By Evan Clark and Vicki M. Young
with contributions from Bloomberg
 on February 19, 2015

Shares of Ann Inc. shot up 9 percent in after-hours trading Thursday, following a report that the company was working with J.P. Morgan Chase & Co. to explore a sale.

The retailer is said to have reached out to potential buyers, including rivals, in recent weeks.

That sounded good to investors, who drove the stock up $3.17 to $38.25 in after-hours trading, giving it a market capitalization of about $1.7 billion.

With a tough third quarter and about $100 million in cash on its books, Ann has been of interest to dealmakers recently.

Ann signed a nondisclosure agreement with Golden Gate Capital in October so the two could get more detailed in their “collaborative dialogue.” Golden Gate bought a 9.6 percent stake, or nearly 4.4 million shares, of the retailer in March.

In November, Kay Krill, Ann’s president and chief executive officer, told WWD that the battle for market share in apparel was only intensifying.

“Traffic has been tough for a couple of years,” Krill said. “The higher-end malls are a little bit better than the big regional malls.”

She also repeated the oft-heard complaint among apparel retailers that shoppers are drawn more to technology and home goods than fashion.

“The lack of fashion newness and fashion must-haves is really playing into that,” Krill said. “Women are definitely responding to fashion. It’s not about replacement items. She is buying what is new.”

To help boost the business, the company is leaving more open-to-buy available to test newness, allowing stores to tap online inventories for “endless-aisle” capability, expanding into Mexico and Canada and building on the Lou & Grey concept, which plans to open 10 new doors this year.

Representatives for Ann and Golden Gate declined to comment.

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