Golden Gate Capital Corp. has taken a 9.5 percent stake in Ann Inc., the owner of the Ann Taylor clothing brand, according to a regulatory filing, making it the largest shareholder in the women’s apparel retailer.
Golden Gate, a private-equity firm based in San Francisco, looks forward to working “collaboratively and constructively” with Ann as a long-term public investor, it said in a letter to Ann executives, the filing yesterday shows.
“Ann is a great business, with a thoughtful strategy, led by an extremely competent management team who has a long track record of success,” Golden Gate said in the letter. “We also believe that the company’s stock is significantly undervalued, especially in light of today’s robust equity environment.”
Stock investors snapped up shares of retailers in the past year, amid signs of a U.S. economic recovery and improving employment. The Standard & Poor’s Retailing Index has jumped 28 percent over the past year, and reached a record this month. That compares with a 20 percent return for Ann over the past 12 months.
“We do not invest with the intention to put companies ‘in play’ or to change management or directors,” Golden Gate said in the letter.
Chief Executive Officer Kay Krill is trying to boost revenue growth as competitors slash prices to draw shoppers into malls. The women’s apparel retailer, which operates more than 1,000 stores, said in a March 14 statement that profit in the quarter ended Feb. 1 was 10 cents a share, more than the 7 cents analysts predicted. Sales at stores open at more than a year including online sales rose 2.9 percent in the fourth quarter, missing estimates for a 3.3 percent increase.
BlackRock Inc. is the second-largest shareholder in Ann, with a 9.3 percent stake, according to data compiled by Bloomberg.
Golden Gate manages more than $12 billion in assets, according to the letter. It has made retail investments in companies including Eddie Bauer Holdings Inc. and Zales Corp., which agreed to sell itself to Signet Jewelers Ltd. last month for $1.4 billion.