- Prachi Singh
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Ascena Retail Group, Inc. has signed a definitive agreement to sell a
majority interest in its subsidiary, Maurices Incorporated to an affiliate
of OpCapita LLP as part of its review to enhance shareholder value. The
company said, the review includes a comprehensive assessment of its
portfolio brands, operations and assets.
Commenting on the development, David Jaffe, the company’s Chairman and
Chief Executive Officer said in a statement: “Maurices transaction will
strengthen the company’s balance sheet and liquidity, and the ongoing
managed services arrangement will serve as a template for offering
third-party platform services to others.”
OpCapita acquires majority stake in Maurices
The company added that Maurices transaction is valued at
approximately 300 million dollars, and the company expects to receive
roughly 200 million dollars in cash after expenses, while maintaining a
significant minority interest. Cash proceeds from the transaction will be
used to pay down the company’s existing term loan balance and/or for
reinvestment in the company’s business in accordance with the terms of its
credit facilities.
The company further said that Ascena will continue to support the
Maurices brand on its shared business services platform through a managed
services agreement, including support for IT, supply chain, sourcing and
certain back office functions.
“Structural changes in our industry have impacted a number of retailers.
We have not been immune to these challenges. In 2016, we initiated
our Change for Growth plan, which is on track to deliver run rate cost
savings of 300 million dollars to our company by July 2019. We have also
identified, and developed plans for, an additional 150 million dollars in
savings, which will drive operating margin rate expansion,” added Jaffe.
Picture:Facebook/Maurices
