maurices operator acquires Lane Bryant parent
May 2, 2012
Associated Press via Duluth News Tribune
The parent company of Duluth-based maurices is buying Charming Shoppes Inc., owner of Lane Bryant, for about $890 million.
The move gives Ascena Retail Group access to the large-size women’s clothing market. Charming also runs Fashion Bug, Catherines Plus Sizes and the direct marketing business Figi’s. Ascena, owner of the maurices, Dressbarn and Justice brands, will pay $7.35 for each Charming share, a 25 percent premium to Charming’s closing price of $5.90 Tuesday.
“This is an exciting day for Ascena, maurices, our sister brands and for Charming Shoppes,” said George Goldfarb, president of maurices, in a statement Tuesday. “We are very pleased to have another strong retail company join the family. They are a key player in the ever-growing plus size apparel market.
Shares of Charming Shoppes jumped $1.39, or 23.6 percent, to $7.29 in afternoon trading, while Ascena’s stock gained $2.13, or 11.2 percent, to $21.21.
Charming Shoppes launched a strategic and financial company review in December. At the time the company said it hoped to sell its Fashion Bug operations so it could concentrate on Lane Bryant stores, which offer women’s clothing in sizes 14 through 28. It did not mention an outright sale of the company at the time, although a strategic review is often corporate jargon for putting a company up for sale.
Ascena said it will use available cash and existing financing commitments to fund the acquisition.
The deal is likely to be neutral or will add a little to earnings in the first full year of combined operations, Ascena said, and should add increasingly to net income totals after that.
The boards of both companies unanimously approved the acquisition. It is expected to close during the second quarter.
Once the transaction closes, Charming will become a subsidiary of Ascena Retail Group Inc.
Charming, based in Bensalem, Pa., runs more than 1,800 stores nationwide. All told, Ascena operates more than 2,500 stores in the U.S., Puerto Rico and Canada. Its Dressbarn and maurices stores offer clothing for young and older women, while Justice caters to girls ages 7 to 14.
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