Ann Taylor Tries Haute Couture

Discussion
Sep 19, 2007

By Tom Ryan

Ann Taylor has introduced an upscale clothing line in an effort to capture a larger number of affluent female shoppers. Launching this week in stores in New York and Chicago, the Collection carries prices about 40 percent higher than its traditional merchandise.

Typically, pants at Ann Taylor sell for $68 to $128 and suit jackets, $198 to $228. Collection prices range from $175 to $195 for pants, and $295 to $365 for suit jackets. The line is built around work-appropriate suits and dresses that Ann Taylor is known for but features high-end fabrics, such as Loro Piana cashmere, from Italy.

“We know there’s a client there who has an appetite for more upscale, expensive product,” Adrienne Lazarus, president of the Ann Taylor brand, a division of Ann Taylor Stores Corp told The Wall Street Journal.

The move comes as Ann Taylor and other midlevel women’s apparel retailers have struggled lately, and upscale chains have thrived, according to the Journal. It also follows other attempts by specialty retailers to dip into more luxury merchandise.

About a year and a half ago, J. Crew Group introduced a higher-priced, limited-edition line featuring $228 jeweled ballet flats and a $595 navy cashmere jacket. Also called Collection, it was given its own section on J. Crew’s website this spring and a free-standing store will open on Madison Ave. in April 2008. Coach has also successfully expanded its line of handbags costing $400 to upwards of 20 percent of its mix.

Still, selling luxe items without the cachet of designer labels’ shops is a challenge for Ann Taylor.

Recognizing this, Ann Taylor is putting Collection in its own department, with black-lacquer hangers and black signs with pale writing. Sales associates have been trained to point out the more expensive fabrics and buttons, and special linings and stitching inside waistbands. Rather than paper shopping bags, purchasers receive garment bags. The line will only be available at select stores although it will eventually have its own section on Ann Taylor’s website.

Indeed, the retailer told the Journal it has learned of the dangers of letting a brand stray too far from its roots. To mark its 50th anniversary three years ago, Ann Taylor created a high-end line that included a dress with a stiff crinoline lining and a $900 rabbit-fur jacket. It bombed after customers complained that they didn’t know how to mix the trendy pieces with other items in their closets.

That’s why, unlike the 50th-anniversary line – which, Ms. Lazarus said, “really tried to be something else” – Collection will focus on classic styles, especially work-friendly items. The goal is to create deluxe versions of items Ann Taylor shoppers traditionally buy. When customers walk into the store, she said, “They’re not going to say, ‘What brand is this?'”

Discussion Questions: Do you think Ann Taylor’s move to sell the high-end Collection line is good for the brand? Will it confuse customers? Do you think Ann Taylor is properly addressing the challenges of a moderate-to-better chain introducing more upscale items?

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12 Comments on "Ann Taylor Tries Haute Couture"


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Mark Lilien
Guest
14 years 8 months ago

Ann Taylor’s stock has doubled in 5 years, but the stock has struggled for the past year or so. Ann Taylor is one of the best run retailers in a fairly mature segment. It’s not easy to gain strong sales growth in this segment, so any new initiatives need to be tested carefully. I’m surprised by the “Collection” name, because it isn’t unique.

Bill Robinson
Guest
Bill Robinson
14 years 8 months ago

I think it will confuse the core Ann Taylor shopper. It’s so much better to stay focused on your niche and to serve all of their needs.

To augment their product line with a new “Collection” is just getting Ann Taylor into the game. Going upscale requires an entirely different promotional and service strategy. To pull it off, the stores will need a whole array of physical features to communicate the upscale message, including upgrades to fixtures, lighting, dressing rooms, and retail atmospherics. One on one selling practices also need to be scaled up. Clienteling software becomes imperative.

If Ann Taylor wants to go upscale, they should open a new chain or buy an existing one.

Dick Seesel
Guest
14 years 8 months ago

This looks like a strategy worth testing, to find out whether there is an appetite for “best” on top of the “better” price points at Ann Taylor. It will take some special handling in terms of merchandise presentation, packaging, customer service and so on to make it stand out within the store–but it makes more sense to test this concept within Ann Taylor’s four walls before considering a rollout to a freestanding concept.

Roger Selbert, Ph.D.
Guest
Roger Selbert, Ph.D.
14 years 8 months ago
Ann Taylor has identified and is going after one of the wealthiest and fastest-growing (hence lucrative) demographic market groups in America: baby boomer women. Two recent books provide the what, why and how: PrimeTime Women (Barletta), and BOOM (Brown, Osborne). I review, summarize and synthesize them in the current issue of Growth Strategies (rogerselbert.com). Some highlights from BOOM: 1. In the next decade, women will control two-thirds of the consumer wealth in the United States. 2. Many Boomer women are well established in their careers and at the peak of their earning potential. 3. Within the next decade, many Boomer women will not only continue to earn income but will also be managing inheritance windfalls from their parents and their husbands. 4. Even in traditionally “male” product categories, women are responsible for more than half the purchases. 5. In 2004, women age 35 to 54 represented the highest proportion of Web surfers, compared with both male Boomers and all members of younger generations. 6. Companies owned by women account for 30% of America’s small businesses… Read more »
Ian Percy
Guest
14 years 8 months ago

And around we go again. Maybe the Hummer people should produce a sports car. Or Denny’s can set up a fine dining section in their restaurants.

