Ann Taylor Stores CorporationANN

Morningstar Rating

Stock Research and Analysis

by Zoe Tan

After two years of consecutive same-store sales declines due to a lack of compelling merchandise and a weak economic climate, Ann Taylor is poised to benefit from pent-up demand and improving consumer confidence in the near term. The firm is also on Read more

Bulls Say

The company has done a better job of differentiating between its namesake brand and its Loft concept in recent quarters.

To boost its image, Ann Taylor has invested heavily to update its stores. The company has modernized nearly all of it Ann Taylor stores in recent years.

Ann Taylor will have closed a total of 163 underperforming doors by 2010. This could lead to better margins because the company will be more focused on its best locations.

Ann Taylor ended 2008 with total inventory down 31% from the prior year. This could lead to better gross margins in 2009, as merchandise levels should be more closely aligned with demand. Read more

Bears Say

An extremely weak consumer-spending environment persists in the near term and could last for longer than we anticipate, putting additional pressure on Ann Taylor's results.

We believe the namesake chain and the Loft concept are at maturity. Plus, the company is no longer pursuing a third concept targeting baby boomer women--a sign the company's growth prospects may be limited.

The company has experienced a fair amount of turnover at high-level positions in the last few years.

Ann Taylor alienated many of its customers in the last couple of years by wandering too far from its classic careerwear roots. There is no guarantee these fashion missteps will not be repeated. Read more

Strategy

Ann Taylor has been closing underperforming stores to lower its cost base and improve profitability, while working on differentiating the merchandise at its Ann Taylor and Ann Taylor Loft concepts. Future Read more

Management

Kay Krill is president and CEO of Ann Taylor. In October 2005, she replaced J. Patrick Spainhour, who had been chairman and CEO since 1996. Krill joined Ann Taylor in 1994 as a vice president of merchandising. She was then selected to lead the development Read more

Profile

Ann Taylor Stores operates more than 900 women's clothing stores throughout the United States and Puerto Rico under the names Ann Taylor, Ann Taylor Loft, Ann Taylor Factory Read more

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