Lane Bryant owner to be acquired by Ascena Retail for $890 million
The Ascena Retail Group is venturing into the plus-size female market by acquiring Charming Shoppes Inc., parent company of Lane Bryant, for about $890 million.
The purchase will allow Ascena, owner of Dressbarn and teen clothier Justice, to jump into the growing market for bigger-sized women’s apparel. Charming also owns the Catherines Plus Size and Fashion Bug brands.
The Suffern, N.Y.-based Ascena will buy Charming for $7.35 a share, a 25% premium on Tuesday’s closing price. The deal was approved by the boards of both companies and is expected to close by the second quarter of this year.
Ascena said it would use cash and existing financing commitments to fund the purchase. After the deal closes, Charming will become a subsidiary of Ascena.
“Charming Shoppes is a superb strategic fit for Ascena,” Ascena Chief Executive David Jaffe said in a statement. “A key component of our growth strategy over the past several years has been to make highly selective and powerful acquisitions.... We believe that Charming Shoppes will be no exception.”
Based in Bensalem, Pa., Charming operates 1,800 retail stores nationwide, including 82 Lane Bryant and Lane Bryant Outlet stores in California. Ascena operates more than 2,500 Dressbarn, Maurices and Justice stores across the country.
Shares of Charming Shoppes rose $1.40, or 23.8%, to $7.30 in midday trading on Wednesday, while Ascena’s stock climbed $1.99, or 10.4%, to $21.06.
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