DISTRESSED DAILY: Crunch Time for Ascena’s Retail Turnaround

The parent of apparel brands including Ann Taylor and Lane Bryant had its credit rating slashed by two notches by Moody’s Investors Service, with the rating company warning that high leverage and negative free cash flow make it ripe for a restructuring.

• The rating company lowered Ascena Retail Group’s rating to Caa2 with a negative outlook from B3.
• After five straight years of losses, the company has been offloading underperforming brands to shore up cash.
• It has shuttered all of its Dress Barn stores, for example, marking an exit from the discount segment of its portfolio. But that may ...