Ascena Retail Group to buy Lane Bryant parent for $890 million
Ascena Retail Group Inc. is venturing into the plus-size women’s clothing market by acquiring Charming Shoppes Inc., parent company of Lane Bryant, for about $890 million.
The purchase will allow Ascena, the Suffern, N.Y., company that owns Dressbarn and teen clothier Justice, to jump into the growing market for bigger-size women’s apparel. Charming also owns the Catherines Plus Sizes and Fashion Bug brands.
Ascena will buy Charming for $7.35 a share, a 25% premium over Tuesday’s closing price. The deal was approved by the boards of both companies and is expected to close during the second quarter.
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 $1.41, or 23.9%, to $7.31 in trading Wednesday, while Ascena’s stock climbed $1.98, or 10.4%, to $21.06.
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