UPDATE: December 19, 2019: Ascena Retail Group has taken a step to avoid getting kicked off the Nasdaq stock exchange. The apparel retailer's board approved a 1-for-20 reverse stock split, aimed at raising its price per share by reducing the number of shares traded on the exchange, according to a Thursday press release. After the reverse split, Ascena will go from having 199.4 million shares outstanding to just under 10 million.
The company can regain compliance with Nasdaq if its shares trade above $1 for 10 consecutive days ahead of Jan. 27.
Dive Brief:
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Through an SEC filing on Friday, Ascena Retail Group revealed that the company received a notification letter on July 29 from the Nasdaq Stock Market that the company has failed to meet its requirement for trading on the stock exchange.
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The retail group's stock sold for under $1 for a period of 30 consecutive business days, prompting the notice. Ascena did not immediately return Retail Dive's request for comment.
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The company has until Jan. 27, 2020, to regain compliance, which would require its stock to close at a price of more than $1 for 10 consecutive days.
Dive Insight
The possibility of a Nasdaq delisting is just one of a series of problems Ascena faces in 2019. The retail group has been on increasingly shaky ground in recent months.
In May the company announced its Dressbarn unit will shutter all of its 650 stores. May also brought the disclosure that Ascena's CEO and chairman of the board, David Jaffe, was leaving the company, and news that the corporation completed the sale of its Maurices brand. In early June, a shareholder filed a class-action lawsuit against the retailer alleging that the company misled investors about complications following its Ann Inc. acquisition in 2015. And as recently as last week the company announced that Dan Lamadrid was promoted to chief financial officer, replacing longtime executive Robb Giammatteo.
Moody's Investors Service recently downgraded Ascena's rating from stable to negative. The downgrade reflected Moody's expectations for "significantly weaker than previously anticipated earnings in fiscal years 2019 and 2020," according to the report, which was emailed to Retail Dive.
Ascena operates nearly 3,500 stores in the United States, Canada and Puerto Rico across all of its brands.
