayama reports.
Ascena Retail Group is buying Ann. It's paying the parent of the iconic women's officewear brands Ann Taylor and Loft $2.2 billion in cash and stock.. The acquisition will create a company focused on women's specialty apparel with sales of more than $7 billion and more than 4,900 stores. Ascena operates 5 womens brands, including plus-sized clothier Lane Bryant and working women's wear chain, Dressbarn. Ann has been hit hard by increased competition from fast-fashion chains like H&M and Zara, heavy promotions and cutbacks in consumer spending. Ascena's CEO David Jaffe believes the two companies can gain from each other. He pointed to Ann's e-commerce business on a conference call, saying "There are a lot of things we see in Ann they do extremely well... They lead in that (e-commerce) area. We can learn a lot from their omnichannel efforts." He expects the deal will add to earnings in the first year after it closes. Investors cheered the marriage proposal: shares of Ann and Ascena shot up in early trading. Investors may get more details on the combination when Ann reports its quarterly earnings on the 22nd and Ascena next month.