Ann Taylor parent company Ascena Retail Group has filed for Chapter 11 bankruptcy protection, securing the support of 68% of its secured term lenders. The retailer will close a number of stores after feeling the impact of the coronavirus pandemic.

Through the restructuring, Ascena, which also owns the LOFT, Lane Bryant, Justice and Lou & Grey brands, will reduce about $1 billion in debt as it looks to increase its financial flexibility. The company has secured $150 million term loan to allow it to continue to operate and meet its financial obligations during the bankruptcy protection filing.

The company said its brands will continue to operate, with 95% of its stores open for business amid the coronavirus pandemic. The company temporarily closed all its stores due to the virus back in March.

As part of the restructuring, Ascena will reduce its brick-and-mortar footprint, closing a significant number of Justice stores, a select number of Ann Taylor, LOFT, Lane Bryant and Lou & Grey stores, including all of its stores in Canada, Puerto Rico, and Mexico. The company also will close all of its Catherines locations.

Ascena said total store closures are dependent on lease negotiations with its landlords.

The Catherines brand is slated to be sold to City Chic Collective Limited, which will serve as the stalking horse bidder in a court-supervised auction. The agreement between Ascena and City Chic will allow for a higher bidder during the auction process.

“The meaningful progress we have made driving sustainable growth, improving our operating margins and strengthening our financial foundation has been severely disrupted by the COVID-19 pandemic. As a result, we took a strategic step forward today to protect the future of the business for all of our stakeholders,” Carrie Teffner, interim executive chair of Ascena, said in a statement.

Shares of Ascena were trading at 65 cents as of 9:31 a.m. EDT on Thursday, down 14 cents or 17.7215%.

Ascena LOFT
Ascena Retail Group has filed for bankruptcy protection. A person walks by a closed Ann Taylor store during the coronavirus pandemic on May 3, 2020 in New York City. COVID-19 has spread to most countries around the world, claiming over 248,000 lives and infecting more than 3.5 million people. Getty Images/Rob Kim