Vendor Frequently asked questions

1. What did ascena announce?
  • ascena has entered into a Restructuring Support Agreement (“RSA”) with over 68% of its secured term lenders.
  • The RSA is expected to significantly reduce debt by approximately $1 billion and provide increased financial flexibility to enable the Company to continue its focus on generating profitable growth and driving value for customers and stakeholders.
  • As part of the RSA, the Company has received commitments for $150 million in a new money term loan from its existing lenders.
  • To implement the RSA, we filed voluntary petitions for relief in the United States Bankruptcy Court under Chapter 11 of the United States Bankruptcy Code.
  • Through this process, we will continue operating our Ann Taylor, LOFT, Lane Bryant, Justice and Lou & Grey brands in stores and online.
  • As part of the balance sheet restructuring contemplated by the RSA, we will optimize our brand portfolio and strategically reduce our footprint with the closing of a significant number of Justice stores and a select number of Ann Taylor, LOFT, Lane Bryant and Lou & Grey This includes the exit of all stores across brands in Canada, Puerto Rico and Mexico and the closure of all Catherines stores.
  • In addition, we have entered into an asset purchase agreement with City Chic to sell the Catherines’ intellectual property assets and to transition its e-commerce business to a subsidiary of City Chic. This sale process will be conducted pursuant to Section 363 of the Bankruptcy Code. Accordingly, City Chic will serve as the “stalking horse bidder” in a court-supervised auction process and the agreement is subject to higher and better offers, among other conditions.
  • We will continue to operate our Ann Taylor, LOFT, Lane Bryant, Justice and Lou & Grey brands through a reduced number of retail stores and online.
  • The final number of store closings will be determined based on the ability of ascena and our landlords to reach agreement on sustainable lease structures. We believe the Plan is in the landlords’ long term interest and we are hopeful and optimistic that our landlords will partner with us to keep as many stores open as possible.
  • We expect to move through this process on an expedited timeframe and stay focused on generating profitable growth and driving value for customers and stakeholders.
  • We believe these actions will allow us to stabilize our financial position in the wake of the COVID-19 pandemic and move forward as a strong, profitable business.
2. Why did ascena make the decision to file for Chapter 11 now? How does this benefit the Company and its brands?
  • For the last two years, we have been working to find ways to address our debt and optimize our balance sheet.

 

