Back to Dress Barn and their costs from closing, lets talk about the elephant in the room. Closing the Dress Barn line with a large amount of stores and many different landlords the bulk of which are large public corporations that are also in a tough period with many retail retailers closing down stores either from the group (which really isn't that many) to those that are scaling down and closing stores in places that no longer do enough business, closing stores where they find they opened to many stores in one area and find they can close many that have their leases coming or near to term, this actually happens all the time, it is just overblown by media and hedge funds pushing articles and going on tv or giving the newsprint media quotes to help support their positions which were large in the retail and affiliated sectors (landlords) malls are closing, retail is dead run for your lives, BUY AMZN that happened in the 1999/2000 dot com craze too. Support your short, pump your long.
There have been rumors, substantive rumors that the overwhelming majority of Dress Barn's landlords were amiable to work out a deal to close Dress barns in an amenable way for both Ascena and the landlords.
First the company said "It also announced plans in May to close all 650 of its Dressbarn stores, which are a group of women's apparel stores and another part of the company's Value Fashion segment. Management also noted at this time that "we have received overwhelming landlord support for our plan, which will allow us to implement our wind down in a manner that provides the best recovery for our landlords".
Second I found a gif that came from a debt buyer/sellers private forum and it is added to this post. I also read the CC transcripts for numerous of the public company landlords and they did either state Dress Barns were to be open until December 18th specifically when asked or they addressed it in their comments at the start.
Or it was not mentioned in the comments or replies when questions asked as to ongoing closures that the companies had already spoke of or answered questions about ie. Charming Charlies, Forever 21 etc. No others were expected through "the end of the year" A few things IMHO worked for Ascena in these negotiations/talks one the length of the relationship Dress Barn/Ascena has/had with them as well as the relationship with the other lines Ann, Loft, Lane Bryant etc and the the sheer amount of stores the parent company has still going forward 1000's which is a big deal to the landlord companies and there shareholders, they have ER's and questions/answers the same as any other company. One hand washed the other so to speak, they worked together as they both found themselves in a pickle. The landlords did not want to lose revenue or have more stores closed through the rest of 2019 which gave them time to find new tenants and deal with the situation as it did ASNA.
So whether it was with concessions enough to make keeping all of the Dress Barns open or enough to make the losses not hurt, either way is win win for both, The landlords and for Dress Barn they both gave a little/lost a little but both filled a crack in the last 3 months of 2020. They have to keep them all open but they don;t lose a ton of money doing it and the landlords get to get another Q knowing the stores are no vacant and gives their lease mgt. teams time to fill them. Both sides keep an excellent working relationship going forward win/win. It also is a small sliver lining for Dress barn, being able to planned closure of 500 stores or so, they get to plan it out with months in advance and they all can seamlessly close during the best time of year, Thanksgiving through Xmas with after Xmas sales to mop up the floors. You cannot imagine the benefits to that tpe of closure don't get me wrong it's still a closure and won't be a lot of $$ made, but will be easier.
IMHO they will get a better price point for their goods through liquidation as sales will not have to be so deep to draw people in, you already have them, you have a captive audience so to speak. Also for in the buying for these stores that can seamlessly end and will be less costly, when you close a chain in a staggered fashion your cost of goods go up as the the amount you are purchasing is dropping with each order, your buyers no you are going and the lower your order count goes the lower your good pricing to buy. Because then the sellers have you as a captive audience, keeping pretty much to capacity the suppliers have no wiggle room as you can switch to somewhere else and your last buys will be some of your largest for the year as the holiday season is coming. But, like I said it isn't a we are gonna make a fortune, its a instead of losing a fortune and it being a staggered mess we may make some and it be a far easier less stressful process. It all ends today, kind of thing.
