In response to the rapidly evolving retail environment, Ascena Retail Group, leading retailer of apparel for women, has announced updated third quarter and fiscal year 2017 guidance. It expects comparable sales to be down 8 per cent in the quarter, while for full year, it would down 7 per cent.
David Jaffe, President and CEO, commented, “Industry-wide traffic headwinds and a highly elevated promotional environment have persisted at levels significantly above our expectations, resulting in a miss to our third quarter sales and earnings outlook. We have adjusted our second-half outlook to reflect this environment and limited near term visibility, and no longer believe it appropriate to expect a stabilization of traffic and resulting normalization of comp sales against softer demand in the year-ago period.”
The company said in a release issued that after several years of investments, Ascena has developed a highly capable supply chain and distribution network, designed to address the fundamental changes in the specialty retail sector. It believes operating conditions in the sector are likely to remain challenging for next 12 to 24 months. However, the retailer is confident that its comprehensive enterprise transformation, financial strength, and highly capable operational platform will help them emerge in a position to compete effectively on a sustained basis as a true omni-channel retailer in the sluggish yet competitive market, supported by its mix of relevant owned brands and deep customer relationships.
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Jaffe further informed in a statement released that the implementation of the company’s Change for Growth enterprise transformation programme is well underway, and they are aggressively accelerating and amplifying their transformation to ensure the retailer emerges from this period of industry disruption as a stronger, more agile company.
These measures, coupled with an extended structural cost reduction scope, are now expected to deliver US $ 250-300 million in cost savings as compared to the company’s prior US $ 150 million target.
