ascena retail group, inc. Announces ‘Change for Growth’ Profit Enhancement Program, and Related Organizational Changes
— Expects Additional $100 – $150 Million in Cost Savings by Fiscal
2019 —
— Reschedules Investor Day to January 18, 2017 —
MAHWAH, N.J.–(BUSINESS WIRE)–After more than six months of extensive planning, ascena retail group,
inc. (NASDAQ:ASNA) (the “Company”) today begins the execution
phase of its major enterprise transformation plan. In addition to the
ongoing implementation of its $235 million cost-savings initiative
associated with its integration of ANN INC., the Company expects its new
Change for Growth program will deliver an incremental $100 – $150
million of cost savings by fiscal 2019. The Change for Growth program
will refine ascena’s operating model to increase its focus on key
customer segments, improve its time-to-market, reduce working capital,
and enhance its ability to serve its customer on any purchasing
platform, all while better leveraging the Company’s powerful shared
services platform.
The Company is making significant organizational changes as part of its
accelerated execution plan, and has restructured its business into four
operating segments. Reporting of future results will be based on this
new segment structure:
- Premium Fashion – Ann Taylor, LOFT, and Lou & Grey
- Plus Fashion – Lane Bryant and Catherines
- Value Fashion – maurices and dressbarn
- Kids Fashion – Justice
The Company also announced the creation of its new ascena Brand Services
(aBS) team, which will assume the responsibilities for its existing
centralized Shared Services Group functions, including supply chain,
logistics, sourcing, and IT, as well as additional brand support
functions to be developed through its Change for Growth program.
David Jaffe, President and CEO of ascena retail group commented, “Our
leadership team has maintained its focus on long-term value creation for
our shareholders by ensuring ascena has a strong combination of
attractive brands and leading supply chain capabilities. After more than
six months of intense development work, today we begin our comprehensive
Change for Growth program to ensure that the Company is effectively
positioned to compete in a rapidly and profoundly changing retail and
consumer environment. Over the past few years we have made substantial
investments in our brand portfolio, supply chain and logistics
capabilities, and shared service platform, and we believe we are well
positioned to leverage these investments to deliver value for our
customers and shareholders. We are ahead of plan with the synergy and
cost savings workstreams that will deliver $235 million of cost savings
associated with our integration of ANN INC., and the time is right for
us to explore additional opportunities to fully exploit the advantages
we’ve developed with our comprehensive shared services platform. Our
Change for Growth program is designed to ensure ascena is lean, agile
and playing to win. Through this transformation work, we expect to
deliver incremental cost savings of $100 to $150 million by fiscal 2019.
We will continue to work aggressively on customer-facing capability and
operating efficiencies to drive benefits on both the margin and cost
side of our financials, and we believe there is additional opportunity
beyond what we have highlighted today as we continue our transformation
work with Accenture.”
Jaffe concluded, “We would like to discuss the Change for Growth program
in the depth our investors have come to expect, and given the
acceleration and the major scope of this overall program, we have
decided to postpone our Investor Day until January 18, 2017.”
The Company is pleased to announce that Brian Lynch, most recently
President and CEO of the Company’s Justice brand, will assume direct
responsibility for ascena Brand Services in his new role as ascena’s
Chief Operating Officer. Mr. Lynch commented, “I’m excited to take on
this broader role. I believe applying the customer lens I use as a brand
leader to my new role will enable strong partnerships between our shared
operational functions and our brand segment leaders. It is this aligned
partnership that will help us better develop and deliver new
capabilities to serve our customers.” David Jaffe added, “I am very
excited to have Brian step into the role as ascena’s Chief Operating
Officer. He is uniquely qualified for this role, having prior President
and COO experience, and senior roles in ecom operations, retail
operations, and field leadership across leading companies including The
Walt Disney Company, Gap Inc., and most recently, ANN INC.”
Gary Muto, President and CEO of the Company’s ANN brands, will retain
responsibility for the Ann Taylor, LOFT, and Lou & Grey brands, which
now comprise the Company’s Premium Fashion segment. Linda Heasley, most
recently President and CEO of Lane Bryant, has been appointed President
and CEO of the Company’s Plus Fashion segment. George Goldfarb, most
recently President and CEO of maurices has been appointed President and
CEO of the Company’s Value Fashion segment. Lece Lohr, most recently
head of merchandising at Justice succeeds Mr. Lynch as the new President
of the Company’s Kids Segment.
The aforementioned restructuring has been accompanied by a number of
executive departures to eliminate organizational overlap, which will
result in a pre-tax charge of approximately $10 to $12 million in the
first quarter. These changes were not included in the Company’s
guidance, but the Company expects to recover the majority of this charge
in the form of reduced operational expenses over the course of fiscal
2017. Additional charges are expected in the future related to ongoing
transformation work.
About ascena retail group, inc.
ascena retail group, inc. (NASDAQ:ASNA) is a leading
national specialty retailer offering apparel, shoes, and accessories for
women under the Ann Taylor, LOFT, Lou & Grey, Lane Bryant, maurices,
dressbarn and Catherines brands, and for tween girls under the Justice
brand. ascena retail group, inc. operates ecommerce websites and
approximately 4,900 stores throughout the United States, Canada and
Puerto Rico.
For more information about ascena retail group, inc. visit:
ascenaretail.com, AnnTaylor.com, LOFT.com, louandgrey.com,
lanebryant.com, cacique.com, maurices.com, dressbarn.com,
Catherines.com, and shopjustice.com.
Forward-Looking Statements
Certain statements made within this press release may constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements are subject to certain risks and uncertainties that could
cause actual results to differ materially. The Company does not
undertake to publicly update or review its forward-looking statements
even if experience or future changes make it clear that our projected
results expressed or implied will not be achieved. Detailed information
concerning a number of factors that could cause actual results to differ
materially from the information contained herein is readily available in
the Company’s most recent Annual Report on Form 10-K.
Contacts
For investors:
ascena retail group, inc.
Stacy Turnof,
551-777-6928
Vice President of Investor Relations
stacy.turnof@ascenaretail.com
or
ICR,
Inc.
James Palczynski, 203-682-8229
Partner
jp@icrinc.com
or
For
media:
ascena retail group, inc.
Sue Ross, 218-491-2110
Executive
Vice President, ascena Corporate Affairs Communications Officer
sue.ross@ascenaretail.com
