Court approves sale of DressBarn parent company to private equity firm: WSJ

Ascena Retail Group Inc. has won court approval to sell its Ann Taylor, Lane Bryant, Loft and Lou & Grey retail brands out of bankruptcy to private-equity firm Sycamore Partners in a deal valued at about $1 billion.

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Judge Kevin Huennekens of the U.S. Bankruptcy Court in Richmond, Va., said Tuesday he would approve the sale of the majority of Ascena’s remaining assets to Sycamore Partners. The private-equity firm, which specializes in retail and consumer investments, had agreed last month to a purchase price of $540 million, subject to certain adjustments, the assumption of some liabilities and other terms.

“This is a pretty marvelous transaction and I just wanted to applaud all of you for putting this together and getting this done,” Judge Huennekens said during a hearing Tuesday held by phone and video.

The deal, which could close by next week, will preserve the business as a going concern with at least 900 stores. As of late August, Ascena operated 1,500 retail locations throughout the U.S., down from its previous roughly 2,800 stores.

“The business will be owned by a sophisticated retail investor with a track record of maximizing value in this space, where others have found it challenging,” said Steven Serajeddini, a lawyer representing Ascena, during the hearing. “We are very thrilled with the result.”

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The approval of the sale came despite the Justice Department’s Office of the U.S. Trustee, the federal government’s bankruptcy watchdog, raising objections during the hearing about the quick sale to Sycamore without a bidding process or bankruptcy auction. The U.S. trustee argued that bankruptcy rules required at least 21 days of notice to creditors and others about the sale of the assets, instead of the 12-day notice provided by Ascena.

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