The Dress Barn, Inc. History

Address:

30 Dunnigan Drive
Suffern, New York 10901
U.S.A.

Telephone: (845) 369-4500
Fax: (845) 369-4829

Public Company
Incorporated: 1962
Employees: 8,900
Sales: $717.1 million (2001)
Stock Exchanges: NASDAQ
Ticker Symbol: DBRN
NAIC: 5621 Women's Clothing Stores

Company Perspectives:

Dress Barn is America's leading discount retailer of women's business apparel and accessories. Founded in 1962, we now have over 700 locations nationwide. We offer our current, name brand apparel and 20 to 50 percent off department store prices. Most of our locations are located in or around major metro areas nationwide.

Key Dates:

1962:: Elliot Jaffe and his wife Roslyn open the first Dress Barn store in Stamford, Connecticut.
1963:: A second store is opened.
1966:: The company incorporates as The Dress Barn, Inc.
1983:: The Dress Barn goes public.
1985:: The company owns and operates 200 stores throughout the United States.
1989:: Dress Barn Woman, targeting plus-sized women, is introduced.
1990:: Dress Barn is acquired by JRL Consulting Corporation.
2000:: Dress Barn begins a changeover to sell exclusively its own private-label brand of women's wear.
2002:: Dress Barn's new line of sportswear accounts for 65 percent of sales.
2003:: The company announces plans to resume Internet sales.

Company History:

The Dress Barn, Inc. ranks among the U.S.'s largest specialty women's clothing retailers, with over 750 stores throughout the country. The chain caters to career-oriented women in the middle-range income bracket. In the early years of the 21st century, Dress Barn transformed itself from a discounter into "a value-priced specialty retailer" offering its own private label clothing. The company also shifted its focus from careerwear to casualwear, with the latter accounting for 65 percent of sales by the end of 2002. Still operated by the founding Jaffe family in 2003, The Dress Barn has store units positioned throughout 43 states under the names Dress Barn and Dress Barn Woman (specializing in women's plus-sized apparel), with the vast majority of locations offering the full range of sizes.

Early Years

The beginnings of The Dress Barn can be traced to 1962, when Elliot Jaffe was working as a merchandising manager for Macy's Department Store in Connecticut. He approached his wife, Roslyn, with an idea for a women's discounted apparel store, and the two decided to begin planning a test store. Knowing that they needed a reliable source of income to support their children, Jaffe retained his job at Macy's as he and Roslyn worked after-hours to open the first Dress Barn store later that year in Stamford, Connecticut.

According to Jaffe, the first store was marked by numerous retail errors, such as the lack of convenient parking nearby, the lack of dressing rooms for customers, and the existence of stairs that customers had to climb in order to access the store. Despite these shortcomings, however, the new store was an immediate success. In fact, it was so successful that less than a year after its grand opening, Jaffe was able to leave his job at Macy's to focus solely on the operations of their new enterprise. Meanwhile, Roslyn had begun planning the preparation and introduction of a second store nearby. In March 1963, the second store unit was opened, and The Dress Barn store chain was born.

Increased sales demands at the two Dress Barn stores soon prompted the Jaffes to begin searching for another store location and a new warehouse in the Stamford area. Previously, The Dress Barn's warehousing, receiving, and distribution operations had been done from the first store's basement, which could only be accessed using a narrow flight of stairs. After searching the area for a new location that would lend itself to more efficient operations, the Jaffes chose an old barn in Stamford, a choice well-suited to the company's name. This barn was renovated to become the company's third store as well as its distribution center.

In mid-1966, the company's holdings were incorporated as Dress Barn, Inc. Throughout the rest of the decade, the company experienced calculated and planned growth under the watchful eye of Jaffe and his expanding management team. They made sure that the business was not expanded too quickly, in order to maintain available capital and avoid sinking all resources into the company at once. Meanwhile, stores were added to the chain sporadically at a rate consistent with the company's increase in earnings.

Growth in the 1970s-80s

By the 1970s, after almost a decade of steady growth and expansion, The Dress Barn, Inc. was composed of almost 20 store units. The company was large enough to have gained the buying power to bring in products from big-name designers, such as Liz Claiborne, Calvin Klein, and Jones New York. Dress Barn continued to focus on selling this apparel to career-oriented women at discounted prices, usually 20 to 50 percent lower than those of its department store competition. Meanwhile, the chain continued to expand through the opening of new stores and the acquisition of other chains, such as Pants Corral and Off the Rax.

On May 3, 1983, Dress Barn went public, offering its stock for $23 per share. Half of the shares were sold publicly, while the other half was retained by management insiders. The money earned through the public offering gave Dress Barn added capital with which to expand and grow while also incurring added responsibility for the company to perform well for all of its new owners.

By July 1984, Dress Barn owned and operated 100 stores throughout the United States, holdings which marked a 30 percent increase from the year before. By the end of 1984, the company possessed 157 stores, after the acquisition of 46 Off the Rax stores, eight stores from The Gap, and the addition of three new Dress Barn stores.

The year 1985 saw the company begin to earn national recognition, as Forbes magazine ranked Dress Barn number 42 out of the Top-200 Small Companies in the United States. The following year, Business Week listed Dress Barn as number 26 of the country's Top-200 Hot Growth Companies. By that point in time, the company was operating over 200 stores throughout the United States, with high concentrations in the Atlantic Northeast, the Midwest, and California.

