AnnTaylor Stores Corp.’s swing into the black during the second quarter was led by the strong performance of the retailer’s namesake label.
For the period ended July 31, the company posted a profit of $18.6 million, or 31 cents a diluted share, compared with a loss of $18 million, or 32 cents, in the year-ago period.
“It was a terrific quarter for the Ann Taylor brand,” said Kay Krill, president and chief executive officer. “Significantly higher sales and gross margin rate drove the increase.”
She cited the division’s wear-to-work assortment as the standout, including pants, suits, skirts and, in particular, dresses.
“As I shopped the competition, we were effectively the only one that had a go-to-work assortment for the second half,” she told WWD. “Every other competitor was focused on casual. Women absolutely snapped their wallets shut in the past year, but now they’re buying [wear-to-work] items….We hear that women who 10 years ago decided to start a family are reentering the workforce. I do think there is selective hiring, especially in urban markets. Also, people want to look good at work to keep their jobs.”
Krill cited clean inventories entering the third quarter, disciplined expense managementand a strong balance sheet with more than $260 million in cash and no debt. But she cautioned in a conference call, “We do expect the environment to remain challenging in the near term with continued pressure on consumer spending.”
Comparable-store sales rose 15.2 percent at the Ann Taylor division. At the Loft unit, comps were flat because of a dearth of basic and core tops there. “It is a buy and mix issue,” Krill said. “We feel confident we have corrected that.” Loft’s shorts, cargo pants, woven tops, jewelry and lounge collection sold well, she said.
Total comps rose 6.1 percent in the quarter. Total net sales were $483.5 million, versus $470.2 million in the year-ago period. For the third quarter, the company forecast sales approaching $495 million, reflecting double-digit comps at the Ann Taylor brand and a low-single-digit comp-store rise at Loft.
Gross margin as a percent of sales reached 55 percent, a record for the quarter, reflecting a 260-basis-point improvement from 52.4 percent in the 2009 quarter. Excluding after-tax restructuring charges, earnings per diluted share rose to 32 cents compared with 6 cents a year ago.
The company opened a 4,000-square-foot Ann Taylor prototype in Lenox Square in Atlanta on Friday, which is 40 percent smaller than the average Ann Taylor box. “It’s a more aspirational environment — clean, modern, chic, with some sparkling elements like chandeliers over the cash wrap and wardrobing rooms and a runway of mannequins,” from the entrance to the rear of the store, Krill said. Three or four more stores under the format will open this fall.
Regarding the Loft prototype that opened in May at Paramus Park Mall in New Jersey, Krill said, “Customer acceptance is very strong.” Ten Lofts in the format will open this year.
Ann Taylor is in the third year of a three-year restructuring that targets $125 million in annual savings and 158 store closings. Fifty-six stores are set to close in 2010. Some might stay open if positive trends continue. The company ended the second quarter with 894 stores.
In addition, the retailer is launching an e-commerce platform in October featuring technology enhancements, including a simpler, quicker checkout process and an option that allows shoppers to post product reviews. The company will broaden its online distribution by starting overseas shipping in the fourth quarter or early spring, initially to English-speaking countries.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast