Ascena Retail Group Inc fka ASNAQ

[tdeck]

DD POST FOR $ASNA

Ascena Retail Group, Inc.

Outstanding shares..........197.80 Million

Public Float..........156.96 Million

Institutional/Funds Reported August 15th 13F filers

Increased Positions.....61.....21,788,253 shares

Decreased Positions.....93.....19,145,550 shares

New Positions.....13.....8,081,899 shares

Sold Out Positions.....43.....5,096,048

Largest Holders 13F/13G/13D filers

BlackRock, Inc..............25,919,983.....13.1%

Stadium Capital Management..19,231,162.....9.8%

GOLDEN GATE PRIVATE EQUITY..17,468,570.....8.83%

Dimensional Fund Advisors...15,502,339.....7.83%

Nomura Holdings, Inc........15,105,247.....7.63%

The Vanguard Group..........13,652,497.....6.9%

Sapience Investments, LLC...10,395,417.....5.25%

PRIMECAP MANAGEMENT..........6,663,000.....3.36%

Renaissance Technologies.....5,881,240.....2.97%

Atom Investors Lp............5,872,804.....2.96%

SCHWAB CHARLES
INVESTMENT MANAGEMENT INC....5,266,883.....2.66%

STATE STREET CORP............ 4,886,334....2.47%

CANADA PENSION PLAN
INVESTMENT BOARD.............4,337,756.....2.19%

ICM ASSET MANAGEMENT INC/WA..3,196,943.....1.61%

Connor, Clark & Lunn
Investment Management Ltd....2,980,211.....1.5%

GEODE CAPITAL MANAGEMENT.....2,318,167.....1.17

NORTHERN TRUST CORP..........2,125,676.....1.07%

Bank of New York Mellon......2,038,539.....1.03%

PRINCIPAL FINANCIAL GROUP....1,394,379.....0.70%

Spark Investment Management..1,183,900.....0.59%

Under 900K holders total....17,880,496.....7.52%

Total.....................................93.759%

Shares Sold Short
as of August 30th.............51.83 Million.....33.02% of the float


Stock Repurchase Program authorized to repurchase up to $181 million.

As of September 22, 2019, stores operated by Acena. In the USA, Canada and Mexico

Ann Taylor brand with 965 Locations which include the Lou and Grey
is included in that number and is carried at Ann Taylor, Loft and Nordstrom

https://www.anntaylor.com/

https://www.louandgrey.com/

Loft brand with 669 locations which includes

https://www.loft.com/

Lane Bryant brand with 736 stores

https://www.lanebryant.com/

Catherine's brand with 335 stores

https://www.catherines.com/

Cacique Intimates sold in Lane Brant stores

https://cacique.lanebryant.com/content/about-us


The last brand is Dress Barn which was the first brand but is now being closed down as fashion trends change and women's wear changes, they have offered up their intellectual property for sale as it is a well known brand the could still be utilized and reopened on a much smaller scale in my personal opinion in targeted areas around the country, in it's current form it is unsustainable and with ASNA being a huge conglomerate not enough attention can be given to it in the current retail climate to make it work.

My own thoughts are it could/should have been slimmed down long ago and stores kept open in areas where they would have thrived and do now, but the problem being there are too many places it doesn't.

I believe in African American communities in the inner cities and to a vast number of communities in the south and Midwest it would be a great business. One glaring obvious reason is the number of women in these communities that attend church regularly and always want to look their best and in those communities the dress has not gone out of favor as it has elsewhere in the country, but thats just my opinion, but as a nationwide model in all communities, it just cannot make it anymore, the winners end up paying for the greater number of losers. So we shall see if one or two companies or entrepreneurs have the same mind set that I do, I think it could be an excellent 200 store chain without a doubt making a tidy sum but 5-800 not anymore, not in 2019.

