American women’s clothing retailer ascena retail group has agreed to sell a majority interest in its subsidiary Maurices to British private equity firm OpCapita’s affiliate for approximately $300m.
The deal is part of a review, conducted by the company’s management and board of directors, in a bid to enhance shareholder value.
Post expenses, ascena retail expects to receive roughly $200m in cash and will continue to hold a significant minority interest in Maurices following the transaction.
ascena retail group chair and CEO David Jaffe said: “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 $300m to our company by July 2019. We have also identified, and developed plans for, an additional $150m in savings, which will drive operating margin rate expansion.
“These efforts are expected to deliver a leaner operating model and enhanced competitive capabilities, but we must do more. To create value for our shareholders, we are planning deliberate actions to generate more profitable growth from those brands and operations in our portfolio that we believe have greater long term potential.”
Under a managed services agreement, ascena will support the IT, supply chain, sourcing and certain back office functions the of Maurice brand, through its shared business services platform.
The transaction is expected to close by early summer, subject to customary closing conditions.
Maurices currently operates 1,000 stores across North America offering a range of women’s fashion from brands, such as dressbarn, Justice, Catherines, Lane Bryant, Ann Taylor, LOFT and Lou & Grey.