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Ascena Retail Group sells majority stake in Maurices brand

By Prachi Singh

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Report

Ascena Retail Group, Inc. has signed a definitive agreement to sell a majority interest in its subsidiary, Maurices Incorporated to an affiliate of OpCapita LLP as part of its review to enhance shareholder value. The company said, the review includes a comprehensive assessment of its portfolio brands, operations and assets.

Commenting on the development, David Jaffe, the company’s Chairman and Chief Executive Officer said in a statement: "Maurices transaction will strengthen the company’s balance sheet and liquidity, and the ongoing managed services arrangement will serve as a template for offering third-party platform services to others."

OpCapita acquires majority stake in Maurices

The company added that Maurices transaction is valued at approximately 300 million dollars, and the company expects to receive roughly 200 million dollars in cash after expenses, while maintaining a significant minority interest. Cash proceeds from the transaction will be used to pay down the company’s existing term loan balance and/or for reinvestment in the company’s business in accordance with the terms of its credit facilities.

The company further said that Ascena will continue to support the Maurices brand on its shared business services platform through a managed services agreement, including support for IT, supply chain, sourcing and certain back office functions.

“Structural changes in our industry have impacted a number of retailers. We have not been immune to these challenges. In 2016, we initiated our Change for Growth plan, which is on track to deliver run rate cost savings of 300 million dollars to our company by July 2019. We have also identified, and developed plans for, an additional 150 million dollars in savings, which will drive operating margin rate expansion,” added Jaffe.

Picture:Facebook/Maurices

Ascena Retail Group
Maurices