Sweeping changes at the Ascena Retail Group went over well with Wall Street, which pushed the stock up 6.7 percent Wednesday morning to $5.98 on Nasdaq.
The specialty retailer disclosed late Tuesday several organizational shifts and that it restructured its business into four operating segments to cut costs and strengthen the focus on its targeted customer segments.
The changes are part of the company’s new “change for growth” program, which was six months in the planning and formulated in conjunction with Accenture.
The program is also geared “to improve Ascena’s time-to-market, reduce working capital, enhance its ability to serve its customer on any purchasing platform and better leverage the…shared services platform,” the group said.
In addition to the expected $235 million in cost savings associated with integrating Ann Inc., which was purchased by Ascena last year, the company expects to deliver an incremental $100 million to $150 million of cost savings by fiscal 2019.
Under the new structure, Ascena’s financial results will be based on a premium fashion group including Ann Taylor, Loft and Lou & Grey; plus fashion which includes the Lane Bryant and Catherines chains; value fashion, which includes the Maurices and Dressbarn divisions, and kids’ fashion, which includes Justice.
Ascena also created a brand services team, which will assume the responsibilities for its existing centralized shared services group functions, including supply chain, logistics, sourcing and IT, as well as additional brand support functions to be developed through the change for growth program.
Among the organizational changes, Brian Lynch, most recently president and ceo of Justice, will assume direct responsibility for Ascena Brand Services, becoming chief operating officer.
Gary Muto continues as president and ceo of Ann Taylor, Loft and Lou & Grey, which now comprise the premium fashion segment.
Linda Heasley, most recently president and ceo of Lane Bryant, has been appointed president and ceo of the plus fashion segment.
George Goldfarb, most recently president and ceo of Maurices, has been appointed president and ceo of the value fashion segment. Lece Lohr, most recently head of merchandising at Justice, succeeds Lynch as the new president of the kids segment.
The regrouping has led to some executive departures as well.