1. What internal resources and assets did ANN have that gave it a competitive advantage?

2. How did ANN compete?

3. What has Kay Krill done to implement strategy, and what challenges remain?

The Ann Taylor Case provides information about both ANN, Inc. (ANN) and the overall retail environment. The case depicts ANN, a women’s specialty clothing retailer that had been successful in creating a complete product line that appealed to its target demographic of socially upscale professional women, but that continued to face increasing competition and a challenging economic environment. ANN had experienced significant growth in the past, but was now struggling. Success had been very uneven between the original Ann Taylor Stores (AT) division that sold updated classics and the company’s Ann Taylor LOFT division that carried lower priced casual merchandise.

ANN was not the only retailer suffering in a poor economic climate. News reported at the beginning of the case confirms that the entire retail industry was still facing an unpredictable environment in the aftermath of the economic troubles of 2008 and 2009. Retail businesses were encouraged to take a close look at the “right balance” of product and value in order to stand out. ANN’s current CEO, Kay Krill, had already implemented a variety of initiatives and was considering several more, but this may be too late: in 2015 ANN’s warning of missed earning projections, stagnant same-store sales, slow inventory turnover, and significant margin compression, had lead to the involvement of two major activist investors – one advocating for a sale and the other looking for strategic changes.

To generate growth, Krill had identified several distinct areas of opportunity. She continued her ongoing efforts to revitalize the flagship Ann Taylor (AT) store brand, while not dampening LOFT’s growth. In addition, Krill recognized the importance of investing in the continued growth of the e-commerce channel, of international expansion, of carefully reconfiguring the physical stores of both brands while enhancing productivity, and developing brand extensions.

It was clear that Krill was firmly committed to long-term growth. However, although profitable in 2014, ANN was just beginning to return to the sales profile of 2007. The basic question of the case is whether Krill was doing what she should do to regain and retain profitability. Was she going to be able to sustain the momentum of both brands and all channels and do so in such a way as to satisfy the firm’s activist investors? Would ANN have to go under a private equity buyout or be acquired in order to survive?