Traffic declines in apparel and other sectors have driven hundreds of planned or actual store closings so far this year. Women's fashion retailer Bebe Stores Inc. closed all 170 of its locations as of the end of May, and last week reported that it had reached purchase agreements for a Benicia, CA distribution center and, separately, for certain inventory and purchase orders. Macy's, JCPenney and Sears Holdings all have announced closings recently, and last week Hudson's Bay Inc., parent company of Lord & Taylor and Saks Fifth Avenue, said it would cut 2,000 jobs in North America, although it did not announce any store closings.

Ann Taylor

MAHWAH, NJ—Capping a quarter that saw it post a $1-billion loss on a $1.3-billion impairment charge, Ascena Retail Group plans to close at least 268 and as many as 667 stores over the next two years. Trepp LLC on Monday identified CMBS that could be affected by the closures, focusing on loans that list as top tenants one or more of Ascena's brands, which include Dress Barn, Ann Taylor and Lane Bryant.

In a conference call with investors this past Thursday, Ascena president and CEO David Jaffe said the company had identified “more than 250 locations” that will be permanently closed through 2019. Another 400 could go dark if Ascena is unable to obtain rent concessions from the stores' landlords, said Jaffe.

A supplemental presentation indicates that the 667 stores represent 25% of the addressable Ascena locations between fiscal year 2017 and FY 2019; about 60% of Ascena's stores have lease expirations or actionable kick-out clauses during this period. Over the next 12 months alone, there are more than 1,300 leases that either expire or could be subject to early terminations, according to the presentation. Ascena operated 4,850 locations as of the end of the third quarter of FY '17.

During last Thursday's conference call, Jaffe told investors that Ascena is undergoing a transformation via “an accelerated and relentless attack on structural costs” including the store closures and “elevation of our platform capabilities to unlock top-line performance.” To the latter point, Jaffe said, “We have developed a highly efficient supply chain and foundational omni-channel platform that will enable us to respond to the fundamental changes in consumer behavior that are disrupting our industry. The unprecedented store traffic declines to the retail apparel sector are clearly masking what we see as an ongoing opportunity to create value through our powerful brands.”

Traffic declines in apparel and other sectors have driven hundreds of planned or actual store closings so far this year. Women's fashion retailer Bebe Stores Inc. closed all 170 of its locations as of the end of May, and last week reported that it had reached purchase agreements for a Benicia, CA distribution center and, separately, for certain inventory and purchase orders. Macy's, JCPenney and Sears Holdings all have announced closings recently, and last week Hudson's Bay Inc., parent company of Lord & Taylor and Saks Fifth Avenue, said it would cut 2,000 jobs in North America, although it did not announce any store closings.