2013 has been an evolutionary year for
our business.
We made significant progress in a number
of areas, particularly with respect to the
integration of our acquisition of
the Charming Shoppes businesses.
We have embarked on a transformation
of our operating platform. This is a
wide-ranging effort designed to create
a strong shared services platform that
centralizes our operations, unlocks
synergy and efficiency, improves our
financial performance and positions us for
continued growth and value creation.
Over the past year, we’ve continued to
build an experienced executive team that
will achieve our vision. Key hires have
included Dirk Montgomery, who joined
us as our new Chief Financial Officer
in January, and Linda Heasley, our new
CEO of Lane Bryant, who will help us
write the next chapter for that brand. We
have attracted talent for key positions
across the company, including new senior
merchandising leaders. This is a world-
class team with high aspirations and
expectations.
“WE KNOW THAT THE PATH TO CREATING VALUE FOR OUR SHAREHOLDERS IS BY CREATING VALUE FOR OUR CUSTOMERS. ACROSS ALMOST 4,000 STORES, OUR NEARLY 50,000 ASSOCIATES KNOW THAT CUSTOMERSERVICE MAKES THEDIFFERENCE.” Our fiscal 2013 results, particularly in the early part of the year,
reflect the transition in the business, including our pre-integration
cost structure and some merchandising challenges at Lane Bryant
and dressbarn. We finished the year with operational strength
and performed well relative to our expectations in a challenging
environment.
For the full year, our consolidated comparable sales performance
was up 2%, which includes combined store and e-commerce sales.
Our income from continuing operations decreased by 10% to $155
million, or $.95 per share on a diluted basis. The decline in income
from operations was primarily driven by transaction, financing and
integration-related expenses from the Lane Bryant and Catherines
acquisition.
“BY HAVING A SINGLE
DISTRIBUTION CENTER FOR
ALL STORES AND ONE
E-COMMERCE FULFILLMENT
CENTER, EACH WITH LEADING
EDGE TECHNOLOGY, WE’LL
REALIZE SIGNIFICANT SAVINGS
AND EFFICIENCY.”
Our stock price fluctuated over the course of the year, reflecting our
challenges and the tough environment, but as always, we remain
intently focused on the long-term positioning of the Company. We
made significant investments in our operating infrastructure and
shared services platform which we will leverage over time. We will
continue to focus on improving our enduring ability to generate
growth, significant cash flow, and strong margins.
A major focus of our integration this past year has been preparing for
our distribution center transitions. By having a single distribution
center for all stores and one e-commerce fulfillment center, each
with leading edge technology, we’ll realize significant savings and
efficiency.
Our brands will also benefit from shared service functions in many
other areas, including combining our two direct sourcing teams,
which will eventually support all of our brands. Another major focus
for us will be our move of all brands to common systems, allowing us
to plan and manage our business more effectively. Our brands will
also have support in other functions, including human resources,
lease administration, legal, employee benefits, and treasury. We
will be able to work faster, better, and smarter. We believe the tool
set and the scalable operating platform we give our brands will
enable them to focus on the areas that touch their customers...
merchandising, customer experience, and brand management.
This focus is increasingly important because today’s consumer has
reduced discretionary expenditures, demands greater value for
her dollar, and has become smarter and more educated with every
passing season. We have a starting-line advantage across
our concepts in this respect because our brands have long offered
a very compelling combination of fashion, value, and great customer
service. The lines between retail channels are blurring and we
believe our business will benefit if we provide a seamless customer
experience. We are in the early stages of developing a further
advantage by embracing an omni-channel retailing philosophy.
Today’s consumer shops the mall, surfs the web, and researches
styles and prices before she makes a purchase decision. This can
happen at home, at a store, or sometimes via an online purchase at
a register in a store, when she finds that special item and wants it in
just the right color and size.
We know that the path to creating value for our shareholders is
by creating value for our customers. Across almost 4,000 stores,
our nearly 50,000 associates know that customer service makes
the difference. Point of sale is where the business happens and
we are working hard to make sure that we enable our associates to
maximize that opportunity.
We’d like to thank our shareholders for their support, our partners
for their assistance in so many critical areas, and our associates
for their loyalty and dedication, particularly with respect to
our integration of Charming Shoppes and the transformational
infrastructure projects of the past year. When we look back at 2013,
we think we have set ourselves on the right path, met the challenges
we encountered well and have begun to put down a solid foundation
for the future. Looking forward, we’re excited to deliver on the
promise of a great team, powerful brands, and a unique opportunity
to grow our business and deliver value to our shareholders.
Elliot S. Jaffe
Co-Founder
and Non-Executive Chairman
David Jaffe
President and
Chief Executive Officer
TO ENHANCE TWEENS’
SELF-ESTEEM BY PROVIDING
THEM THE “HOT-EST”
FASHION AND LIFESTYLE
PRODUCTS, IN A FUN
ENVIRONMENT - ALL AT A
GREAT VALUE FOR MOM!
