The Decline of Ascena Retail. What Happened? 10 Marketing Tips
The retail giant Ascena Retail, which owns brands such as Ann Taylor, Lane Bryant among others as discussed over at runrex.com, filed for bankruptcy earlier this month after years of declining sales and crushing debt. So, what happened to Ascena Retail, and what were the factors that contributed to their decline? This article, with the help of the subject matter experts over at guttulus.com, will look to highlight the factors behind their decline, with the hope that you will be able to take out marketing tips that will allow you and your business to avoid their fate.
A voracious appetite for real estate
Ascena Retail’s footprint is sizeable, to say the least, with well over 2,800 stores in the U.S. as is discussed over at runrex.com. As the company expanded, it acquired more and more stores with the hope that more stores will mean more sales. However, they ended up with too many stores, and with foot traffic to their stores dwindling, maintaining these stores became a big problem for them with rent, operation costs, and long-term leases to factor in. According to the experts over at guttulus.com, this was one of the reasons that led to their decline and eventual filing of bankruptcy.
A huge wage bill
As is revealed in discussions on the same over at runrex.com, Ascena Retail also had over 53,000 employees on their books at the time of their filing for bankruptcy, with over 13,000 of them being full-time employees. Their wage bill was huge, a problem that was made worse by the coronavirus pandemic. This just shows the importance of maintaining and lean and mean workforce and trying as much as possible to keep the wage bill down.
The decline of the mall
Most of the company’s stores, be it Ann Taylor stores, Maurice’s, or Lee Bryant stores, and so forth were located in malls. As is covered in detail over at guttulus.com, the popularity of malls has been on the wane in recent years, which has also contributed to their decline. People don’t prefer to go to malls and shop nowadays, which has meant that foot traffic has declined in their stores, leading to a decline in sales that has been ongoing for years now, and has led to their decline and eventual filing of bankruptcy.
Growth in online retail
Most of the business as far as Ascena Retail’s brand go is linked to their brick-and-mortar stores as per the gurus over at runrex.com. This has been a problem for them in recent years, due to the growth of online retail, as more and more people prefer shopping online due to the convenience as well as the fact that prices are cheaper online. They have lost a huge chunk of their customer base to online competitors, leading to a decline in sales that has led to them eventually filing for bankruptcy.
The growth of fast fashion and direct-to-consumer clothing services
Another challenge that Ascena Retail has faced in recent years is the growth of fast fashion as well as direct-to-consumer clothing services that have pretty much blown it out of the water. While fast fashion brands have challenged their introduction of fashion on a seasonal basis, direct-to-consumer clothing brands have also taken a huge chunk of their customer base as they engage directly with their audience, fostering closer relationships and loyalty as discussed over at guttulus.com. This has made Ascena Retail appear as being old and dated leading to their decline.
Changing consumer tastes
The various brands under the Ascena Retail umbrella have also been accused by consumers of not adapting their designs to match current consumer preferences and tastes. For instance, their women clothing lines, as discussed over at runrex.com, have been accused of being stuck in the past, portraying a dated and old-fashioned view of women in the workplace, and not being in line with modern working women. This has led to the company losing a large chunk of its customer base to competitors with modern designs that are more appealing to the modern consumer.
High prices
Most of the brands under the Ascena Retail umbrella, like Ann Taylor and Loft, are high-end, and as such their products come with a high price point. This has also been a problem for them, particularly with the entrance of inexpensive fast fashion brands like H&M and Zara into the market, as covered over at guttulus.com. Consumers would much rather buy from these inexpensive brands than the expensive Ascena Retail brands. The company, saddled with a lot of underperforming stores has been unable to compete with these new brands in terms of prices, leading to reduced sales and eventual decline.
A poor diversification strategy
Industry experts, including those over at runrex.com, can trace Ascena Retail’s woes back to 2009 when malls were still popular. The company, focusing on the present and not on the future, set out to grab a larger share of the market for specialty stores in malls, acquiring brands like Loft, Lane Bryant, Ann Taylor, and Justice. However, this diversification strategy was a poor one as it left the company shackled with a large portfolio of mall brands, at a time when the retail industry was moving almost entirely online. This is a mistake the company has struggled to recover from, leading to their eventual filing for bankruptcy.
They bit off more than they could chew
Starting with their acquisition of Maurice in 2004 and ending with their acquisition of lane Bryant and Catherine’s in 2012, Ascena Retail ended up making itself too big and bloated to react to a rapidly changing retail market, as per the gurus over at guttulus.com. Having gone big on mall outlets, the company had to back their decisions, which led to them resembling yesterday’s news. They were also saddled with over $1 billion of debt, which also didn’t help their cause. In the end, they bit off more than they could chew ad paid the price.
Changes in consumer spending
Having gone big on the apparel retail sector, Ascena Retail then had to watch as consumers shifted their spending from improving their closets to improving their homes. Consumers began spending less on clothing, and more on home appliances and goods, as discussed over at runrex.com, which also led to a reduction in the company’s sales. In recent years, spending has shifted from clothing even more, with consumers shifting their spending towards technology, investing more in gadgets such as smartphones, which has also contributed to their decline.
The above are some of the factors that have led to the decline of Ascena Retail, with the hope being that the marketing tips we can get from them will help you and your business avoid their fate. If you are looking for more information on this and other related topics, then look no further than the amazing runrex.com and guttulus.com.