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WIKI ANALYSIS
Ann Taylor Stores 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 2006, the Ann Taylor Loft division made up 49% of total sales, and Ann Taylor made up around 39%. [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.
Company Overview
Ann Taylor has reinvested more in building its store base, mostly for the Loft stores, over the past few years. This contributed substantially to the double-digit sales growth that the company has sustained since that turn-around.
Business Segments
ANN operates in one aggregate business segment.[2]
Business Financials
| Store Financials | FY2005 | FY2006 | FY2007 | FY2008 | FY2009 | ||
|---|---|---|---|---|---|---|---|
| Comp Same Store Sales | 3.6% | 0.1% | 2.8% | 3.3% | (14.8%) | ||
| Sales Per Square Foot | $471 | $461 | $474 | $457 | $402 | ||
Key Trends and Forces
- 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.
- Overcoming old merchandising woes- In previous years, the company has seriously cut prices to push merchandise, but this seriously injures the company's financial performance. The current leadership has placed greater emphasis on inventory controls.
- 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. In 2007, both the real estate and credit markets were severely affected by the subprime lending crises. 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 which approached the $100 mark near the end of 2007, 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.
Competition
The retail environment is highly competitive especially in women’s apparel. While Ann Taylor has made progress reinvigorating its namesake store and fine-tuning its Loft brand, expanding market share may prove difficult, especially as new companies such as Forth & Towne are extra pressure.
- Talbots (TLB) - Same store growth of 1.3% last year [3]
- Chico's FAS (CHS) - Same stores growth of 2.1% last year [4]
- Gap (GPS) - Same store sales decline of 7% last year [5]
- Nordstrom (JWN) - Same store sales saw an 7.5% increase last year [6]
- Macy's (M)
- Limited Brands (LTD)
References
- ↑ 2006 Annual Report Part 2, pg 17
- ↑ 2.0 2.1 ANN FY2009 Annual Report
- ↑ Talbot's 2006 Annual Report, page 3
- ↑ Chico's 2006 Annual Report, page 4
- ↑ Gap Stores 2006 Annual Report, page 14
- ↑ Nordstrom 2006 Annual Report, page 30
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