Ascena Retail Group, Inc.

The downfall of Ascena Retail Group, Inc., the parent company of Ann Taylor, Lane Bryant, and DressBarn, was largely foretold by our FRISK® score prior to the COVID-19 pandemic.

With millions of women unemployed or working from home as a result of coronavirus restrictions, the demand for women’s professional clothing — Ascena’s core product — has plummeted in the last several months. The financial danger, however, predates the pandemic. The acquisition of the aforementioned Ann Taylor and sister brand Loft in 2015 was intended to bolster revenue by attracting customers willing to pay higher prices. In actuality, the move stuck the company with more than $1 billion USD in debt without increasing sales.

Here's how the FRISK® score regressed in recent months: 

 

 

Image
Ascena Retail Group, Inc. FRISK® score

Ascena was losing money hand over fist, posting a net loss of at least $600 million in 2019, compared with a loss of $9 million in 2016. COVID-19 provided the coup de grace to Ascena Retail Group.

Download the free report to learn more.

About Bankruptcy Case Studies

CreditRiskMonitor® Bankruptcy Case Studies provide post-filing analyses of public company bankruptcies. Our case studies educate subscribers about methods they can apply to assess bankruptcy risk using our proprietary FRISK® score, robust financial database, and timely news alerts.

In nearly every case, a low FRISK® score gave our subscribers early warning of financial distress within a one-year time horizon. Our proprietary FRISK® score predicts bankruptcy risk at public companies with 96% accuracy. The score is formulated by a number of indicators including stock market capitalization and volatility, financial ratios, bond agency ratings from Moody’s, Fitch and DBRS, and crowdsourced behavioral data from a subscriber group that includes 35% of the Fortune 1000 and thousands more worldwide.

Whether you are new to credit analysis or have decades of experience under your belt, CreditRiskMonitor® Bankruptcy Case Studies offer unique insights into the business and financial decline that precedes bankruptcy.