IntroductionAnn Taylor Corporation has been a leading women specialty retailer founded in 1954 and deals with high-quality women’s apparel, shoes and accessories. It targets the busy, socially upscale women. Ann Taylor provides sophisticated, versatile and superior updated classics, and woman’s power suit with pearls to their client base that consists of fashion-conscious women between the ages of 25 to 55 (Ann Taylor 2011). Ann Taylor LOFT was launched in 1995 to appeal to women with a more relaxed lifestyle who appreciate a casual LOFT style and are cost conscious.
Ann Taylor Loft line was introduced to keep the initial brand, Ann Taylor relevant by capitalizing the casual fashion age that emerged in the 90s (Ann Taylor LOFT 2011). In late 2005, under the leadership of Kay Krill, the then appointed president and CEO, ANN was challenged in rebuilding their preeminent brand for beautiful, well-designed and classy women dressing while maintaining their image and market share. Both Ann Taylor (AT) and Ann Taylor LOFT (LOFT) experienced a variety of renovations and expansions in attempts of keeping the entire company afloat.
The biggest question for Krill was whether the appeal of elevating their brands could be sustained indefinitely in the risky and uncertain environment (Assenza, Eisner & Kuperman 2009). The economic decline in mid 2008 further posed considerable uncertainty, especially for retail businesses with some closing down. As one of the retailers, Ann Taylor was also threatened by the slowing consumer demand affecting its profitability. In her commitment to obtain the long term growth of the company even as the economy worsened, Krill was however faced with various business challenges. Challenges of AT and LOFT during the difficult retail environment going into 2009.The business environment for the retailing industry was so unpredictable and thus causing various challenges to the retailers where ANN was one of them.
The challenges that ANN faced include branding challenges, stiff competition among women specialty retailers, top management team turnover and the general economic downturn of 2008 which led to a reduction in the number of customers who purchased products from them. Economic downturn of 2008.Challenges in the macroeconomic climate in the retail industry had profound effect on ANN and the retail industry as a whole.
The declining economy led to unpredictable business environment and some of the retails stores even closed. As reported, there were 6000 retail stores that closed in 2008 showing a 25 % increase when compared to 2007 (Assenza, Eisner & Kuperman 2009). Further, there were estimated 12000 retail stores that could have been closed in 2009. Branding challengesAs a specialty retailer, ANN focuses only on one type of product but it offers it in different varieties. ANN was a specialty retailing store that engaged only in a specific line of women’s clothing.
This single-product focus is associated with increased risks since any loss in sales cannot be recouped in another product area. The appropriate strategy for such specialty retailers is seeking new market segments that they can serve. According to Assenza, Eisner & Kuperman (2009), such a strategy can cause potential problems to branding and therefore Krill was forced to open up other distribution channels which offered the same items as Ann Taylor but at lower prices. This was a harmful move in maintaining the historic brand which targeted the upscale women who had little time.