Lane Bryant owner Ascena to buy Ann Taylor

Ascena Retail Group, parent company of Dressbarn, Lane Bryant and Maurices, has agreed to buy Ann Inc. for $2.15 billion.

The combined company will have $7.3 billion in annual sales and more than 4,900 stores, according to the Wall Street Journal. Ascena is the parent of Lane Bryant and Dressbarn, as well as Cacique and Maurices. Ann is the parent of Ann Taylor and Loft, as well as the new and growing Lou & Grey concept.

"This powerful transaction joins two strong and highly complementary organizations and management teams, and dramatically reinforces our leadership position in women's specialty apparel retailing," said David Jaffe, Ascena president and CEO. "We are excited to further leverage our uniquely capable operating platform and exceptional combined talent to drive immediate, significant and ongoing value for our stockholders. With the addition of the Ann Taylor and Loft brands, Ascena will become one of North America's largest and most diversified specialty apparel retailers, with a tremendous set of opportunities to continue to expand its leadership position in the women's apparel market."

"Ascena has identified $150 million in annualized run rate synergies in the combination that it expects to generate over a three-year period," the company said in a statement, including sourcing and procurement, distribution and logistics. The transaction was unanimously approved by both boards of directors.

Rumors of a sale began in February when Ann Inc. reportedly began exploring opportunities for a sale.

Ann Taylor and LOFT have been under pressure to explore a sale since 2013, when the company was valued at roughly $2.5 billion, slightly higher than its current purchase price by Ascena.

Ann stores and Ascena properties target roughly the same customer: women in the 20- to 40-year-old range. But its wear to work assortment has not translated well to a new work-from-home/casual office environment.

Brick-and-mortar sales have been suffering since 2010, and the company announced a strategic realignment to help better organize the online and offline pieces of the business and build a stronger omnichannel strategy. The retailer has also been expanding its new Lou & Grey concept of loungewear and knits as standalone stores and boutiques within existing locations.

For more:
-See this Ascena announcement
-See this Wall Street Journal story

Related stories:
Ann Taylor may be looking for a buyer
Investors urge Ann Taylor to sell itself
Ann Inc. to open 4 Lou & Grey concept stores this fall
Ann Inc. announces strategic realignment
RadioShack opens two new concept stores