Ann Taylor parent Ascena Retail Group says it will shutter between 250 and 650 stores across the US after posting a third-quarter loss of US$1.03 billion.

Ascena also owns 4800 stores in the US, Canada and Puerto Rico, trading under the banners Lane Bryant, Loft, Maurices, Catherines, Justice, Total Kids Fashion and Dressbarn. The company took a $1.3 billion non-cash impairment to write down its goodwill and other intangible assets. In the same quarter a year ago, it reported a $15 million profit.

Quarterly sales fell from $1.669 billion to $1.565 billion, with same-store sales down 8 per cent. Every single retail banner group posted a decline, ranging from 6 per cent to Loft’s 12 per cent.

President and CEO David Jaffe said the company will close more than 250 locations by the end of July. The future of a further 400 stores is under a cloud if Ascena cannot renegotiate rents with landlords.

“Over the next two years, we expect to close or achieve substantial rent reductions in more than 650 stores, which represent almost 25 per cent of the total store population with lease term maturity between 2017 and July of 2019,” Jaffe said. “We expect our fleet optimisation program will be earning accretive and will deliver working capital benefits.”

Jaffe blamed the growing preference by consumers towards shopping online for persistent store traffic declines and intense commercial activity.  

“We expect these factors will remain major headwinds for the foreseeable future and reflect an accelerated shift to consumer demand toward e-commerce,” Jaffe said. “Responding to the shift requires fundamental changes in retail operating model, and we’ve made significant progress toward transforming our business to compete in this new environment.”