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INTRODUCTION
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#ImNoAngel
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CHANGINGTHECONVERSATION
110-year-old brand
Unique experience,capability, and credibility to
serve “her size” customer Reshaping customer andindustry perspectives
72
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TURNAROUNDJOURNEY
Product
+ Talent
+ Marketing
"The Power ofConvergence"
73
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REVENUEDRIVERS
Product
Marketing
Channel development
75
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REVENUE DRIVERSPRODUCT
“Best At” = Fit solutions
- Pants and jeans, bras
76
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REVENUE DRIVERSPRODUCT
“Best At” = Fit solutions
- Pants and jeans, bras
“Win At” = Growth distortions
- Tops, Livi Active, Panties
77
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REVENUE DRIVERSPRODUCT
“Best At” = Fit solutions
- Pants and jeans, bras
“Win At” = Growth distortions
- Tops, Livi Active, Panties
Cacique Intimates
78
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REVENUE DRIVERSPRODUCT
“Best At” = Fit solutions
- Pants and jeans, bras
“Win At” = Growth distortions
- Tops, Livi Active, Panties
Cacique Intimates
Outfitting vs. Key items
79
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REVENUE DRIVERSPRODUCT
“Best At” = Fit solutions
- Pants and jeans, bras
“Win At” = Growth distortions
- Tops, Livi Active, Panties
Cacique Intimates
Outfitting vs. Key items
Designer Collaborations
80
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REVENUE DRIVERSMARKETING
Rebalancing investments
Focus on fashion first
Reframing the value proposition
Fully leverage credit
81
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REVENUE DRIVERSMARKETING
#ImNoAngel ($5M campaign)
- Brand building – own the bodyconscious dialogue
- 15 billion impressions
- Impact on brand awareness andperception
82
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REVENUE DRIVERSMARKETING
#ImNoAngel ($5M campaign)
- Brand building – own the bodyconscious dialogue
- 15 billion impressions
- Impact on brand awareness andperception
#PlusIsEqual ($5M campaign)
- Continue the dialogue
- Fashion Week
83
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REVENUE DRIVERSCHANNEL DEVELOPMENT
ecommerce growth
- Online exclusives
- Re-platform
- Digital marketplaces
84
S
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REVENUE DRIVERSCHANNEL DEVELOPMENT
ecommerce growth
- Online exclusives
- Re-platform
- Digital marketplaces
Real estate strategy
- Repositioning: 15% of chain
new/renovated in 2 years- Outlets
85
REVENUE DRIVERS
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REVENUE DRIVERSCHANNEL DEVELOPMENT
ecommerce growth
- Online exclusives
- Re-platform
- Digital marketplaces
Real estate strategy
- Repositioning: 15% of chain
new/renovated in 2 years- Outlets
Omni-channel initiative
86
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GROSS MARGINEXPANSION
Promotion rationalization
Sourcing, speed
87
GROSS MARGIN
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GROSS MARGINPROMOTION RATIONALIZATION
Cacique semi-annual sale
88
GROSS MARGIN
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GROSS MARGINPROMOTION RATIONALIZATION
Cacique semi-annual sale
Apparel clearance
89
GROSS MARGIN
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GROSS MARGINPROMOTION RATIONALIZATION
Cacique semi-annual sale
Apparel clearance
Reduced storewide eventsand coupon limitations
90
GROSS MARGIN
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GROSS MARGINSOURCING
Increased directpenetration
Speed initiative
91
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EXPENSEINITIATIVES
Store, corporate SG&A
Occupancy
Long-term marketingleverage
92
OPERATING MARGIN
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Contribution
FY15 base: (0.1%)
Sales leverage: 4 – 5%
Gross margin rate lift: 2 – 3%
Expense initiatives: 1 – 2%
Total: 7 – 10%
OPERATING MARGINROADMAP
93
CLOSING
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CLOSINGCOMMENTS
94
Multiple levers to driveoperating margin growth
Consistent fashion andassortment execution
Gross margin upside
Expense leverage andproductivity improvement
Expanding the brand’sappeal and reach
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George Goldfarb | President and CEO
Introduction / overview
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Top-tier industry profits andsignificant growth potential
