Specialty retailers AnnTaylor Stores Corp. and Eddie Bauer Holdings Inc., announced restructuring programs on Wednesday in an effort to bolster sales and improve operations.
The news was made after the market closed. Ann Taylor's multiyear program will include closing 117 underperforming stores and downsizing company headquarters staff by 13 percent.
"This restructuring is designed to position us as a stronger, leaner company that can be more agile in responding to economic realities and marketplace opportunities. And we are confident that this program will not only improve our bottom line, but also enable us to reinvest in our business to drive more profitable growth in the future," said Kay Krill, president and chief executive officer, in a statement.
Krill said the program should increase the company's operating margin by more than 200 basis points over the next three years. Ann Taylor also will take a cautious approach to new store growth in 2008 and delay the test of their new concept until 2009, due to economic woes and a slowdown in retail.
Shares of the company jumped 1 percent to $23.06 in after-market trading.
Eddie Bauer said it would cut 123 jobs as the company reorganizes their corporate staff across three locations. Positions in Seattle, Chicago and Columbus, Ohio, will be eliminated after the company said in its last earnings call that overall costs are too high.
"We have taken a major step to streamline the organization, simplify processes and focus our resources on our strategic priorities," said Neil Fiske, president and ceo, in a statement.
The job cuts, which represent an aggregate of 16 percent of corporate staff, are part of a broader initiative to slash $25 million to $30 million out of the operating cost structure of the business.
Separately, Eddie Bauer announced the appointment of Tony Krohn to divisional vice president of research, design and development for outerwear; and Joe Moji to divisional vice president of financial planning and analysis.
Shares of the company rose 1.4 percent to $6.01, in after-market trading.
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