Wednesday, May 20, 2009

AnnTaylor Gives Cautious Outlook, Shares Slip

Reuters

AnnTaylor Stores Corp (ANN.N) gave a cautious outlook on Wednesday as the recession cuts into sales of its women's clothing, sending shares 8 percent lower.

But Wall Street Strategies analyst Brian Sozzi said the plan could backfire and leave stores looking stale, which could then create an inventory buildup for the key fourth quarter.

"If you're a consumer and you go into the store and you see a particular (pair of) pants, and you go back two weeks later, you want to see something new on the floor ... regardless of if you have a new fashion top," Sozzi said.
Sozzi, who has a "sell" rating on the shares, said AnnTaylor is counting on the successful repositioning of its flagship brand, but that success is not definite, given inconsistent execution in the past.

"I'm erring on the side of caution," Sozzi said. "Not that the assortment falls flat on its face, but it may not live up to what they're doing.

Link to full article: http://www.reuters.com/article/marketsNews/idINN2044927520090520?rpc=44