Ascena Retail Group's Revenue Jumps To $4.7 Billion
By Anna Rose Welch, Editorial & Community Director, Advancing RNA
Acquisitions and online presence key to company’s financial success
Ascena Retail Group reported that it generated $4.7 billion in revenue for the fiscal year ending in July. In Q4 alone, the company reported net sales growth of 27 percent to $1.2 billion, an increase from Q4 2012, which reported $940 million. Consolidated comparable store sales (excluding e-commerce) increased 2 percent. The company also saw increases in e-commerce sales, achieving $103 million on a consolidated basis — an increase of 81 percent — and a 30 percent increase on a comparable basis. Combined comparable store and e-commerce sales increased by 4 percent. In addition to growth in store sales, the impressive increase in e-commerce sales for the year speaks to the company’s burgeoning online presence and hints at the company’s success in attempting to become an omni-channel retailer.
Sales growth from this quarter is attributed to the inclusion of Lane Bryant and Catherine’s stores, Ascena’s most recent acquisition, which was finalized in June 2012. According to CEO and Ascena Retail Group president, David Jaffe, the merger with Charming Shoppes was a natural move for both companies. He notes that the Lane Bryant and Catherine’s stores were “extremely complimentary to [Ascena’s] other concepts.” Jaffe also said he felt the acquisition would make Ascena significantly more competitive and would enable the company to capture efficiencies, share resources, and streamline overall business. Judging from the successes revealed in the Q4 results, it would appear Jaffe was correct in his assertions that this acquisition would strengthen overall business.
Maintaining Focus On Brand Identity
In fact, Ascena has an impressive history with acquisitions. Originally located in Stamford, CT, the company was known primarily as Dress Barn. However, today, the brand is headquartered in Suffern, NY and operates more than 3,859 Dress Barn, Catherine’s, Maurices, Cacique, and Lane Bryant stores. Ascena has also seen strong sales in the Justice and Brothers brands marketed to tween-girls and boys. Regardless of the acquisitions, each acquired company still maintains its own separate headquarters location and has managed to maintain its own distinct brand identity.
Over the past year, the company has continued to ensure that each of its brands remains strong in the tide of changing consumer preferences. The company recently remodeled Dress Barn stores, improved operational efficiency, quality, and fashion in the face of rising consumer apathy towards the brand. Ascena also relocated Dress Barn’s distribution center to a state-of-the art facility in Justice, OH, created a new merchandizing and allocation system, and lowered the number of company distribution centers from five to two. In the future, the retailer plans to consolidate its back office and open a central data and fulfillment center, which will only heighten the retailer’s knowledge of its customer base.
Maintaining Growth In A Slow Economy
Jaffe says in the group’s press release highlighting the Q4 and Fiscal Year 2013 Results that, despite growth, the company plans to enter fiscal 2014 cautiously. Jaffe says, “We expect macro-economic factors to continue to pressure the apparel industry. In light of that, we have taken a conservative approach to how we are planning Fall.” Regardless of these pressures, Jaffe assures investors that the company is determined to “achieve long range synergy targets” and promote long-term growth by building infrastructure and adding “strong new talent.” Considering the company’s successful history with acquisitions and the impressive increase in e-commerce sales, the company appears to be in a sound place to continue seamless growth and customer service.
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