MOODY'S RAISES RATING ON ANN TAYLOR DEBT

NEW YORK--Moody's Investors Service Inc. has boosted its rating outlook for Ann Taylor Inc. to positive from neutral, affecting $110 million of long-term debt.
Moody's, which reported the change late Thursday, also confirmed the specialty retailer's subordinated notes at Single B1.
The ratings agency said the positive outlook reflects the retailer's improved financial position, restoration of brand image and future growth opportunities.
Moody's also attributed the rating to the firm's further leveraging of operating expenses with an expanding store base.
Moody's said it maintained its Single B1 rating owing to the company's vulnerability to fashion risk, historic low earnings levels, expenses from aggressive store expansion and its dependence on imports for product sourcing.
"Despite continued sluggishness in women's apparel, after the return of Sally Frame Kasaks as chairwoman, the company has made substantial progress in restoring its franchise value," Moody's said. Moody's attributed that turnaround to a renewed focus on quality and value pricing, and the ability of the merchandising team to feature more casual careerwear.
--Fairchild News Service

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