Ascena Retail Group, owner of Ann Taylor, Maurices, Dress Barn and Lane Bryant did not have happy holiday season as the retailer reported discouraging sales on Tuesday.
“We were disappointed by our overall holiday performance” Ascena’s President and CEO David Jaffe said in a statement. Investors too seemed disheartened shares fell as much as 10% on Tuesday. While part of the decline can be attributed to less than expected demand, pessimistic attitudes due to the Presidential election, and bad weather, the numbers don’t add up.
The Chief executive expects this dip to continue, as part of challenging trends for the specialty apparel industry, “We were forced into a more highly promotional stance in order to move through inventory in the face of softer overall consumer demand. At this juncture, we are positioning our full year outlook assuming that the trend we experienced through holiday continues.” The company resorted to discounting to help its appeal, and this helped offset some of the decline towards an expected Q2 loss of between 11 cents and 8 cents per share. The trend is problematic, as in September its shares came close to a 7.5 year low and ended the year with a comparably 9% lower inventory value then it had at the Q1 beginning go 2016.
Common consensus is that the industry is right now over-stored and the winners so far have been those who have been able to innovate or capture the discount prices trend.