Golden Gate Takes Major Stake in Ann Inc.

Actress Kate Hudson, brand ambassador for Ann Inc.’s Ann Taylor stores, introduced this week a capsule LBD collection designed in partnership with Ann Taylor creative director Lisa Axelson

Actress Kate Hudson, brand ambassador for Ann Inc.’s Ann Taylor stores, introduced this week a capsule LBD collection designed in partnership with Ann Taylor creative director Lisa Axelson

New York—Barely a week after reporting its fourth quarter profit nearly doubled and a strategic realignment in its business, Ann Inc. said Thursday that Golden Gate Capital, a private equity investment firm, took a 9.5% equity stake in the retailer, making Golden Gate its largest shareholder.

In a regulatory filing, Golden Gate “collaboratively and constructively” with the parent to Ann Taylor and LOFT as a long-term investor. While Golden Gate’s stake puts it in the position of being an activist investor able to get seats on the board of directors, Golden Gate indicated that it is pleased so far with Ann Inc.’s management and direction.

‘Meaningful, Long-Term Investor

“We do not invest with the intention to put companies ‘in play’ or to change management or directors,” Golden Gate said in the letter to Ann Inc.’s management. “We have tremendous respect and admiration for you and your company, and we look forward to working with you as a meaningful, constructive, long-term investor.”

Golden Gate, which reportedly has more than $12 billion in assets, has made other retail investments including Eddie Bauer Holdings, J. Jill, Payless ShoeSource and Zales Corp., which last month agreed to be sold to Signet Jewelers Ltd. for $1.4 billion.

In its earnings report filed on March 14, Ann Inc. posted a profit of 10 cents a share, beating analysts’ estimate for 7 cents. Comparable store sales rose 2.9% just shy of analysts’ predictions of a 3.3% increase.

At the time CEO Kay Krill announced a company realignment including a new president, along with an annualized pre-tax operating savings of approximately $25 million, of which approximately $15 million is expected to be realized in fiscal 2014. About 100 jobs would be eliminated in the process, the company said.

Golden Gate’s stake edges past that of BlackRock Inc., Ann Inc.’s second largest shareholder at 9.3%.

Actress Kate Hudson, brand ambassador for Ann Inc.’s Ann Taylor stores, introduced this week a capsule LBD collection designed in partnership with Ann Taylor creative director Lisa Axelson

 

Like this? Share it!


Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology. jeffp@busjour.com