Ann Taylor Stores Corp. (New York) announced it is eliminating 19 percent of the staff at headquarters and lowered sales and profit expectations for its third quarter.
Under the expanded strategic restructuring program, which includes the organizational streamlining, the company expects to generate total ongoing annualized savings of $80-$90 million over the three-year program period. The company said the cuts are already yielding better-than-expected savings, enabling the company to withstand the deepening economic conditions.
“Following a solid first half performance, during which we effectively navigated a difficult economy, the dramatic deterioration in both the financial markets and the macroeconomic environment in September and October has put additional pressure on the retail industry, in general, and the women's apparel sector, in particular,” said president and ceo Kay Krill. “
As a result, third quarter financial results are tracking well below our previous expectations.”
Krill said, “We are moving more aggressively to accelerate our cost savings initiatives and to ensure our organization is appropriately structured for a recessionary environment. Savings from our January restructuring program are now expected to exceed previous estimates and, combined with the actions announced today, we expect to further improve our cost structure and position the company well for when the economy improves. . . . In addition, we will be significantly scaling back capital spending in 2009. With the benefit of a strong, debt-free balance sheet and approximately $295 million in available liquidity, including more than $80 million in cash, we are well-positioned to support our brands and focus on strengthening our underlying business, even as we take aggressive steps to reduce our cost structure.”