  • While we were making meaningful progress driving sustainable growth, improving our operating margins and strengthening our financial foundation, the COVID-19 pandemic disrupted our financial foundation and business across all of our brands.
  • This uncertainty accelerated our need to take a proactive, strategic step forward to protect the business and all of our stakeholders.
  • The RSA we entered into with our lenders formalizes their overwhelming support for a comprehensive plan to deleverage our balance sheet, right-size our operations and inject new capital into the business.
  • This comprehensive restructuring, as well as the actions we are taking to optimize our brand portfolio and store fleet, mark a new start for our company and will allow us to expand our customer-focused strategies across her mobile, online, and store experiences.
3. What is Chapter 11 and what does it mean to file for Chapter 11?
  • Chapter 11 is a section of the U.S. Bankruptcy Code that allows companies to reorganize finances through a court-supervised proceeding while continuing to operate their business.
  • Chapter 11 permits, and even encourages, daily business operations to continue as usual.
  • For ascena and our related brands, Chapter 11 is a tool reduce debt, strengthen our financial position and optimize our store fleet.
  • As part of the RSA, we have received commitments for $150 million in a new money term loan from our existing lenders.
  • With our lenders’ overwhelming support for a comprehensive plan to deleverage our balance sheet, right-size our operations and inject new capital into the business, we intend to emerge from this process as a healthier and more stable portfolio of brands that provide fashion and meaningful experiences to our valued and loyal customers.
4. What is a “pre-arranged” Chapter 11 filing?
  • A pre-arranged plan means that ascena has received overwhelming support for a comprehensive plan before filing for bankruptcy protection. This shortens and simplifies the Court process and reduces uncertainty.
  • In our case, we initiated the Court-supervised process to implement our RSA with over 68% of our secured term lenders.
  • Many companies enter the Court-supervised process with no defined path forward – and those companies leave the discussions with lenders for later in the process.
  • What we are announcing is that we are using the Court-supervised process to implement the agreement we have reached. And, the RSA demonstrates the confidence our lenders have in our business.
5. Will ascena and its brands continue operations?
  • Throughout the restructuring process, the Company’s brands, including Ann Taylor, LOFT, Lane Bryant, Justice and Lou & Grey, will continue to provide customers with compelling fashion assortments and an exceptional shopping experience.
  • Customers were highly engaged with our brands through the COVID-19 pandemic and we intend to continue to provide the fashion and experience our loyal customers have come to know and love.
  • As part of the balance sheet restructuring contemplated by the RSA, we will optimize our brand portfolio and strategically reduce our footprint with the closing of a significant number of Justice stores and a select number of Ann Taylor, LOFT, Lane Bryant and Lou & Grey This includes the exit of all stores across brands in Canada, Puerto Rico and Mexico and the closure of all Catherines stores.
  • In addition, we have entered into an asset purchase agreement with City Chic to sell the Catherines’ intellectual property assets and to transition its e-commerce business to a subsidiary of City Chic. This sale process will be conducted pursuant to Section 363 of the Bankruptcy Code. Accordingly, City Chic will serve as the “stalking horse bidder” in a court-supervised auction process and the agreement is subject to higher and better offers, among other conditions.
  • We will continue to operate our Ann Taylor, LOFT, Lane Bryant, Justice and Lou & Grey brands through a reduced number of retail stores and online.
  • The optimization of our brand portfolio and store fleet will allow us to stabilize its financial position in the wake of the COVID-19 pandemic and move forward as a strong, profitable business.
6. Will the court-supervised restructuring process affect day-to-day operations?
  • Throughout this process, we will continue to offer the fashion and experience customers have come to know and love while also prioritizing the safety and well-being of our associates and customers.
  • Customers can continue to shop in-store and online while we continue to monitor the impact of COVID-19. Our stores are open in accordance with CDC guidance and we are conducting business on the e-commerce sites for each of the brands.
  • We have a clear vision for our future and our talented leadership team, established over the last year, will stay focused throughout this process on generating profitable growth and driving value for customers and stakeholders.
  • We look forward to our continued partnerships with our valued vendors, landlords and other stakeholders as we emerge from Chapter 11, and this pandemic, as a stronger company.
7. Does ascena have sufficient liquidity to continue operating and meet its obligations throughout this process?
  • Yes. We have received approval to access our more than $430 million in cash collateral.
  • We will seek authorization at our second day hearing to access the $150 million in a new money term loan from our existing lenders.
  • In addition, the new money term loan will be available during the pendency of the proceedings and will remain in place post emergence from Chapter 11.
  • This financing, combined with cash on hand and cash flow generated by the Company’s ongoing operations, is expected to be sufficient to meet ascena’s operational and restructuring needs.
  • We will need to continue to be prudent with these funds as we are still operating in an uncertain time.
8. Will there be any store closures?
  • As part of the balance sheet restructuring contemplated by the RSA, we will optimize our brand portfolio and strategically reduce our footprint with the closing of a significant number of Justice stores and a select number of Ann Taylor, LOFT, Lane Bryant and Lou & Grey stores. This includes the exit of all stores across brands in Canada, Puerto Rico and Mexico and the closure of all Catherines stores.
  • We have commenced clearance/store closing sales, which are expected to continue for approximately 30 – 60 days from the filing date depending on the store location.
  • The initial list of stores closing as part of our restructuring process is listed on our website (ascenaretail.com/restructuring).
  • The final number of store closings will be determined based on the ability of ascena and our landlords to reach agreement on sustainable lease structures. We believe the Plan is in the landlords’ long term interest and we are hopeful and optimistic that our landlords will partner with us to keep as many stores open as possible.
  • We will continue to operate our Ann Taylor, LOFT, Lane Bryant, Justice and Lou & Grey brands through a reduced number of retail stores and online.
9. What is Section 363 and why is ascena using it to sell the Catherines e-commerce assets?
  • Section 363 is a part of the U.S. Bankruptcy Code that helps companies complete sales or transactions.
  • We are using Section 363 to conduct a court-supervised sale process of our Catherines intellectual property assets and to transition its e-commerce business.
  • The asset purchase agreement we reached with City Chic, which is known as a “stalking horse bid,” is the first step in the sale.
