ANN TAYLOR FILLS POSTS, STOCKS RISES
Byline: Vicki M. Young
NEW YORK — Ann Taylor Stores Corp. filled three executive posts Thursday, the same day that shares of the stock closed up 6.6 percent as the company met Wall Street’s fourth-quarter earnings estimates of lower profits.
Barry Erdos was promoted to senior executive vice president and chief operating officer. His previous post was with J. Crew from 1998 to 1999, also as chief operating officer. Erdos also held previous positions at The Limited Inc., Limited Express and Lane Bryant.
J. Patrick Spainhour, chairman and chief executive officer, said in a statement: “In his new role, Barry will be assuming greater responsibility for the daily operating and administrative areas of the business. This will allow me to work more directly with the two new presidents we are recruiting to support our Ann Taylor and Ann Taylor Loft divisions, and increase my focus on the product side of the business, particularly merchandising and marketing.”
James Smith was promoted to senior vice president and chief financial officer, He was vice president and controller. Sallie DeMarsilis, who has been with the company for six years, has taken the spot vacated by Smith.
Shares of Ann Taylor were up $1.73, to close at $27.98 in trading on the New York Stock Exchange.
The company on Thursday issued a profit warning stating that earnings for the first half of the year will fall short of expectations because of heavy discounting of spring merchandise.
It also said net income for the quarter ended Feb. 3 dropped 76.3 percent, to $3.8 million, or 13 cents a diluted share, compared with $15.9 million, or 50 cents, in the year-ago quarter. Excluding nonrecurring charges, net income would have been $5.1 million, or 18 cents.
Sales for the quarter increased 15.7 percent, to $343.6 million from $297.1 million, while comparable-store sales — excluding the extra week in the latest period — declined 4.3 percent. Comps in the prior-year period had been up 2.3 percent.
During the quarter, the company opened three Ann Taylor stores and 11 Ann Taylor Loft stores. The company also expanded one existing Ann Taylor store, closed two and closed one Ann Taylor Loft store located in an outlet center.
Spainhour said: “Sales in the fourth quarter were unquestionably disappointing. As we explained in our January sales release, the Ann Taylor collection overemphasized fashion-forward styling, and we devoted too high a percentage of our assortment to occasion dressing for holiday. These issues were compounded by a challenging retail environment, which became more pronounced at the end of the quarter.”
For the year, income was $52.4 million, or $1.76 a diluted share, compared with $64.5 million, or $2.05, a year ago. Excluding one-time charges in the first and fourth quarters, income would have been $58.8 million, or $1.97, for the year ended Feb. 3, 2001. Sales were up 13.7 percent, to $1.23 billion from $1.08 billion in 1999, while comps were down 0.5 percent.