ALL WOMEN DESERVE GREAT
FASHION. WE ARE HERE TO HELP
HER DISCOVER AND ESTABLISH HER
PERSONAL STYLE - INSIDE AND OUT -
AS SHE CELEBRATES EVERY MOMENT
AND OCCASION. WE ARE HER
FASHION CONNECTION.
SIMPLY THE BEST
HOMETOWN
SPECIALTY
RETAILER.
INSPIRING WOMEN
TO LOOK AND FEEL
BEAUTIFUL.
SERVING THE
LIFESTYLE AND FIT
NEEDS OF WOMEN
SIZE 18+ WITH
CURRENT FASHION
INSPIRING HER TO
LOOK AND FEEL
HER BEST.
OUR MISSION IS TO SUPPORT ALL CURRENT
AND FUTURE BRAND PARTNERS TO BETTER
EXECUTE THEIR BUSINESS PLANS BY
PROVIDING HIGH QUALITY EXPERTISE AND
COST EFFECTIVE SERVICE WITH PASSION,
INTEGRITY AND RESPECT.
An emergency assistance
fund (funded by associates &
designed for associates) that
allows our associates to apply
for a grant of up to $2,500.
Each brand or shared service
will match time and/or
monetary contributions up to
$500 per qualified associate
each fiscal year.
Partnering with The American
Red Cross or similar
organization to help those in
need. ascena may also provide
partners with brand gift cards.
A scholarship program for
children that are legal
dependents of ascena
associates.
WE’RE PLEASED TO ANNOUNCE...
THE ROSLYN JAFFE ASCENDING WOMEN IN LEADERSHIP AWARDS
The values of “community” and “giving back” are best exemplified in, and demonstrated by, Roslyn Jaffe,
who co-founded dressbarn in 1962.
“Mrs. J,” as she is affectionately referred to, played a significant role in building a family business into
a successful enterprise with a family of brands. Her support for women in the workplace, her apprecia-
tion for family and community, creates a caring environment that is so unique to ascena’s culture.
The award will be given annually, and we will announce our first recipient in Fall, 2014.
ASCENA’S
PHILANTHROPIC
VISION IS SIMPLE:
To empower women and children to be their
best by creating opportunities in the areas of
health, wellness, education and self-esteem.
Each brand has a rich heritage of “giving back”
and everyday, associates across the company are
making a difference…leaving a legacy. Here’s a
small sampling from 2013:
2013 marked the 11th consecutive year of
dressbarn’s participation in Dress for Success.
Did you know that dressbarn customers and
associates have proudly donated over 640,000
gently used and new suits and career separates?
Maurices empowers their associates to directly
give back to their community and in 2013,
hosted over 4,000 Hometown Pride events.
Lane Bryant’s Making Strides Against Breast
Cancer campaign is doing just that! In
addition to the cause marketing campaign
in stores, the home office and store associate
walk donations (still in progress) have already
raised over $11,000.
The team at Justice has made a significant
contribution to fund the lobby of Nationwide
Children’s Hospital. During these drives, associates
can donate small furry friends that are used to
comfort a child when first arriving at the ER.
The team at Catherines is working hard to
stop diabetes by raising money through local
walks as well as the sale of their Generosity Tee.
Members of the Watkins Memorial High
School were thrilled when the Ascena Shared
Services Group offered to be a Foundation
Donor to help fund their new football field.
These highlights are a fraction of the
impactful work being done by our brands
and the Ascena Shared Services Group.
2013 FINANCIAL HIGHLIGHTS
(dollars in millions, except per share amounts)
OPERATING RESULTS
Net sales
Operating income
Net income *
2013
2012
2011
$4,714.9
$3,353.3 $2,914.0
265.3
292.6 289.8
155.2
171.8 170.5
Net income as a percent of net sales *
3.3% 5.1%
5.9%
Net income per common share - diluted * $0.95
$1.08
$1.05
FINANCIAL POSITION
Working capital
$290.2
$319.0
$378.3
Total assets
Total equity
2,871.7
2,807.1
1,839.6
1,556.4
1,340.9
1,158.0
Number of stores at end of fiscal period 3,859
3,828 2,516
Total gross square footage (in millions)
21.0
20.8 14.1
4,714.9
3,353.3
265.3
155.2
$0.95
292.6
289.8
171.8
170.5
$1.08
$1.05
2,914.0
2013
2012
2011
2013
2012
2011
2013
2012
2011
2013
2012
2011
NET SALES
(dollars in millions)
OPERATING INCOME
(dollars in millions)
NET INCOME *
(dollars in millions)
EARNINGS PER SHARE *
(diluted)
* REPRESENTS NET INCOME FROM CONTINUING OPERATIONS ONLY.
