The Ascena Retail Group Inc. has promoted Gary Muto to the new position of president and chief executive officer of Ascena Brands in an effort to reverse disappointing top-line performance across the portfolio and speed decision-making.
Muto was president and ceo of Ascena’s premium fashion group, which includes Ann Taylor, Loft and Lou & Grey.
Ascena, which also operates Lane Bryant, Justice, Maurices and Dress Barn, had an operating loss of $1.31 billion for its fiscal third quarter ended April 29, with net sales down 7 percent and comparable-store sales down 8 percent. None of the company’s brands posted positive sales growth. The loss related largely to a $1.3 billion impairment charge related to a writedown of “goodwill and other intangible assets” as well as store traffic declines and intense promotional activity.
The company plans to close up to 275 locations of Dress Barn and tween-focused retailer Justice, and could decide to sell off a division.
Muto will be responsible for “reinvigorating and driving top-line growth across Ascena’s full brand portfolio.” He will continue to lead the company’s premium fashion segment, which includes Ann Taylor and Loft, and will also provide strategic direction and leadership for the plus, value and kids fashion segments, the company said.
In addition, Brian Lynch has been elevated to president and chief operating officer of the Ascena Retail Group. The company said Lynch “will continue to have responsibility for the company’s operating platform and infrastructure, and will remain focused on the development and delivery of top-tier enterprise capabilities in supply chain, technology, product sourcing, real estate and non-merchandise procurement in support of the company’s brand portfolio.”
Muto and Lynch continue to report to David Jaffe, Ascena’s chairman and ceo.
Last year, Jaffe disclosed the company’s far-reaching “change for growth” transformation program involving regrouping the divisions to try to achieve sharper customer focus, as well as some top-level management changes, and expected cost savings.
On Tuesday, Jaffe said he’s confident the program will deliver or exceed the expected $250 million to $300 million in cost savings targeted through fiscal 2019, and that the company is “now turning to the ‘growth’ piece of our transformation.”
Jaffe continued, “Our new executive management structure will enable faster decision-making, accelerate implementation of company-wide initiatives, and foster greater accountability. Our segment teams will benefit from Gary’s deep knowledge of fashion merchandising, customer experience and brand management as they work to reinvigorate and drive growth at our brands. And the continued maturity of our shared services platform under Brian’s leadership will enable our brands to meet evolving customer expectations and drive enterprise value.”
Jaffe said the new management structure involving Muto and Lynch “will allow me to increasingly focus my efforts on strategic growth initiatives.”
He also said the company is searching for a new senior executive for developing strategic opportunities.