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AnnTaylor Stores (ANN) |
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WIKI ANALYSIS
Ann Taylor Stores (NYSE: ANN) sells women's clothing in the United States and Puerto Rico under the names Ann Taylor, Ann Taylor LOFT, and Ann Taylor Factory Store.
Through its various brands, the company seeks to provide busy women with an all inclusive shopping experience. The namesake brand focuses on meeting women's professional attire needs, while the LOFT store focuses on casual attire. In fiscal 2010, ANN posted $1.98 billion in net sales and $73.4 million in net income.[1]
In recent years, ANN's performance has been quite erratic. A lack of proper controls has often led to excess inventory and heavy discounting. Under the present leadership, ANN has sought to exercise better inventory oversight while repositioning its brands as full-priced destinations. As the company's main brands, Ann Taylor and Ann Taylor Loft approach market saturation, the company will be forced to develop new concepts in order to maintain acceptable growth.
Business Overview
Business Segments
Business Growth
Fiscal 2010 Performance (ended January 29th, 2011)
- Net sales increased 8.3% to $1.98 billion.[1]
- ANN posted net income of $73.4 million, compared to a $18.2 million loss in fiscal 2009.[1]
Trends and Forces
"Almost-luxury" Brands Hurt by Recessionary U.S. Economic Cycles
Consumer spending on near luxury goods such as ANN products is discretionary in nature. In times of economic recession consumer's quickly decrease expenditure on non-necessities like cashmere fleeces. For example, during a subprime lending crisis, real estate and credit markets are severely affected. Consumers faced with an inability to draw on equity in their home to fund purchases and a tougher overall credit market were in many instances "forced" to spend less on clothing. Additionally, other economic factors like the price of oil can further decrease disposable income available for discretionary purchases. Under such conditions, consumers to who do purchase clothing tend to skew their purchases toward lower-end retailers.
Reaching Market Saturation
Both of ANN's primary concepts are approaching market saturation. In order to keep growth from stalling, Ann Taylor is working on new outlets, like a new venture into high end custom designed fashion.
Competition
The retail environment is highly competitive especially in women’s apparel.
- Talbots (TLB) - TLB has a successful women's apparel line, and also targets women over 35.
- Chico's FAS (CHS) - CHS also has a successful women's apparel line.
- Gap (GPS) - GPS offers similar apparel styles as ANN.
- Nordstrom (JWN) - Brands sold at Nordstrom compete for female consumers who also shop at Ann Taylor and/or LOFT.
- Macy's (M) - Brands sold at Macy's compete for female consumers who also shop at Ann Taylor and/or LOFT.
- Limited Brands (LTD) - The Limited offers similar styles to Ann Taylor, but also has the very successful Victoria's Secret brand.
Superb ifnomraotin here, ol'e chap; keep burning the midnight oil.
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