Unique niche
Customer focus andinnovation
Top talent
Introduction / overview
96
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Revenue growth – d
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Speed & InnovationNYC Design & Trend Studio
Leveraging factory design capability
product
98
Revenue growth – d
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Assortment Expansion
PLUS
Online extensions Accessories
product
99
Revenue growth – di h l
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New loyalty program
New platform and
mobile siteDigital attribution /enterprise analytics
Expansion of onlineexclusives
direct channel
100
Revenue growth – k i
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Drive new-to-file acquisitionand expand reactivationinitiatives
Leverage personalization andsegmentation capabilities
Drive omni-customer traffic
marketing
101
Revenue growth – i
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1,200+ store potential
new store expansion
Strips58%
Malls36%
Outlets5%
102
Revenue growth – l t it
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annual opportunity
103
Gross margin rate
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Increased internalsourcing penetration
Higher regular pricesell-through
Faster inventory turn
g
104
Operating margin roadmap
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p g g p
105
Closing comments
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Unique niche and strongeconomic model
Sales and gross marginlevers to drive continuedoperating margin growth
Strength of team andculture
g
106
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Jeff Gerstel President and CEO
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Overview – the journey from a ‘store’ to a ‘brand’
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the journey from a store to a brand
Growth strategy
Challenges / evidence
of progress
Size of the prize
109
Growth strategy
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Differentiate merchandise
Drive direct channel
Build brand relevance
Leverage design andsourcing
110
Operating margin opportunities
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• Revenue growthMerchandise
Digital channel
Brand relevance
• Gross margin rateDesign / sourcing
Inventory turn / promotionalposition
111
Revenue growth – merchandise: core brand differentiators
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create products & experiences for value-minded, 40-ish womenStrategy example: Re-invent the core
be famous for the dress: her #1 dress destinationStrategy example: DRESSBAR
a curated assortment of brands for the many facets of her lifeStrategy example: DB Sunday (refined casual)
be famous for fit: solutions for real women's bodiesStrategy example: Westport 1962 denim
be her go-to place for go to work stylesStrategy example: under development
112
Revenue growth – merchandise: sweaters
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Create prod ucts & exper ienc esfor value-m inded, 40-ish wo m en
• Re-invent the core
New merchant / design team
Refined assortment
113
Revenue growth – merchandise: dresses
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be fam ous fo r the d ress :her #1 dress d es t inat ion
DRESSBAR
• FY15 Q3 launchDress sales +8% vs. industry -5%;continuing momentum
• FY16 strengthen and expand
Successful guest designer program;new collaboration launch for Spring
Internal design driven margin gain
114
Revenue growth – merchandise: casual lounge
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g
a cura ted assor tm ent o f b rands fo rthe m any facets of her l i fe
DB Sunday
• Refined casual lounge collection• FY16 Fall rollout following
successful test
• Outperforming expectations
115
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Revenue growth – direct channel
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• Conversion opportunitiesSite performanceUser experienceFree ship to store
• Optimize mobile
• Drive traffic – organicsearch performance
• Create omni environmentin stores
117
Revenue growth – brand relevance: marketing campaigns
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g p g
#labelmeconfident
• Fall awareness campaign
Shift perceptions
Influence the influencers
• Prepare for Springacquisition campaign
118
Revenue growth – brand relevance: direct mail / analytics
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y
