NEW YORK — Shares of Ann Taylor Stores Corp. rose $2.21, or 8.83 percent, Thursday to close at $27.25 on the New York Stock Exchange, even though the retailer’s March sales results showed that comparable-store sales decreased 6 percent.
What’s fueling the rise? Analysts point to speculation that the company could be an acquisition target, with Jones Apparel Group as a potential suitor.
Dorothy Lakner, retail and apparel analyst at CIBC World Markets, said: “The sales news was dismal. [But] the Jones Apparel Group Inc. shelf registration this week is prompting positive reaction by the stock. The theory is that apparel manufacturers are looking for ways to grow outside of the department store.” According to Lakner, there’s been talk before about a merger between the two companies.
On Tuesday, Jones Apparel filed with the Securities and Exchange Commission to periodically sell up to $450 million in debt securities, warrants and preferred and common stock. The company said part of the net proceeds would be used for acquisitions.
Jeffrey Edelman, apparel analyst at UBS Warburg, observed: “The Jones filing may have fueled speculation. Ann Taylor has had disappointing sales and has lowered its guidance for the year. Anything’s possible. Never say never. Under the right conditions, it probably can be a good fit.”
A spokeswoman for Ann Taylor declined comment. Executives at Jones Apparel could not be reached for comment, as it closed at 3 p.m. Thursday for the holiday weekend.