Ascena Retail Group said late Monday it would wind down its women's budget clothing chain, Dressbarn, shutting about 650 stores in the United States, as it sharpens its focus on profitable brands.

The company, which also houses fashion brands Ann Taylor and Lou & Grey, said the move would strengthen its overall financial performance.

"This decision was difficult, but necessary, as the Dressbarn chain has not been operating at an acceptable level of profitability in today's retail environment," Dressbarn Chief Financial Officer Steven Taylor said.

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Dressbarn, a household name for over 50 years, has struggled to grow sales in a competitive market where it battles with online retailers like Amazon and off-price retailers like T.J. Maxx.

Ascena's shares, which have more than halved this year, were up about 3 percent in extended trading.