Now they have been closing the stores in a staggered basis as different landlords have different mindsets and some leases are/were in their ending phase up to date as far as I have been able to find out they have shuttered 65 stores since the ER for Q3 when they had 674 giving them 609 this is down from 739 last year as they were already closing them as leases were coming to term, all the stores will be closed as of December 31, 2019.


The term loan, $1,371m outstanding. Loan maturities are as follows:
2021 - $66.5
2022 - $90
2023 - $1,215


Sales %'s in Q3

Luxury 43%

Plus size 25%

Kids 18%

Value Fashion with 14%


Sales in Q3

Premium Fashion

2019 $549.5 million

2018 $532.7 million

Plus Fashion with 32

2019 $311.5 million

2018 $312.8 million

Kids Fashion with

2019 $227.4 million

2018 $233.8 million

Value Fashion with

2019 $177.3 million

2018 $187.4 million

Operating losses for Q3

Premium Fashion $ (5.6)

Plus Fashion (27.7)

Kids Fashion (25.4)

Value Fashion (43.1)

Unallocated restructuring and other related charges (7.1)

Unallocated impairment of goodwill (115.1)

Unallocated impairment of other intangible assets (25.0)

Total operating loss $ (249.0)

Premium Fashion operating results decreased by $28.1 million primarily driven by a decline in gross margin rate, and an increase in operating expenses primarily associated with increased variable distribution costs, employee-related costs, and marketing expenses partially offset by an increase in comparable sales and lower store expenses.

Plus Fashion operating results decreased by $34.9 million primarily due to a decline in comparable sales and gross margin rate, an increase in marketing expenses, employee-related costs, and a charge of approximately $16.3 million to write down store-related fixed assets, offset in part by lower occupancy costs associated with our fleet optimization program.

Kids Fashion operating results decreased by $20.3 million primarily due to the lower gross margin rate, a decline in comparable sales, and higher SG&A expenses, mainly reflecting higher employee-related costs.

Value Fashion operating results improved by $11.9 million primarily due to an increase in gross margin rate and a decrease in operating expenses, offset in part by the impact of lower sales volume due to a reduced store count. Operating expense reductions were primarily driven by lower occupancy and store expenses associated with our fleet optimization program.

Operating loss was $249.0 million compared to $48.5 million in the year-ago period, resulting primarily from the goodwill and intangible asset impairments discussed above and the decline in gross margin rate. Write down losses are not the same as folding money losses, the numbers change on an accountants figures and poof you lose $200 million and never even get a kiss.


Nine Months Ended May 4, 2019 sales

2019 $4,039.2 Billion

2018 $4,046.9 Billion

Now Q4 will be down overall but that will be because Maurice's was sold, but, Ascena owning 49% will share in the profits from Maurice's which will be added to Q4 and 2019 Full year as well as the $200 million in cash after fees from the sale itself.

I say profits as the company that bought it is rather good at what they do and its only one brand they can focus on and streamline, this is what they do. As well Maurice's will not have all the excess baggage attached to it IMO.

In this next set of numbers you can see why much easier their reasoning for selling Maurice's and Lane Brant and Catherine's and closing Dress Barn

Nine Months Ended

Premium Fashion

2019 $1,784.4 Billion

2018 $1,697.4 Billion

Kids Fashion

2019 $820.1

2018 $822.5

Plus Size

2019 $902.7 Billion

2018 $957.5 Billion

Value Fashion

2019 $532.0 Billion

2018 $569.5 Billion

The nice gains YoY in Premium were literally turned upside down by Plus and Value Fashion Plus needs a company that can focus on it better, plenty of value there, especially Lane Bryant sometimes companies just get too big in retail with too many brands under 1 roof, someone will suffer. Dress barn, its time just passed much smaller, better focused on locations could be great but takes someone with the time and where withal.


Looking forward to the close of the sale of the Plush fashion line, that will literally change the scope, that with the Maurice's $200 million will wipe out short term debt, a large portion of long term debt and other monies owed that will give the company breathing room, lower interest payments and let them focus on getting the ship righted.