Ann Taylor Bought by Owner of Lane Bryant

Ann Inc. hopes it will benefit from being part of a larger retail group.
Avatar:
Dhani Mau
Author:
Publish date:
Social count:
587
Ann Inc. hopes it will benefit from being part of a larger retail group.
Models at the Ann Taylor spring 2015 presentation. Photo: JP Yim/Getty Images

Models at the Ann Taylor spring 2015 presentation. Photo: JP Yim/Getty Images

Rumblings began in February that Ann Inc., parent company of the Ann Taylor and Loft brands, was looking for a buyer. And as of Monday, it has one. Ascena Retail Group announced that it has entered into a merger agreement under which it will acquire the retailer for a combination of cash and stock valuing the company at about $2 billion.

In exchange for each Ann Inc. share, investors will receive $37.34 in cash and 0.68 of Ascena stock. All together, Ann Inc. investors will own about 16 percent of Ascena. The deal is expected to close in the second half of the year.

Brands currently under the Ascena umbrella include Lane Bryant, Dressbarn, Cacique and Maurices, and it sounds like Ann Taylor plans to take advantage of Ascena's experience in the women's mass retail market. "The transaction will make us part of a larger organization with a diversified portfolio of brands focused on the women's apparel market, a strong operating platform and a powerful financial base," stated Kay Krill, president and CEO of Ann Inc. She adds that the company plans to "take steps to better strategically and operationally position our brands for the dynamics that are redefining the landscape of the women's specialty retailing industry."

Like many retailers, Ann Taylor has struggled in recent years due to a changing environment, heavy discounting and increased competition. That said, it's begun to show signs of recovery, posting a sales increase of about 4 percent in the fourth quarter of 2014.