Why Fashion Bug Gone Out Of Business and Acquired by Ascena Retail?
The economic downturn that occurred in recent years hit many businesses hard. They experienced a decline in profitability and sales, and found it hard to maintain business as usual for very long. Many corporations were even forced to downsize their workforce, and many of the retailers hit by the down economy were forced to not only downsize their workforce, but they also had to close many of their locations.
Because of the economic decline, some of the hardest hit retailers have been clothing stores. There is story upon story of clothing retailers closing a lot of their locations simply because they’re too expensive to operate. Most retail chains choose to close their underperforming stores first, but some have had to completely go out of business. One of the prime examples of this has been Charming Shoppes, Inc. Charming Shoppes, Inc owns a series of stores that cater to plus-size women, such as Lane Bryant, Catherine’s, and one of the hardest hit, Fashion Bug.
Frankly, it is not hard to understand why stores like this find it hard to stay afloat in the midst of a bad economy. While clothing is a necessity for many, expensive clothing is not. Stores run by Charming Shoppes, Inc were some of the higher end stores. And while the clothing they carried was quality merchandise, they were carrying it at a high premium. When you have a bad economy like the US has had recently, consumers simply cannot afford to spend any additional money on things that just don’t matter. They are only concerned with supplying the necessities for their family; they’re not concerned with purchasing the latest fashion. Yet what is baffling about this scenario is that out of all of the chains that Charming Shoppes, Inc owns, Fashion Bug contains some of the most reasonably priced merchandise.
In 2008, Charming Shoppes, Inc was forced to close 150 underperforming Lane Bryant, Catherine’s, and Fashion Bug stores. They continued by closing another 120 stores in 2010, and another 240 stores in 2011. From that point on Charming Shoppes, Inc could no longer afford to sustain itself and in 2012, and finally Ascena Retail Group Inc. acquired Charming Shoppes for $890 million dollar.
Ascena is currently working on getting rid of parts of Charming Shoppes that it isn’t willing to continue on with. Unfortunately, the Fashion Bug leg of the business is one of the ones that will be eliminated. Ascena will be closing the remaining several hundred Fashion Bug stores for good in 2013, ending an almost 50 year Fashion Bug run in shopping malls throughout the United States.