DIRECTORS, OFFICERS AND KEY MANAGEMENT
DIRECTORS
Elliot S. Jaffe
Co-Founder & Non-Executive Chairman
David Jaffe
President & Chief Executive Officer
Roslyn S. Jaffe
Co-Founder, Secretary & Director Emeritus
Kate Buggeln 1,2
Governing Board, Business Council for Peace
John Usdan 1,2,3
President, Midwood Management Corporation
Michael W. Rayden
President & Chief Executive Officer, Justice
Klaus Eppler 3
Pensioned Partner, Proskauer Rose LLP
Randy L. Pearce 1,2
(1) Member, Compensation and Stock Incentive Committee
(2) Member, Audit Committee
(3) Member, Nominating Committee
ASCENA RETAIL GROUP, INC.
Elliot S. Jaffe
Co-Founder & Non-Executive Chairman
David Jaffe
President & Chief Executive Officer
Dirk Montgomery
EVP, Chief Financial Officer
John Sullivan
EVP, Chief Operating Officer
Ronnie Robinson
President, Ascena Global Sourcing
JUSTICE
Michael W. Rayden
President & Chief Executive Officer
Scott Bracale
President, Agency
Rolando de Aguiar
EVP, Chief Financial Officer
LANE BRYANT
Linda Heasley
President & Chief Executive Officer
Lou Ann Bett
EVP, Chief Merchandising Officer
Scott Glaser
SVP, Chief Financial Officer
MAURICES
George Goldfarb
President
Erin Stern
EVP, Chief Merchandising Officer
Sue Ross
EVP, Human Resources
DRESSBARN
Jeff Gerstel
President
Keith Fulsher
EVP, Chief Merchandising Officer
John Pershing
EVP, Human Resources
Lori Wagner
EVP, Chief Marketing Officer & E-Commerce
CATHERINES
Joan Munnelly
SVP, Chief Merchandising Officer
Brett Schneider
SVP, Finance & Operations
Chip Mardis
VP, Human Resources
Eric Specter
EVP, Chief Integration Officer & Acting President, Catherines
Gene Wexler
SVP, General Counsel & Assistant Secretary
Robb Giammatteo
SVP, Financial Planning & Analysis
David L. Johns
SVP, Chief Information Officer
Jay Levine
SVP, Chief Accounting Officer & Corporate Controller
Jeffrey Liss
SVP, Digital Services
Colin Stern
EVP, General Counsel, Charming Shoppes
John Lee
SVP, Controller & Chief Accounting Officer,
Charming Shoppes
Kirk Simme
SVP, Credit, Charming Shoppes
Lece Lohr
EVP, Chief Merchandising Officer
Alan Hochman
SVP, Real Estate & Store Planning
Chris Kaighn
SVP, Stores & Store Operations
Theresa Sullivan
SVP, Human Resources
Lauren Tessaro
SVP, General Merchandising Manager, Cacique
Sandra Tillet
SVP, Stores
Brad Hartmann
SVP, Chief Creative Officer
Mike Herrick
SVP, Planning & Allocation
Neil McPhail
SVP, Stores
Gil Dennis
SVP, Stores
Etta Granata
SVP, Creative
Robin Gray
SVP, Planning & Allocation
Ben Moore
SVP, Store Development
Brian Rogers
SVP, Human Resources
Christine Williams
SVP, Planning & Allocation
Lucia Murillo
SVP, Design
Jeffrey Parisian
SVP, Real Estate
Rebecca Perry
SVP, Design
Brian Thun
SVP, Chief Financial Officer
Mary Bradley
SVP, General Merchandise Manager
Elise Jaffe
SVP, Real Estate
Raana Zia
SVP, Chief Financial Officer
Kate McKee
VP, Design/Product Development
Mark Stoddard
VP, Planning & Allocation
Brad Orloff
VP, Marketing
Susan Reiman
VP, Stores
CORPORATE INFORMATION
THE ANNUAL MEETING
The Annual Meeting of Stockholders of the Company will be held:
Thursday, December 12, 2013, 3:30pm
Crowne Plaza Hotel
3 Executive Boulevard
Suffern, NY 10901
FORM 10-K
A copy of the company’s Annual Report on Form 10-K for the fiscal
year ended July 27, 2013 will be provided to stockholders upon written
request to:
Investor Relations
Ascena Retail Group, Inc.
30 Dunnigan Drive
Suffern, NY 10910
TRANSFER AGENT & REGISTRAR
(for registered stockholders)
Communications concerning stockholder records, the transfer of
shares, lost certificates or change of address should be directed to:
American Stock Transfer & Trust Company
59 Maiden Lane
New York, NY 10038
Beneficial Stockholders (shares held by your broker in the name of the
brokerage house) should direct questions to their broker.
INDEPENDENT COUNSEL
Proskauer Rose LLP
Eleven Times Square
New York, NY 10036
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
30 Rockefeller Plaza
New York, NY 10112
ascenaretail.com