Ann Taylor owner files Chapter 11 bankruptcy

NEW YORK — The operator of Ann Taylor and Lane Bryant filed for Chapter 11 bankruptcy protection Thursday, the latest retailer to do so during the pandemic.

Mahwah, New Jersey-based Ascena Retail Group Inc., which operates nearly 3,000 stores mostly at malls, had been dragged down by debt and weak sales for years.

As part of its bankruptcy plan, the company said it would close all of its Catherines stores, a “significant number” of Justice stores and a select number of Ann Taylor, Loft, Lane Bryant and Lou & Grey stores.

The company said it has reached an agreement with its creditors to reduce its debt by $1 billion. It received $150 million in new financing to continue operating during its reorganization.

Ascena joins a growing list of retailers that have filed for Chapter 11 in recent weeks, including Brooks Brothers, Neiman Marcus, J.C. Penney, J.Crew and Stage Stores. These retailers were already struggling with weak sales, but the forced closure of nonessential stores in March to reduce the spread of the coronavirus put them further in peril.

Roughly 40 retailers have filed for Chapter 11 bankruptcy this year, according to S&P Global Market Intelligence. That exceeds the number of retail bankruptcies for all of last year. About two dozen have sought bankruptcy protection since the pandemic started.

Analysts expect more to come as healthy retailers buckle under the financial toll from the pandemic, which has killed nearly 144,000 people in the U.S., according to Johns Hopkins University. Surges of new cases have kept shoppers away from stores while forcing reclosings of businesses in certain parts of the country. And shoppers are dramatically changing their habits, shifting from work clothes and more toward athletic wear.