January 13, 2014, 12:02 PM

Holiday e-commerce sales rise 27% while store sales sag for apparel retailer Ascena

Despite the strong web growth, Ascena Retail Group, which operates the Lane Bryant and Dress Barn apparel brands, among others, reduces its full-year outlook because of disappointing overall holiday results.

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Apart from robust online growth it was a rough holiday shopping season for plus-sized and tween-targeted apparel merchant Ascena Retail Group Inc. Total sales during November and December were lower than expected, the merchant announced today, and Ascena is decreasing its full-year sales projections as a result.

However, online sales were strong during the holidays—up 27%, the retailer says. The company did not report holiday store or web sales in dollars. But those gains were largely offset by weak store sales, Ascena reported. Comparable-store sales dropped 2% compared to the prior year. In total, sales were up 1% during the holidays compared with last year.

“A challenging holiday selling season resulted in increased promotional activity,” says president and CEO David Jaffe. “We successfully cleared excess inventory and have taken the necessary markdowns in the second quarter to transition cleanly into the spring season.”

Here is the breakdown of comparable sales, in which Ascena includes both e-commerce and store sales, by brand during the holidays:

  • Justice: Down 3%
  • Lane Bryant: Up 8%
  • Maurice’s: Flat
  • Dress Barn: Up 1%
  • Catherines: Up 13%

Ascena is lowering its full-year sales outlook by around 13%. For its fiscal year ending July 26, 2014, it’s predicting earnings per share in the range of $1.10 to $1.15, versus previous guidance of $1.25 to $1.30.

This projection assumes low single-digit spring season comparable-store sales and continued double-digit e-commerce sales growth, Ascena says.

The merchant still plans to open 185 stores and close 135 others this year, and to end its fiscal year on July 26, 2014, with around 3,900 stores.

In June 2012, Ascena, which at the time operated the Justice, Dress Barn and Maurice’s women’s apparel brands, acquired Charming Shoppes Inc. in a deal valued at $890 million. Charming Shoppes’ web and store properties included those from women’s plus-sized apparel brands Lane Bryant, Catherines and others.

Ascena did not report fiscal 2012 online sales figures of the combined company until September 2013. As a result, the current edition of the Top 500 Guide, which ranks merchants on their 2012 e-commerce sales, puts Ascena at No. 140 with $160 million in 2012 e-commerce revenue. That’s up 60% from the prior year, according to the data available on Top500Guide.com.

That ranking will go way up when Internet Retailer releases new annual e-commerce data on Top500Guide.com in April, as Ascena has already reported $400 million in fiscal 2013 e-commerce sales— more than double what it posted in 2012 without Charming Shoppes.

Both online jewelry merchant Blue Nile Inc. and web grocer FreshDirect LLC brought in $400 million in online sales in 2012. They rank No. 74 and No. 75, respectively.

 

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