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Golden Gate Invests in Ann Inc.

Investor bought 9.5% of retailer and is in the “early stages of discussions" to assist in creating value.

Ann Inc. has a new admirer — who promptly pushed the retailer into the spotlight.

Golden Gate Capital spent $156.2 million this year to buy 4.4 million Ann shares, or 9.5 percent of the company, according to a 13D filing with the Securities and Exchange Commission Thursday. Although Golden Gate is not typically viewed as an activist investor, that type of filing is usually used when a big player plans to directly influence a company.

Investors are clearly looking for something to come from the association and word of the investment pushed shares of Ann up 11.5 percent to $41.50 in after-hours trading.

Golden Gate, for its part, has said it comes in peace and acknowledged the impact its stake might have in the market.

“We look forward to working collaboratively and constructively with you as a long-term public investor to help create value for the company and its shareholders,” Josh Olshansky, Neale Attenborough and Josh Cohen of the private equity firm’s retail group wrote in a letter to Ann Inc.’s management.

“We intend to be a long-term holder with a multiyear investment horizon,” the trio wrote. “We do not invest with the intention to put companies ‘in play’ or to change management or directors.”

That doesn’t mean some won’t take the investment as a sign of big things to come.

“We recognize the potential impact that a 13D filing can have on a company and its shareholder base, and we therefore wanted to be very clear and transparent about our intentions regarding this exciting investment in Ann,” the letter said.

Golden Gate lauded the company and its management, led by chief executive officer Kay Krill, with bullet points singling out comparable-store sales gains (averaging 6 percent over the last 16 quarters), “effective investment in the store base” and “successful assortment revitalization” as well as the firm’s cost cutting efforts and its growth strategy.

However, Golden Gate also described the company’s stock as “significantly undervalued, especially in light of today’s robust equity environment.”

Ann replied in a statement noting, “The company’s board of directors and management team remain committed to building value for our shareholders through the ongoing successful execution of our strategy and growth initiatives, as well as the continued utilization of our strong balance sheet. We always welcome new investors and appreciate all of our shareholders’ interest in the company.”

Ann operates 1,025 stores under the Ann Taylor, Ann Taylor Factory, Loft and Loft Outlet nameplates. This fall it will roll out a third brand, Lou & Grey.

Neither Golden Gate nor Ann executives could be reached for comment late Thursday.

Golden Gate has over $12 billion under management and has made investments in a number of fashion brands, including Zale, Pacific Sunwear, J. Jill and Eddie Bauer. The firm was due to sell Eddie Bauer to Jos. A. Bank Clothiers Inc. for $825 million but that deal was scuttled when The Men’s Wearhouse Inc. succeeded in acquiring Jos. A. Bank for $1.8 billion. Golden Gate will get a $42 million breakup fee, however.