Enhance direct mail effectivenessusing cus tom er l i fet ime value
Identify likely high value new
customers through data mining ofbehavioral patterns
Target reactivation efforts anddirect mail based on predictedprofitability
119
Gross margin initiatives
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• Scale internal design andsourcing
Increase product differentiation
Improve technical fit
Reduce product cost
• Inventory managementReduce clearance levels
Faster turns
120
Operating margin roadmap
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ContributionFY15 Base 1%
Sales
leverage: 1 – 3%
Gross marginrate lift: 2 – 3%
Total 4 – 7%
121
Closing comments
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• Talent in place -- driving journeyfrom a ‘store’ to a ‘brand’
• Wins with major initiatives
Fashion executionBrand awarenessSourcing penetration
• Poised to expand digital
• Ready to drive customeracquisition
122
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Brett SchneiderPresident
OVERVIEW
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• WE ARE: – Product-focused
– Uniquelypositioned
– Driving results
– Positioned forgrowth
TRANSITIONING FOR CONTINUEDGROWTH
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GROWTH
FY13 – FY15: – Accelerated comp-
driven growth
– Sourcing-drivengross margin rateexpansion
125
TRANSITIONING FOR CONTINUEDGROWTH
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GROWTH
FY13 – FY15: – Accelerated comp-
driven growth
– Sourcing-drivengross margin rateexpansion
FY16 – FY20: – Moderating comp
store growth
– Unit growth – Promotion refinement-
driven gross margin
rate expansion
126
SALES GROWTHto $500M
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127
350
400
450
500
2015 2016 2017 2018 2019 2020
Comp Growth
Store Growth
Other Revenue
STORE GROWTH OPPORTUNITY
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• NEW STORES, NEWMARKETS
• REPOSITIONING IN
CURRENT MARKETS• CLOSURE OF NON-
PRODUCTIVE UNITS
128
DIRECT GROWTHOPPORTUNITY
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• New platform withenhanced mobile site
• Expanded merchandise
categories and onlineextensions
• Amplifying effect of new
stores in new markets
129
OPERATING MARGINROADMAP
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ContributionFY15 Base 9%
Sales
leverage: 1 – 2%Gross marginrate lift: 1.5 – 2.5%
Depreciation: (1%)Total 10 – 12%
130
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Robb GiammatteoEVP and Chief Financial Officer
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Multiple EBITDA drivers – top line - legacy ASNA
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135
Cumulative EBITDA opportunity: $150M+
Multiple EBITDA drivers – top line - legacy ANN
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136
Cumulative EBITDA opportunity: $70M+
Multiple EBITDA drivers – gross margin rate – legacy ASNA
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Justice rate recovery;+$50M
137
58%
55%
52%
58-60%
FY13 FY14 FY15 Target
Full Year Justice Gross Margin Rate
Multiple EBITDA drivers – gross margin rate – legacy ASNA
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Justice rate recovery;+$50M
Lane Bryant rateinitiatives; +$30M
138
56.3%
1.0-1.5%
0.5-1.0%
0.5% 58-59%+
F Y 1 5
S o u r c i n g
/
S p e e d
P r o m o t i o n a l
R e f i n e m e n t
A d d i t i o n a l
S A S
/ C
l e a r a n c e
R e f i n e m e n t
T a r g e t
Full Year Lane Bryant Gross Margin Rate
Multiple EBITDA drivers – gross margin rate – legacy ASNA
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Justice rate recovery;+$50M
Lane Bryant rateinitiatives; +$30M
Distributed ordermanagement; +$25M
139 I n t e r n a
l
B e n c h m a r k
R a n g e
L e g a c y
A S N A -
T a r g e t
Omni-Channel
Gross Margin Rate Opportunity
50bp
200bp
Multiple EBITDA drivers – gross margin rate – legacy ASNA
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89%
72%
32%
4%
77%
J u s t i c e
L a n e B r y a n t
m a u r i c e s
d r e s s
b a r n
C a t h e r i n e s
Justice rate recovery;+$50M
Lane Bryant rateinitiatives; +$30M
Distributed ordermanagement; +$25M
Internal sourcing
penetration; +$40M
140
Internal Sourcing Penetration* Apparel (%)
* FY15 Spring penetration rates
Multiple EBITDA drivers – gross margin rate – legacy ASNA
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Justice rate recovery;+$50M
Lane Bryant rateinitiatives; +$30M
Distributed ordermanagement; +$25M
Internal sourcing
penetration; +$40M
141
Cumulative EBITDA
Opportunity:$145M+
