By  on December 2, 2004

NEW YORK — Ann Taylor Loft, the standout division of Ann Taylor Stores Corp., is getting experimental. It’s deep into testing children’s wear and will make a decision next year on whether to roll out a children’s chain, according to sources.

Sleepwear and swimwear are also test vehicles, but it is believed that, at this point, children’s wear is the only category that could be spun off into a separate retail operation.

“It’s exciting. It’s got potential,” a source close to the company said of children’s wear.

Loft currently sells girls’ apparel for holiday, including dresses, coats, sweaters and pants, in about 150 stores. Sizes range from newborn to 5T. According to the source, the testing will continue next year with fewer stores, roughly 50, but with the addition of boys’ wear. Loft first tested children’s on a smaller scale in holiday 2003.

The Loft division of the Ann Taylor Stores Corp. has been a strong performer for the past few years, while the Ann Taylor unit has long been a drag on sales and profits.

In the third quarter of the year, sales at Ann Taylor dropped 3.6 percent to $199.6 million, while sales at Ann Taylor Loft surged 37.2 percent to $215.5 million. Comps at Ann Taylor dropped 4.2 percent and comps in the Loft division increased 9.2 percent, the division’s 19th consecutive month of positive same-store sales.

Kay Krill, who had been the driving force behind the Loft unit, last month was named president of the corporation. In addition to leading Loft, she will be steering the signature division to try to stabilize it. She could not be reached for comment on the children’s program. The company will end this year with 350 Loft units, 360 Ann Taylor units and about 36 factory outlets. Next year, 75 Lofts, 15 Ann Taylors and 15 outlets are slated to open.

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