Ascena Retail Group Inc (NASDAQ: ASNA) is making a run for the top in the market this morning, and for good reason. The company announced that it has reached an agreement to sell an asset. The sale will drive signficant funding into the company and allow it to focus on core assets, exciting investors. Today, we’ll talk about:
- The asset sale;
- what we’re seeing from ASNA stock as aresult; and
- what we’ll be watching for ahead.
ASNA Announces Asset Sale
As mentioned above, Ascena Retail Group is having an incredibly strong day in the market today after announcing that it has reached an agreement to sell an asset.
According to various reports, ASNA will sell a majority stake in Maurices, a women’s clothing chain. Under the terms fo the agremeent, OpCapita LLP, will purchase the asset for approximately $300 million.
The news comes amid the company’s review of its brands, operations and assets. The company is also the owner of brands like Ann Taylor and Dressbarn.
In a statement, David Jaffe, Chairman and CEO at ASNA, had the following to offer:
Structural changes in our industry have impacted a number of retailers. We have not been immune to these challenges. In 2016, we initiated our Change for Growth plan, which is on track to deliver run rate cost savings of $300 million to our company by July 2019. We have also identified, and developed plans for, an additional $150 million in savings, which will drive operating margin rate expansion.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. When it comes to Ascena Retail, the news proved to be overwhelmingly positive.
After all, the asset sale will drive hundreds of millions of dollars in funding through the door. Moreover, the company will have the opportunity to focus its efforts on brands that are performing better.
So, it’s not a shocker to see that excited investors are pushing the stock up in the market this morning. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (10:12), ASNA is trading at $1.25 per share after a gain of $0.18 per share or 16.82% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on ASNA. In particular, we’re interested in following the company’s efforts to bulster its remaining brands. Nonetheless, we’ll keep an eye on the story and bring the news to you as it breaks!
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