AnnTaylor Stores Profit Falls on Discounts at the Loft Chain16 Mar 2007 • by Natalie Aster
AnnTaylor Stores Corp., a clothing retailer for women ages 25 to 55, said profit fell for the first time in six quarters on discounts to clear excess merchandise at its Loft chain, reported Bloomberg.
Net income for the fourth quarter ended Feb. 3 dropped to $21.5 million, or 31 cents a share, from $27.4 million, or 38 cents, a year earlier. Sales rose 6.3 percent to $610.5 million, New York-based AnnTaylor said in a statement distributed by PRNewswire.
AnnTaylor slashed prices to clear sweater and other inventory at Loft, whose clothes are more casual and cost less than its namesake chain, after wrong bets on fashion and warm weather hurt sales. Chief Executive Officer Kay Krill boosted sales of suits, dresses and other career clothing at full price at the Ann Taylor chain.
``Loft continued to suffer from merchandising missteps that began in August,'' Meredith Love Kent, a UBS Securities analyst, wrote in a March 13 report.
AnnTaylor has said the Loft chain didn't have enough ``updated classics,'' and it ``aggressively'' promoted holiday merchandise in January.
Shares of AnnTaylor rose 39 cents, or 1.1 percent, to $35.67 in New York Stock Exchange composite trading yesterday. They declined 4.9 percent last year.
Eight analysts surveyed by Bloomberg estimated profit of 30 cents a share, on average, while 12 predicted sales of $610.6 million.
CEO Krill took over the company's Loft division in January on an interim basis after Donna Noce, president of the unit, left for personal reasons.
Krill said in November that fourth-quarter profit would miss analysts' estimates because a more fashionable sweater assortment and lack of colors hurt sales at Loft. Analysts have said the chain featured skinny pants and longer-length sweaters and other tops that its shoppers may not be used to.
Krill has upgraded software to get merchandise on store shelves faster and developed a system to better allocate staffing based on customer traffic. She's also hosted fashion shows to unveil products.
Among 19 analysts tracked by Bloomberg in the past year, six rate it a ``buy,'' 11 rate it a ``hold'' and two say ``sell.''