Ascena: Odds of Survival in Specialty Retail

Posted: January 4th, 2023

Student’s Name

Tutor’s Name

Course Title

Date

Ascena: Odds of Survival in Specialty Retail

The origins of Ascena are in the early 1960s, when only a few wear-to-work dresses and other clothing alternatives existed for women entering the job market. The gap pushed Roslyn Jaffe and her spouse Eliot to establish the initial Dress Barn in Connecticut. The company had developed by the 1980s and operated nearly 200 stores across the U.S. by 1985. Dress Barn changed its name to Ascena Retail Group in 2011 and received the chance to expand its operations using acquisitions as a corporate strategy. It has realized considerable growth and stability through its use of acquisitions as a corporate strategy but must still address possible constraints affecting its use of the business model.

Diversity

Ascena realizes the importance of diversifying its practices to fit into the retail sector, where other operators constantly develop strategies to stay afloat. The company pursues diversification by acquiring other firms to enter into their market niche. For example, acquiring ANN would allow it to attract the busy and socially upscale women aged 25 to 55. The addition of Premium Fashion ANN brands would push the company’s portfolio to the Total Value Fashion, which mostly sells the Dressbarn and Maurices brands, Total Plus Fashion that deals with the Lane Bryant and Catherine’s brands, and Total Kids Fashion that targets 6 to 12-year old girls through the fashionable Justice brand. The diversification offered Ascena a proper chance in 2017 to steadily place itself to serve the market requirements for girls and women from numerous consumer sectors. The acquisition of Maurices in 2005 and Justice in 2009 by the then Dress Barn was a result of the increased diversification trend at the beginning of the 21^th century, and the company hopes that the strategy would provide it with an opportunity to serve a wider consumer base.

Acquisitions

Ascena identified a paradigm shift in the retail sector and knew that the operational transformations needed to restructure to become prosperous are comprehensive and intricate. Over the years, it has put substantial investments in operational repositioning and acquisitions. Consequently, the group has achieved considerable growth due to these investments. The acquisition of ANN in 2015 made Ascena the largest specialty retailer in the United States, focusing entirely on women and girls. The acquisition of ANN implies that Ascena had widened its brand profile across many multiple segments and run more than 4,900 stores with annual projected sales of more than 7 billion USD. The acquisition offered the business a chance to retail ANN’s Lou & Grey, LOFT, and Ann Taylor. Earlier in 2012, Ascena had acquired Charming Shoppes adding the Catherine’s plus-size and Land Bryant to its portfolio, and the move offered the company more stability in the market. The group experienced some pitfalls from its acquisition practices, which had considerable impact on its activities. One of these challenges is the group had more stores than it could manage following the acquisition of ANN. The problem stalled sells in some stores, which affected revenue generation.

Ascena’s Corporate Strategy

Ascena seems to rely on the acquisitions that it makes as a leading strategy used to gain competitive advantage in the apparel retail sector. It is apparent that despite the challenges, the company is doing well in executing the corporate strategy. Each time when it acquires the operations of another company, it obtains the chance to improve its own operations and market share, which proves that the corporate strategy is properly selected. Ascena tries to move away from the original seven one billion USD firms into ONE seven billion USD through the joint scale, effort, and strength that follows a successful acquisition. For example, it is its hope that the acquisition of ANN would change the organization through standardization, centralization, and use of more effective practices and methodologies. The corporate strategy works for Ascena because it can explore the premium women’s fashion market. Furthermore, the fact that Ascena manages to boost its overall revenue, mainly through acquisitions, indicates that the company is successful in its implementation of acquisitions as a corporate strategy. 

Recommendations

Ascena must take suitable measures to remain competitive in the retail sector. One of the suitable ways of improving its corporate strategy is to emulate other firms that perform well using the approach. The company would be in a proper position to reach buyers using technology bearing in mind that the group manages numerous stores, some of which may not reach a number of buyers because of their location and other restrictive factors. Soon after Gap took over the operations of Intermix, the group saw the need to create a virtual display area for wedding attire, where buyers would view the clothing online, discuss their specific features via social media platforms, and choose their appropriate store to try and purchase their favorite choices. Embracing superior technology will not only allow Ascena to fit into the new retail business framework but also offer personalization and the opportunity for younger consumers to browse, order, and purchase across integrated networks. Fortunately, the group understands the effects of technology and invests considerably into technological platforms to enhance the growth of its omni-channel model. The company, while emulating other organizations that appear to head towards the right direction with their acquisition of other firms, should make the right decisions to avoid the blunders that usually disrupt the activities of many companies that consider mergers and acquisitions (M&As) as a suitable corporate strategy.

The other suitable option of recording beneficial outcome with the business strategy is training the staff members on how to make suitable business decisions, especially when not everything agrees with the initial plan. The trainees should gain more information regarding the most effective ways to diversify the business operations and should acquire information on how to predict the possible impact of a merger or an acquisition. Training the employees equips them with the knowledge and skills that would eradicate possible threats or limitations that may hinder the company from making suitable steps or achieving its goals and objectives.

Conclusion

The case study focuses on Ascena, which tries to gain a competitive advantage by acquiring the operations of other companies but must deal with several issues while relying on the strategy. The acquisitions of other operators give Ascena an opportunity to diversify its operations because it has the chance to offer a wide range of products to its consumers. The company appears to be on the right tract in its handling of the acquisition processes, but the group must deal with several challenges that are associated with taking such corporate strategy. Ascena can improve on its implementation of the corporate strategy by emulating other companies in the sector that achieve successful outcome from applying the approach. It should also train some of its employees to equip them with advanced skills on how to manage acquisitions.