  • As part of the process, other interested parties will have an opportunity to submit bids for the business.
  • If other bids are submitted, there will be an auction, and the winning buyer will be the one that has made the highest and best offer, as determined by the Court.
10. Will there be any distribution center closures?
  • Our distribution centers in Riverside, California; Greencastle, Indiana; and Etna, Ohio are continuing to operate.
  • We do not have plans to close any of our distribution centers; however, decisions regarding our facilities will continue to be made based on what makes the most sense for the business.
11. Is the Company going out of business?
  • Throughout this process, we will continue to offer the fashion and experience customers have come to know and love while also prioritizing the safety and well-being of our associates and customers.
  • We have a clear vision for our future and we will continue delivering meaningful experiences for our customers each and every day.
  • In fact, Ann Taylor, LOFT, Lane Bryant, Justice, and Lou & Grey are all iconic brands with strong customer loyalty. We believe in the long-term potential of these brands.
12. Will ascena’s senior management team remain in place?
  • Our current senior management team is expected to remain in place and will stay focused throughout this process on generating profitable growth and driving value for customers and stakeholders.
  • We have experienced senior leaders in place to lead each team and all teams will work together to serve our customer whenever and wherever she wants to shop.
13. When will ascena complete the financial restructuring process?
  • We expect to move through this process as efficiently as possible while we continue running our business.
  • In fact, we believe the RSA and the support we have received from our lenders will allow us to pursue a financial restructuring on an expedited timeframe.
  • While there is not a definitive timeline to share today, we will keep you informed of important milestones as we move forward.
14. How can I obtain more information?
  • Information about this process can be found on our restructuring website: ascenaretail.com/restructuring.
  • Vendors or business partners should be directed to visit the public website http://cases.primeclerk.com/ascena, call the Information Hotline at the following numbers or email ascenainfo@primeclerk.com.
  • Toll Free (US/Canada): (877) 930-4319
  • International Toll: (347) 899-4594
15. Does ascena have the liquidity to continue operating throughout this process?
  • We have received commitments for $150 million in a new money term loan from our existing lenders.
  • Following Court approval, this financing, combined with cash on hand and cash flow generated by the Company’s ongoing operations, is expected to be sufficient to meet our operational and restructuring needs.
  • We are continuing to serve our customers as we move through this process and we look forward to our continued partnerships with our valued vendors.
16. Will ascena continue to honor its contracts?
  • We plan to meet our ongoing obligations, including paying our vendors for all goods and services received on or after the filing date for assumed contracts.
17. Will I be paid for goods and services provided to ascena on or after the filing date?
  • Yes. Vendors will be paid in full for all goods and services received on or after the filing date.
  • Invoices for goods and services provided on or after the filing date should be submitted through the typical accounts payable channels, and payments will be processed in the ordinary course, if applicable.
18. Will I be paid for goods and services provided to ascena prior to the filing date?
  • U.S. bankruptcy law mandates that unpaid debts for goods received and services rendered prior to the filing cannot be paid without specific Court approval.
  • If you provided goods or services before the filing date and have not been paid, you can file a proof of claim with the Bankruptcy Court. Information regarding the claims process can be found on the Company’s claim’s agent website at http://cases.primeclerk.com/ascena.
19. What happens if my work started pre-petition and carried over into post-petition, do I need to send two bills?
  • Yes, you can send two separate invoices – one for the pre-petition period and the second for the post-petition period. Submitting separate invoices for pre- and post-petition claims will assist in expediting the review process.
  • Alternatively, if only one invoice is submitted, please clearly identify the date of goods or services provided.
  • Goods and services provided will be categorized as either pre- or post-petition claims according to the date the goods and services were received.
20. How do I know if my claim is considered pre-petition or post-petition? Is this decision based on the date of order, delivery or invoice?
  • Goods and services provided prior to the date of the Company’s Chapter 11 filing are considered pre-petition. Goods and services provided on or after the filing date are considered post-petition.
  • If you have additional questions related to this, please consult with your own attorney as we are not permitted to provide legal advice.
21. Will ascena pay invoices according to the same schedule that was used before the Chapter 11 filing?
  • Yes. ascena will continue to place orders and receive goods and services, and to pay all vendors in full for goods and services received on or after the filing date in ordinary course.
22. Will the Company continue to order goods and services from its vendors?
  • Yes. ascena will continue to place orders and receive goods and services.
23. Can I take back my goods?
  • It is against the law to take back goods from a company that has filed for Chapter 11 without following the applicable procedures under the Bankruptcy Code.
24. Can vendors renegotiate or terminate the terms of their contracts?
  • If you have a contract with ascena, bankruptcy code require that you continue to perform services or provide goods under that agreement unless otherwise ordered by the Court.
  • We are committed to the partnership we have developed with your organization and will continue to work closely with you throughout this process.
25. Why should I continue to do business with ascena?
  • Importantly, we are continuing to pay our vendors. We have sufficient cash to run our business. We are making sales and meeting our business and operational commitments.
  • We have received approval to access our more than $430 million in cash collateral.
  • We will seek authorization at our second day hearing to access the $150 million in a new money term loan from our existing lenders.
  • With the cash generated from our ongoing operations and this new money financing commitment, we expect to have sufficient liquidity to meet our operational obligations during the court-supervised process, including paying our vendors for all goods and services received on or after the filing date.
26. How do I file a proof of claim?
27. How can I obtain more information?
  • We will keep you updated on our progress as there is information to share.
  • Please visit ascenaretail.com/restructuring for more information.
28. Will my company contact representative remain the same?
  • Your contact remains the same.
Case Information

Court filings and information about the claims process are available at http://cases.primeclerk.com/ascena

PRIME CLERK RESTRUCTURING HOTLINE

Toll-free: (877) 930-4319
International:  (347) 817-4076
Email: ascenainfo@primeclerk.com