Ann Taylor, LOFT, Lane Bryant Parent Company Doles Out Bonuses As Possible Bankruptcy Looms

The parent company of Ann Taylor, LOFT, Catherines, Lane Bryant, Justice, and a series of other brands, has doled out retention bonuses to key executives and restored base salaries to its executive team as it considers its financial options, including bankrutpcy protection.

Ascena Retail Group (ASNA) said in a Securities and Exchange Commission filing that the COVID-19 pandemic was creating a “volatile and uncertain environment” across all its brands. As a result, the company was reviewing its compensation for the “stability” of its workforce.

Ascena had previously warned of its financial position amid the coronavirus pandemic as it closed all its 2,800 stores and furloughed a portion of its workforce. The company also implemented 50% pay cuts for some positions.

In the SEC filing, the retailer said it would restore base salaries for the employees that took a pay reduction because of the impact of the coronavirus on the company. The pay rate restoration was effective on Sunday and is part of an effort for Ascena to “retain and continue to motivate” its executive team.

Ascena has also made retention and performance-based arrangements for its executives to cover a six-month period, starting on or about June 22. Each chief executive officer and executive chair of the board will receive $1,068,750. The executive vice president and the chief financial officer will receive $603,125 each.

The bonuses will also include performance-based incentives for the executives.

Ascena is the latest retailer to hand out bonuses as it explores its financial options. The company warned in May that because of the coronavirus pandemic, it was looking at all opportunities as sales declined amid store closures, debt increased, and cash flow dwindled.

The company has been speculated by some reports to be nearing a possible bankruptcy filing, which could come as soon as July, Bloomberg reported. Ascena is also looking to sell off some of its brands, the news outlet said.