With a base purchase offer of $40.8 million for plus-size brand Catherines, plus apparel conglomerate FullBeauty emerged as the winner Wednesday at the Ascena brand's bankruptcy auction.
The winning bid more than doubles the August $16 million stalking horse bid from City Chic. That plus e-retailer is now the back-up bidder, with a $39.9 million offer, according to court documents filed in the U.S. Bankruptcy Court For The Eastern District Of Virginia in Richmond.
Ascena also notified the court this week that it will permanently close 23 more stores run by its Justice tween apparel brand, according to another court document.
While Catherines doesn't enjoy the fandom heaped upon Ascena's other plus brand, Lane Bryant, the banner does have a loyal following.
But anyone playing in this apparel segment faces higher expectations from customers, who increasingly have more options as mainstream retailers expand their size ranges and as online pure plays enter the space.
"There are now so many retailers with inclusive sizing — even Victoria's Secret," Jane Hali, CEO of investment research firm Jane Hali & Associates, said in an email. "I believe that if these plus size retailers are not spot on with the trends the customer can go elsewhere. I also believe that in the age of Covid and e-com shopping, loyalty is really up for the taking."
Catherines' customer base is also relatively older, a cohort less interested these days in buying clothes, according to Hali. "I understand loyalty to a store that satisfies your needs," she said. "Catherines appeals, in my opinion, to a baby boom audience, which is risky. Lane Bryant is younger."
As difficult as it may be to sell apparel online, e-commerce is making it easier for people to find the fashion they're looking for. That has challenged not just plus, but also the tween market, where even quite young children are influenced by social media, according to Hali. Ascena earlier this year took steps to close a significant number of mostly mall-based Justice stores after sales began falling at the once-thriving childrenswear brand.
"Justice was the only one doing well [for Ascena], but again e-commerce has made it an equal playing field," Hali said. "My granddaughter is 8 and she would be a possible Justice customer. Her favorite store is Zara kids. It is very much on trend, and with the amount of social media they see — Justice is not fitting the bill. She was speaking to me the other day about the Hailey Baldwin look."
FullBeauty took its own whirlwind, 24-hour spin in and out of bankruptcy last year and is now owned by Apax Partners and Charlesbank Capital Partners. The company specializes in plus and runs men's, women's and home brands, including Woman Within, Roaman's, Jessica London, Ellos, Swimsuits For All, KingSize, Brylane Home and online marketplace fullbeauty.com.