NEW YORK — Ann Taylor Stores Corp., which released disappointing fourth-quarter financial results on Thursday, said company president Kay Krill will take over as chief executive officer in October from chairman and ceo J. Patrick Spainhour, who is retiring.
“It’s a transition that makes a lot of sense,” Spainhour said in an interview. “It allows Kay to work on the Ann Taylor turnaround and continue to work on the growth strategies for Ann Taylor Loft while we look for a chief operating officer.”
Krill was named president of Ann Taylor in November. She first joined the company in 1994 and was chief of the management team of the Loft division. Krill, who led a recent off-site meeting to redefine the Ann Taylor customer, said her median age is 35. She is emphatic that returning to Ann Taylor’s roots is the right move.
“There’s really nobody addressing the wardrobing needs of the updated classic consumer,” she said.
“As women’s wardrobes have evolved over the years, we have not evolved with them,” Krill said. “We need a good balance in our offerings, including wear-to-work clothes, separates and casual and special occasion wear. We disappointed the customer with the work and casual component. Our first order of business is getting the suit business up on its feet.”
Ann Taylor’s pricing had also gotten too high. “We’ll be pricing ourselves in a more competitive way,” Krill said. Retail analysts also pointed out that Ann Taylor and Loft have become too similar.
The company’s stock gained nearly 5 percent, to close at $26.43, rising $1.16 in New York Stock Exchange trading Thursday. In February the stock spiked amid rumors of a takeover bid as well as buzz that Spainhour might leave the company. The takeover talk has since died down.
Recently, Adrienne Lazarus was named executive vice president of merchandising and design at Ann Taylor and Donna Noce was promoted to the same post at Ann Taylor Loft. Both report to Krill. Ann Taylor hasn’t determined what it will do with the chairman’s title, a spokesman said.
The firm on Thursday reported a fourth-quarter loss from a profit a year ago as markdowns took a toll on margins and higher severance costs and rent expenses pulled down earnings. Profits in fiscal 2004 dropped 37.2 percent.
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