Dive Brief:

• Ascena Retail Group on Monday pushed back on a report from the New York Post that "for at least a month" it has failed to communicate with lenders that, as a group, are owed more than $1.4 billion by the company, including $210 million they expected from the company's sale of its majority stake in discount banner Maurices. 

• Ascena hasn't missed payments but the lack of communication has led the lenders to wonder if the company is mulling bankruptcy, according to the New York Post report. 

• "[A]scena is in full compliance under its term loan, which is due in August 2022, and revolving credit facility and intends to remain so, is current on all obligations, and has substantial cash on its balance sheet. The company regularly engages with its lenders," an Ascena spokesperson told Retail Dive in an email. The spokesperson didn't address Retail Dive's question about whether the company is preparing a bankruptcy filing.

Dive Insight:

Ascena may be "in full compliance" now when it comes to the debt due in 2022, but its troubles led Moody's Investors Service in recent months to question whether that will remain true.

Moody's in June downgraded the retail conglomerate and analysts there said that while they expect "significant earnings recovery in fiscal 2020," that may not be enough to "start positioning Ascena for a timely and economical refinancing of its sizeable term loan due August 2022."

There are other signs of trouble. In late July, the Nasdaq Stock Market notified the company that it had failed to meet its requirement that its per-share price trades at above $1 for a period of 30 consecutive business days. The company has until January to regain compliance.

Ascena has a new CFO as of earlier this month, just one of several changes in its top executive ranks. The most prominent one came in May with the exit of CEO and chairman of the board David Jaffe, whose mother founded the company as "Dress Barn." He was replaced by Gary Muto​, who was the President and CEO of Ascena brands, and by Carrie Teffner in the executive board chair. At that time, Chief Operating Officer Brian Lynch also left.

The group is scrambling to recover, in part by trimming its portfolio. In addition to the Maurices sale, Ascena is winding down its namesake Dressbarn banner and shutting down all 650 of those stores. The conglomerate also runs two plus-size brands with stand-alone stores, Lane Bryant and Catherines, that some analysts say should be incorporated in some way into Ann Taylor and Loft, its other remaining brands, in light of consumers' increasing rejection of specialty plus size players in favor of inclusive ones.

Even with all the adjustments it's made, there's more work to be done by that new team. For one thing, Ascena remains a massive retail company, and more downsizing is likely, according to Ray Hartjen, marketing director of store analytics firm RetailNext. "Even with Dressbarn eventually closed, ascena will still have about 3,000 stores, and I would expect a further consolidation of offerings and an eventual blurring of product lines and product categories, particularly the integration of plus-size fashion into premium fashion," Hartjen told Retail Dive earlier this year.