Ann Taylor makes good clothes, so maybe they’ll pull it off. But generally, when you run counter to the mind-set you’ve spent years forming in the public mind, you end up in trouble and ruin both brands. It is much easier to create a new mind-set than to expand one.

Theresa Fortune
Guest
Theresa Fortune
14 years 8 months ago

I assume no one at Ann Taylor was paying attention in retail industry class when Wal-Mart tried to go out for the “better” customer and in turn lost focus on their core customer.

I agree with Bill, if they want to try this strategy, open a new chain or buy one.

Retailers please…this is not the time to start revamping a core business that has been the bread and butter for you. Enhance your business, embrace your customers; see what else is going on with your customers needs so you can build on it.

Anne Howe
Guest
14 years 8 months ago

I wonder if Ann Taylor will get the fit right as it attempts to serve boomer women? If they only serve the thin boomers, they will only have about 30% of the market to even appeal to.

I am on board with the idea that it’s easier to create a whole new store concept than to broaden the focus on a successful concept until it becomes too messy for the consumer to understand.

Steve Weiss
Guest
Steve Weiss
14 years 8 months ago

So shoppers who love the brand can now go into the store and feel just a wee bit crappy if they can’t really afford the better stuff hanging on those nice black hangers. This is classic messing with the brand and no good will come of it.

Li McClelland
Guest
Li McClelland
14 years 8 months ago
Ann Taylor has obviously decided it wants to keep its loyal customers and grow with them as they climb the financial ladder and can afford higher quality clothing–rather than relinquish that customer to other retailers. I think this strategy is smart business and may work quite well for them, indeed. Ann Taylor does have a signature classic and professional “look.” Recreating this look in top tier cuts, linings and fabrics should please the higher end customer while still giving her easy access to the cottons and poly blends she has been buying and loves from AT. It is good to remember that this “movin’ on up” with your customer is not an altogether new concept. Many department stores (such as the late and much lamented Marshall Field’s) successfully appealed to, and supplied, the “economic cradle to grave” shopper. Under one roof they had a budget floor for entry level shoppers; throughout the store were vast selections at varying price points; and then there was the ultimate “28 shop” with its Yves St Laurent, Dolce and… Read more »
Janet Dorenkott
Guest
Janet Dorenkott
14 years 8 months ago

Ann Taylor has always offered a nice selection of clothing for their customers. As one of their customers, I think they will be successful at this endeavor. The reason? They are not going too far out of their realm. They already have customers who like nice clothes. This will just give them more options. I don’t believe they will lose or confuse any of their customers. Those of us who know Ann Taylor shops, know that we can expect to find nice things. I think they will attract a few new customers, but for the most part this will have existing customers spending more.

Bonny Baldwin
Guest
Bonny Baldwin
14 years 8 months ago

I do see how the middle of the market could be a hard place to be for professional attire. For one thing, moderately priced offerings from stores like H&M and Target have gotten really, really strong. I sell high-end apparel to Boomer women every day, and I’d only caution that there are multiple segments within that demographic, and you have to understand which one or ones you’re marketing to. I actually see more Boomer women buying elegant, luxury CASUAL pieces–i.e. $600 soft, voluminous, heavy gauge knit cardigans–because they’re beyond the point where they have to be in an office in a suit every day. Some are retired or semi-retired at a relatively young age, and others consult, work from a home office, or call the shots in such a way that they can dress casually most of the time. They’ve worked really hard, and they relish being comfortable.

Michael Tesler
Guest
Michael Tesler
14 years 8 months ago
Being perceived as mainstream, middle, generic is the “kiss of death” in retailing today. If you are not edgy and unique than you’d better be upscale or ” low price”. Nobody wants the middle anymore, nobody wants to be the Gap…or Macy’s for that matter. Mainstream middle of the road traditional supermarkets are getting killed but better concepts (Trader Joe’s, Whole Foods, Wegmans, etc.) and lower priced (Wal-Mart, Costco, etc). Ann Taylor has made some missteps in the past by not being clear in terms of who they are targeting…is it 30 to 45 year old white collar working women? Are they fashion or are they classic? Do they want boomers or not? Are they moderate or are they “high price”? They need to focus and strategize. They decided years ago that they didn’t want to be a Talbots (at that time they decided to be younger and more fashionable) and that decision at that time made sense but now we all know what Talbots is (and isn’t) which is a good thing for a… Read more »
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