NEW YORK--(BUSINESS WIRE)--Ascena Retail Group, Inc. (Ascena) filed for Chapter 11 bankruptcy in late July, in a move to reduce debt obligations by almost $1 billion as well as to shutter underperforming locations. The fast-fashion retailer is considering the closure of upwards of 1,600 of its 2,733 locations and has so far filed motions to reject 1,280 leases.
Once the biggest national retailer of women’s and girls’ clothing, Ascena brands’ market share has been threatened by both new and existing competitors. Ongoing financial pressures were exacerbated by temporary store closures and supply chain disruptions prompted by containment and mitigation measures in response to the coronavirus (COVID-19) pandemic. The retailer owns several well-known apparel brands such as Ann Taylor, Catherines, Justice, LOFT, Lane Bryant, and Lou & Grey with brick-and-mortar footprints in malls, outlets, and shopping centers across the U.S. Ascena operated the Dressbarn and Maurices brands, which it sold last year.
KBRA Credit Profile (KCP) examined its $700 billion coverage universe of over 1,100 CMBS transactions and identified 529 properties collateralizing 472 loans—$54.77 billion by allocated loan amount—across 399 transactions with exposure to an Ascena location. Approximately 21% ($11.37 billion) of the loans were delinquent as of August 2020 and 24% ($13.3 billion) was with the special servicer. KCP will continue to monitor ongoing developments related to Ascena and its affiliated retail brands and will report on potential consequences for CMBS collateral within its monthly KCP report for each transaction.
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KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) with the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA. Kroll Bond Rating Agency Europe Limited is located at 6-8 College Green, Dublin 2, Ireland.
