Ascena Retail Group Inc., which operates the Dressbarn, Maurices, Catherines, Lane Bryant and Justice brands, posted a 32 percent drop in net earnings for its second quarter ended Jan. 25 and saw softness across all of its brands.
With the weather’s impact continuing right into early March, and particular weakness at the Justice tween chain, Ascena lowered its guidance for the second consecutive quarter and said it would be stepping up efforts to reduce inventories.
“We are implementing promotional strategies and receipt flow adjustments to bring inventory balances back to targeted levels,” said David Jaffe, president and chief executive officer.
The company reduced its guidance for adjusted earnings per diluted share from continuing operations for the fiscal year ending in July, to between $1 to $1.05, compared with $1.25 to $1.30, based on total comparable sales expected to increase in the low single digits, an effective tax rate seen at 36 percent, capital expenditures in the range of $475 million to $500 million and net store growth in the range of 50 to 70 units.
Jaffe was candid about how tough business has been recently, and suggested some uncertainty ahead during a conference call. “Consistent with the overall retail environment, we experienced increasingly challenging conditions, as we closed out the holiday selling period and ended the second quarter.”
Jaffe said Justice has been losing some basics business to big boxes, like Wal-Mart Stores Inc. “Consumers migrated to them just based on price. That’s why we said the core product is struggling. There is significant price sensitivity out there. I would argue it’s not just the tween shopper. We’re seeing it throughout the whole teen segment.”
Differentiating the basics assortment is “a work in progress....By back-to-school, we hope to have addressed that.” The company is also planning additional sales days at Justice and looking to stage new types of promotions. “It’s unclear to me, as much as I would like to be bullish in the spring, whether we have truly come out of the weather funk and whether the economy has improved for consumer discretionary spending, or if we are still on a durable trend.”
On the more positive side, Jaffe said the company is making progress attaining synergies across the divisions to save money and by fall will have one new national retail distribution center serving all divisions. Ascena is also developing an existing facility for e-commerce, which will go live this spring. The later Easter should help spring business, and in warmer climates there has been some better response to seasonal offerings.
In other initiatives, Jaffe cited the partnership with Ruben and Isabel Toledo at Lane Bryant that began with a small holiday collection last year and progresses with a complete collection for spring with a fashion show planned, and added thatthe intention is to announce additional designer collaborations; that the fashion content at Lane Bryant is on the rise with investments in wear-to-work and activewear paying off, and that more targeted email campaigns are in the future. He also cited growing investments in e-commerce to develop an omnichannel experience.
Earnings were $31.9 million versus $47.2 million in the year-ago period, attributed to a profit decline at Justice, the harsh winter and investments in new stores, merchandising strategies, design strategies and e-commerce.
Consolidated e-commerce sales increased 28 percent in the last quarter to $149 million, while consolidated comparable store sales were down 3 percent. Comps at Justice were down 5 percent last quarter. Total sales rose to $1.27 billion from $1.24 billion.
“What he has done at Vuitton is really exceptional,” said @gameofthrones’ actress Gwendoline Christie on @mrkimjones’ final show for @louisvuitton. “He has rebooted luxury in terms of making it commercial, viable and contemporary. And most importantly artistic. He has never compromised his artistic vision for the sake of commodity.” (📷: @zefashioninsider)
After seeing a demand for men’s wear from its customers, British contemporary women’s wear label @ariesarise has added a men’s wear component and will launch a unisex collection with @mrporterlive. The 20-piece collection includes jackets, denim, logo T-shirts and more with deconstructed ‘90s vibes. Set to launch on January 18, you can shop the pieces on Aries’ website and on mrporter.com. #wwdfashion
“And so spending so much time with a character who thinks like that, inevitability you try and analyze yourself and go back and think about your own demons and dark chapters that you had in your life,” says @thedanielbruhl of his role in TNT’s “The Alienist.” The show, set in the Gilded Age of New York, also stars Dakota Fanning and Luke Evans. Head to WWD.com to read about how 39-year-old Brühl prepared for the role and why he thinks the show is so relevant to today #wwdeye ( 📷: @Eriktanner)
Now that Celine Dion’s collection has topped $10 million in sales, the pop superstar, fashion icon and newly-minted industry player is eyeing growth in Asia. Read the full report by @tiffanyap, link in bio. #wwdnews #celinedion
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
Among the familiar faces at @off____white’s show was a surprise figure: Japanese artist @takashipom, pictured here on Wednesday morning. Other show-goers included @jerrylorenzo, who spoke about his upcoming project: a @nike collaboration for back to school, with designs inspired by his childhood on the West Coast. Sitting in the front row were Future, Don Crawley, @miguel and more. See the rest of the photos on WWD.com #wwdeye (📷: Stephane Feugere)
According to @laurentsai, former “Terrace House: Aloha State” cast member, she didn’t know she was auditioning for the Japanese version of “Real World.” “I was telling a couple of my friends and someone’s like, ‘That sounds a lot like Terrace House.’ I was like, ’No it can’t be.’” Turns out, it was. But Tsai isn’t just a reality star — she’s an illustrator who has worked with Starbucks Japan and most recently, she’s dipping her toes into the fashion world. Head to WWD.com to read about her time on the show, modeling and her art. #wwdeye (📷: @danieldorsa)
More changes are coming to New York Fashion Week: Beginning with the spring 2019 collection, @alexanderwangny will move his New York show to June from September, adopting a biannual schedule with collections shown in June and December. Additionally, the @cfda is planning for an official summer/winter fashion season taking place as soon as June and December 2018. Read more about the upcoming changes on WWD.com. #wwdnews #wwdfashion (📷: @slovekinpics)