Multiple EBITDA drivers – gross margin rate – legacy ANN
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Justice rate recovery+$50M
Lane Bryant rateinitiatives +$30M
Distributed ordermanagement +$25M
Internal sourcing
penetration +$40MANN rate recovery
142
Cumulative EBITDA
Opportunity:$145M+
$25M+
Multiple EBITDA drivers – sales and gross margin
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143
Incremental EBITDA Opportunity
$295M+
LEGACY ASNA
$150M+
$145M+
$95M+
LEGACY ANN
$70M+
$25M+
EBITDADriver
Top-Line: Gross MarginRate:
Total:
[A] [B]
ANN standalone cost savings /integration synergies*
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$7 $48 $148 $235
144
$ Million
* Figures represent run rate at fiscal year-end
[C]
[D]
Expense management
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Recent operating expense growthShared service capacity build-outBrand capability development
Discrete brand initiatives
Steady-state marketing support
145
Significant earnings power – $1B+ EBITDA by FY18
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374
30325
189
513
246
94
80
78 851
150 1,001
F Y 1 5 A S N A
S t a n
d a l o n e
E B I T D A
T o p - l
i n e
/
G r o s s M a r g i n
R a t e G r o w t h
F Y 1 6 C
h a r m i n g
S y n e r g i e s
I n f l a t i o n
/
R e i n v e s t m e n t
F Y 1 8 A S N A
S t a n
d a l o n e
E B I T D A
F Y 1 5 A N N
E B I T D A
T o p - l
i n e
/
G r o s s M a r g i n
R a t e G r o w t h
I n f l a t i o n
/
R e i n v e s t m e n t
A N N C o s t
S a v i n g s
A S N A
/ A N N -
E x c
l . S y n e r g i e s
I n t e g r a t i o n
S y n e r g i e s
F Y 1 8 A S N A
E B I T D A
146
EBITDA ($ million)
Legacy ascena
Legacy ANN
Significant earnings power – $1B+ EBITDA by FY18
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374
30325
189
513
246
94
80
78 851
150 1,001
F Y 1 5 A S N A
S t a n
d a l o n e
E B I T D A
T o p - l
i n e
/
G r o s s M a r g i n
R a t e G r o w t h
F Y 1 6 C
h a r m i n g
S y n e r g i e s
I n f l a t i o n
/
R e i n v e s t m e n t
F Y 1 8 A S N A
S t a n
d a l o n e
E B I T D A
F Y 1 5 A N N
E B I T D A
T o p - l
i n e
/
G r o s s M a r g i n
R a t e G r o w t h
I n f l a t i o n
/
R e i n v e s t m e n t
A N N C o s t
S a v i n g s
A S N A
/ A N N -
E x c
l . S y n e r g i e s
I n t e g r a t i o n
S y n e r g i e s
F Y 1 8 A S N A
E B I T D A
147
EBITDA ($ million)
Legacy ascena
Legacy ANN
[A]
[B]
Significant earnings power – $1B+ EBITDA by FY18
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374
30325
189
513
246
94
80
78 851
150 1,001
F Y 1 5 A S N A
S t a n
d a l o n e
E B I T D A
T o p - l
i n e
/
G r o s s M a r g i n
R a t e G r o w t h
F Y 1 6 C
h a r m i n g
S y n e r g i e s
I n f l a t i o n
/
R e i n v e s t m e n t
F Y 1 8 A S N A
S t a n
d a l o n e
E B I T D A
F Y 1 5 A N N
E B I T D A
T o p - l
i n e
/
G r o s s M a r g i n
R a t e G r o w t h
I n f l a t i o n
/
R e i n v e s t m e n t
A N N C o s t
S a v i n g s
A S N A
/ A N N -
E x c
l . S y n e r g i e s
I n t e g r a t i o n
S y n e r g i e s
F Y 1 8 A S N A
E B I T D A
148
EBITDA ($ million)
Legacy ascena
Legacy ANN
[C][D]
Normalizing capital expenditures
8/20/2019 ASNA 2015 Investor Day - ASNA - Presentation
149/155
149
($ million)
% of operatingcash flow
75% 129% 69% < 50%
Legacy ASNA$225-$250M
Historical capex figures shown are presented on an accrual basis
Free cash flow – FY18 pro-forma
8/20/2019 ASNA 2015 Investor Day - ASNA - Presentation
150/155
150
De-levering balance sheet
8/20/2019 ASNA 2015 Investor Day - ASNA - Presentation
151/155
151
FY16 Debt to EBITDA: 2.6x FY18 Debt to EBITDA: 1.3x
$1,325
$1,001
Projected FY18Average Debt
FY18 EBITDAPro-Forma
$1,750
$685
Projected FY16Average Debt
FY16 EBITDA GuideMiddle of Range
De-levering balance sheet
8/20/2019 ASNA 2015 Investor Day - ASNA - Presentation
152/155
152
FY16 Interest Coverage: > 3x FY18 Interest Coverage: > 7x
Investment considerations
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153/155
Multiple EBITDA drivers
Significant earnings power
Normalizing CapExAccelerating free cash flow
De-levering balance sheet
153
Vision
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154/155
“Serve our shareholders and create valueby becoming a family of leading brands
with $10 billion in salesand top- tier profitability”
154
Breakouts
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155/155
Justice Tribeca HubAnn Taylor / LOFT Murray Hill Hub
Lane Bryant Nolita Hub
maurices Soho Hubdressbarn / Catherines / SSG Foyer
CEO / CFO Wharton Forum