Women’s fashion retailer Ascena Retail Group (NASDAQ:ASNA) will acquire Charming Shoppes (NASDAQ:CHRS), owner of Lane Bryant, Catherines Plus Sizes and Fashion Bug, for about $890 million. The buyout will give Ascena a stronger foothold in the plus-size fashion arena.
Ascena, the parent company of dressbarn, maurices and Justice brands, announced Tuesday that it will pay $7.35 for each Charming share — about a 25% premium to Charming’s closing price of $5.90.
“Charming Shoppes is a superb strategic fit for Ascena,” Ascena President and CEO David Jaffe said in a press release. “A key component of our growth strategy over the past several years has been to make highly selective and powerful acquisitions.”
The deal, which is expected to close in about 10 days, could slightly bolster earnings in the first complete year of joint operations. Ascena anticipates profits to rise in subsequent years.
The sales process began in December after Charming announced its intentions to sell its floundering Fashion Bug line. Out of the three Charming stores, Lane Bryant — which offers women’s apparel in sizes 14 through 28 — holds the most successful sales results.
Also included in the deal is Charming’s direct marketing business, Figi’s.