Two years later, Dress Barn's store count had increased almost 50 percent to 307, spread throughout 26 states. The company was clearly achieving success in the discount women's apparel niche that it had created for itself and decided to build on that by entering the market for plus-sized women's clothing. In 1989, Dress Barn Woman was introduced, targeting plus-sized women from the same basic demographic segment as the original Dress Barn stores. Most new Dress Barn Woman store units were placed in areas nearby existing Dress Barn stores to capitalize on Dress Barn's name recognition factor.

Struggle and Success in the 1990s

At the beginning of the decade, Dress Barn received further recognition of its achievements in the retail market when it was awarded the High-Performance Retailer Award from Management Horizons, a division of Price Waterhouse. The award was based on four consecutive years of performance highs for the company. Also in 1990, Dress Barn purchased JRL Consulting Corporation for $2.56 million.

The 1990s saw the company continue to enter new markets in the United States through the opening of new stores and the acquisition of existing chains. In 1993, Dress Barn added 21 new women's apparel stores purchased from Country Miss. At that point, the company was operating hundreds of Dress Barn and Dress Barn Woman stores, as well as numerous combination units.

Dress Barn, which had traditionally marketed its women's apparel at discounted prices, suffered a hit to its earnings potential in the early 1990s when many department stores began to introduce their own moderately priced, private-label clothing lines. Dress Barn's sales advantage was diminished by this trend, which was reflected by the company's annual profit margins. Another detriment to Dress Barn's sales potential was the fact that a few of its own suppliers, such as Jones Apparel Group, also moved into the discounted apparel market through the introduction of their own factory outlet stores.

Despite its hardships, however, Dress Barn continued to achieve increased sales figures each year in the first half of the 1990s. Its continued growth prompted the company to begin searching for a larger and more advanced headquarters and distribution location. In 1994, the company moved into a new facility in Suffern, New York. The state-of-the-art facility handled all distribution and warehousing needs, while also housing the company's executive offices. Also in 1994, Dress Barn issued its own credit card to the public, and soon thereafter over half a million cards were in circulation.

From 1995 through 1996 the company opened an impressive number of new stores, 136 in all. Most new stores being introduced were combination Dress Barn/Dress Barn Woman stores, a decision which allowed the company to reach both target groups while using less space and capital. The chain eventually peaked at some 775 stores, but this number dropped to 680 by mid-1998 due to closures of poorly performing stores. The retrenchment paid off when Dress Barn earned a record $40.2 million on sales of $598.2 million in 1998.

New Century, New Strategy

At the turn of the 21st century, Dress Barn was facing an ominous trend. While the chain had long focused on careerwear--suits, dresses, and blazers--the influence of "casual Fridays" was being felt throughout the work week. The shift impacted Dress Barn's bottom line in 1999, when sales increased 3 percent to $616 million but net income fell 17.1 percent to $33.3 million.

The company created a comprehensive plan to reverse its slide in profitability for 2000. One key component of the repositioning was an increase in private-label clothing, which promised higher profit margins. Over the next two years, Dress Barn's in-house brand grew from 40 percent of its offerings to 100 percent. During this period the company also expanded its lines to include shoe and petites departments as well as jewelry and casualwear. As stated in its 2002 10-K report, Dress Barn "shifted its focus from structured, career looks to softer outfit dressings and assortments." By the end of 2002, sportswear accounted for about 65 percent of sales. The company hoped that this mix of clothing for both workdays and weekend wear would make its stores "one-stop shopping" destinations for working women. New store openings hewed to a "combo" format, encompassing both Dress Barn and Dress Barn Woman merchandise. Although the company continued to open additional locations, it also shuttered poorly-performing stores.

A new marketing campaign encompassed a brand makeover, advertising push, and a foray into cataloging. The company launched its first catalog in September 1999, hoping to "extend the reach of the brand to both existing store markets and non-store markets." Dress Barn hoped to put 10 million catalogs under the noses of existing and potential customers over the course of 2000. However, losses in both the catalog and e-commerce divisions brought an end to those outlets in November 2001. The company planned to resume Internet sales during fiscal 2003.

Dress Barn also hoped to shift its appeal to a "younger-feeling" customer in part by refining the name to "dressbarn," a format that subtly reflected a more casual image. As Elliot Jaffe told WWD in November 2000, "We intend to promote Dress Barn as a brand and a lifestyle, not just a label, to differentiate ourselves from our competition." One thing that would not change was Dress Barn's longstanding commitment to customer service.

The changes produced mixed results over the ensuing two years. Annual sales increased by $100 million, to $717.1 million, by the end of fiscal 2002 (July 27), but net income only grew by $4.6 million, from $33.3 million in 1999 to $37.9 million in 2002. During this period, the retailer chalked up its best quarterly performances ever, with a net income of $13.4 million on $177.3 million in sales in the final period of fiscal 2002.

That year David Jaffe succeeded his father as CEO, with the elder Jaffe remaining as chairman. The Jaffes were "cautiously optimistic" about Dress Barn's future, setting a goal of $1 billion in sales and announcing an expansion into California.

Principal Competitors: Charming Shoppes, Inc.; Deb Shops Inc.; Burlington Coat Factory Warehouse Corporation; Ross Stores Inc.

The Dress Barn, Inc. History

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Key Dates:

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