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Stock of the Day
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Ann Taylor (ANN)
Ann Taylor Dresses for Success with a New Wardrobe
AnnTaylor Stores Corporation, a women's clothing chain, reported a $2.1 million third quarter profit today. This news may sound relatively run-of-the-mill on the surface, but it is particularly exciting for investors considering that Ann Taylor posted a $13.4 million loss just a year ago. The retail sector in general has been rather stagnant because of the slumping economy. Consumers seem to be tightening their budgets and cutting back on leisure expenses. Women, especially ones with families, tend to be more inclined to make family purchases before personal ones. Even with all these obstacles in play, how was Ann Taylor able to generate a profit?
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A big contributing factor in Ann Taylor's turnaround has been its recent corporate strategy. Ann Taylor revaluated its branding position and realized that it needed a change. The women's apparel retailer is traditionally associated with "career" clothing. However, this type of clothing has been difficult to sell with the economy under so much stress lately. As a result, Ann Taylor has worked hard to reposition itself as more than just a professional attire clothing store. The initial rollout of the Loft's more casual and trendy clothing line generated a very positive response from Ann Taylor consumers, and has been very encouraging for the corporation. Ann Taylor is really making an effort to distance itself from the career clothing stereotype. The female clothing retailer does not plan to stop selling its more traditional collection styles, but it is aiming to diversify its product line. With this is in mind, Ann Taylor has decided to make its new, casual autumn line the focal point for its fourth quarter collection. Ann Taylor has been spotlighting the more casual clothing in its store display windows while also flooding fashion magazines with advertisements.
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Ann Taylor has also implemented some of the more "routine" methods for improving profit margins. Like many of its competitors, Ann Taylor has made a conscious effort to cut costs. As part of its expense reduction program, the female apparel retailer has streamlined its inventory levels while scaling back the number of operating stores. Ann Taylor has also been pushing more "full price" selling to customers. The combination of all these factors has been instrumental in boosting the corporation's profit margin. These more traditional profit techniques have complimented Ann Taylor's recent rebranding efforts very nicely.
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Ann Taylor seems to be on the right track. It appears to have found a solution for its branding woes. Ann Taylor's recent cost reduction adjustments have also jumpstarted its profit margins. The focus on streamlining inventory and full price selling has certainly made a positive impact. However, the rebranding efforts have not completely solved its slumping sales problem. Overall, net sales fell 12 percent for the quarter. While Ann Taylor is optimistic that its new branding efforts will help sales during the upcoming holiday season, the women's apparel retailer also warned that fourth quarter sale margins will be lower because of seasonal promotions. Regardless of holiday uncertainties, Ann Taylor is hoping that its new clothing is the right fit for improving future sales and profit.
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Other News about Ann Taylor
Ann Taylor's New Heidi Klum Ads - Ann Taylor chooses supermodel Heidi Klum to be the face of its new holiday collection.
Ann Taylor 2009 Holiday Collection Preview - A blogger's sneak speak and opinion on the new Ann Taylor Holiday collection. How are consumers feeling about Ann Taylor's new direction?
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Profile |
Click here to view a detailed profile of Ann Taylor.
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