CEO of Charming's new owner plans to keep jobs

CHARM04. headshot of Ascena Retail Group Inc. president and chief executive officer David Jaffe.IT ACCOMPANIES A DAILY SLUGGED IN SAXOTECH: CHARM04. For Business News.
CHARM04. headshot of Ascena Retail Group Inc. president and chief executive officer David Jaffe.IT ACCOMPANIES A DAILY SLUGGED IN SAXOTECH: CHARM04. For Business News.
Posted: July 05, 2012

The chief executive of Ascena Retail Group Inc. said Tuesday a plan was in place to preserve jobs of 7,500 employees at soon-to-be-shuttered Fashion Bug stores, as well as among 600 workers at the former Philadelphia-area headquarters of Charming Shoppes Inc., after Ascena acquired one of the region's few remaining apparel companies.

The Suffern, N.Y.-based owner of Dressbarn, Justice and Maurices stores is committed for at least three years to the Bensalem facility that housed executive and administrative offices for Charming Shoppes. It intends to consider Fashion Bug employees for placement at new stores that may replace some of those closing, president and CEO David Jaffe said in an Inquirer interview.

With Lane Bryant, Fashion Bug and Catherines brands also under the Ascena umbrella as a result of the $900 million deal that closed June 15, and with Ascena's order to shut all 600 Fashion Bug locations by early 2013, new retail positions could emerge if Ascena were to open other stores at the shopping-center locations going dark, Jaffe said.

"What we have is a plan in place to engage these associates with job postings as well as an interview process that can get them in front of the other brands," Jaffe said.

Ascena intends to eliminate duplication in back-office jobs that are handled both at its Suffern headquarters and at the two-building complex in Bucks County the company inherited from Charming Shoppes (one building is owned, the other leased). Such jobs would include posts related to legal, accounting, human resources and purchasing functions.

Jaffe said he had "no idea" how many jobs, if any, might be lost in Bensalem, but he strongly suggested as few as none would disappear, based on what happened with past Ascena acquisitions.

"We're not focused on eliminating jobs. We're focused on running the business as effectively as we can," Jaffe said.

Despite the elimination of Fashion Bug, there will be five big retail brands to run: "With this growth comes the need for more people," he said.

Ascena, which originated from the Dressbarn chain founded in 1962 by Jaffe's mother, Roslyn Jaffe, has grown substantially in recent years. It has pursued a strategy of expanding its total number of stores while supporting them with a streamlined administrative apparatus. The goal: higher profits for each chain.

In November 2010, publicly traded Ascena acquired the mall-based retailer Justice, which targets "tweens" aged 7 to 12. In January 2005, it purchased Maurices, which caters to women seeking a younger fashion look.

"As we can develop economy of scale, we've been able to improve our operating margins at both Maurices and Justice," Jaffe said.

The efficiencies have come without big job cuts, he added.

"When we merged with Maurices we said that there would be no firings and there weren't any because the growth was so significant," Jaffe said. "With Justice, ... I think the total number of terminations was less than 10."

Inevitably, there will be "some displacement" as the profit-laggard Fashion Bug chain is shut down, he said, but added: "We've already conducted interviews with some of the executives trying to place them with the other brands."

Charming Shoppes was sold after the struggling retailer, under pressure from investors and after several tumultuous years that included the ouster of a CEO, began looking for a buyer late last year. Ascena became the front-runner among several other interested parties after competing suitors' offers came up well short, said longtime Ascena chief financial officer Armand Correia.

What most piqued Ascena's interest: Lane Bryant, the plus-size specialty chain store acquired years ago by Charming Shoppes and whose headquarters are — and will remain — in Columbus, Ohio.

"They are a crown jewel," Correia said. "The whole acquisition was about Lane Bryant."

Ascena had been in the plus-size apparel market through Dressbarn, where the vast majority of its clothes are designed and manufactured for Dressbarn stores and a full range of sizes is available for women. Plus-size clothing also is available at Maurices.

Lane Bryant and its in-house Cacique lingerie brand were alluring both to plus-size shoppers and to Ascena executives, who, with ample capital available, have been eager to grow their holdings, he said.

"We think the Lane Bryant name is iconic," Jaffe said. Despite the abundance of plus-size merchandise at big-box competitors and department stores, Ascena found that Lane Bryant stood out in shoppers' minds.

"When we did our consumer research prior to the acquisition, we spoke to dozens of women," Jaffe said, "and all of them said Lane Bryant is their go-to store."

The combined company, excluding Fashion Bug, will consist of 3,800 stores across the United States, Puerto Rico and Canada. The Figi's gifts brand, also owned by Charming Shoppes, will be sold off by Ascena in the short term.

Contact Maria Panaritis at 215-854-2431 or mpanaritis@phillynews.com or on Twitter @panaritism. Read her past columns at www.philly.com/MariaP

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