Ann Taylor (based on an earlier version of the case)
1. Consider the performance of A nn Taylor. How well is the present strategy working?
Ann Taylor compared to the industry:
I n fiscal year 2005, Ann Taylor was number six in the Women’s Wear Daily’s top twenty of the publicly traded retailers specializing in women 's wear. ANN maintained this position from the previou s fiscal year 2004.
Ann Taylor compared to key rivals:
Several retailers that target the same or similar demographic of the 35-year old woman include Talbots, Chico's, and Coldwater Creek. Talbots maintained its number seven position with $1.81 billion in sales, and a seven percent increase in volume over the previou s year. Coldwater Creek also maintained its number 18 position with $780 million in sales and a staggering 32 percent increase in volume. Chico's moved up three positions from number nine to 12, also with a 32 percent increase in volume, and $1.4 billion in sales. ANN saw a 12 percent increase in volume over the previou s year and had sales of $2.07 billion. ANN is maintaining its position in the standings, but with a 32 percent growth rate, Chico's may be an even greater threat to ANN in the years to come.
Ann Taylor's past performance:
Ann Taylor has seen some up years and some down years, but overall seems to be growing each year. In fiscal year 2002, the company as a whole (Ann Taylor and LOFT) experienced a negative sales percentage of 3.9%, but in 2003, they achieved positive growth of 5.3%. This was the largest growth period for ANN between 2003 and 2007. Since then, they have maintained growth overall, but the divisions of AT and LOFT have each seen their own negative growth years as they struggled to find their brand identity and reestablish themselves in the market. Net sales in fiscal 2006 were $2.34 billion compared to $2.07 in 2005, and $1.85 in 2004 showing a steady growth in sales revenue s despite the ups and downs with the sales percentages.
I n fiscal year 2006, sales were at a record $2.3 billion , so a financial goal would be to maintain that level of sales and possibly increase that number in subsequent years.
Some strategic goals include opening 52 AT stores and 60 LOFT stores, with 50 more scheduled in 2007. ANN also wants to expand and upgrade existing stores. CEO Kay Krill spoke about revamping the clothing lines including its suits and special events lines, and expanding their offerings in petites. Krill also wants to reestablish the Ann Taylor brand in the market place while maintaining the image, momentum, and market share of LOFT.
Overall, the strategy of Ann Taylor seems to be hit and miss. They are doing well with respect to increasing their revenues year after and maintaining their sixth place position on the Women's Wear Daily list of top 20 publicly traded High Volume Specialists. However, the growth has not been consistent - ranging from 3.6 percent in one year to 0.1 percent the next. In fiscal 2006, ANN had a phenomenal start, but failed to keep up with consumer expectations, and saw their net income drop 21 percent in the fourth quarter. The retail fashion industry is very volatile and risky, so without a sound strategy, a star company can find itself in last place very easily.
2 -What are the resource strength and weak nesses, and the external opportunities and threats of Ann Taylor?
They are trying to appeal to women of multiple income levels and styles by having the Ann Taylor line, which is the most expensive, LOFT which is more casual and slightly less expensive, and the Factory store that sells at outlet prices. *
They are promoting their executives from within, which allows the management to be intimately familiar with how the company works. *
They are offering a selection of dye-to-match sashes and accessories for bridesmaids, as well as expanding their regular and petites...
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