The program will include closing 117 underperforming stores over the 2008-2010 period; downsizing the company's headquarters staff by approximately 13%; and a “broad-based productivity initiative, including the strategic procurement of non-merchandise goods and services, to improve efficiencies and effectiveness across the organization and store base.”
"Following a very thorough review of our entire business and cost structure, we are taking actions to enhance our overall effectiveness and improve our profitability,” said president and ceo Kay Krill, “and we believe that doing so will increase our operating margin by more than 200 basis points over the next three years.”
For 2008, said Krill, the company will open fewer Ann Taylor and Loft stores and delay the test of its new concept until 2009.
The company plans to close 64 of the 117 targeted stores during fiscal 2008. By division, it is planning to close 25 Ann Taylor stores in fiscal 2008, with an additional 14 stores slated for closure in fiscal 2009-2010; and 39 Loft stores are expected to be closed in fiscal 2008, with 39 additional stores slated for closure in fiscal 2009-2010. The company said it also expects to continue to close other stores over the 2009-2010 period as part of its normal business process.
In 2008, the company plans to open four Ann Taylor stores, 15 Loft stores and 20-25 Ann Taylor Factory stores. In addition, it is proceeding with its rollout of Loft Outlet, planning to open 10 of those stores in fiscal 2008.