Question-and-Answer Session
Operator
Your first question comes from Kimberly Greenberger - Citigroup Global Markets
Kimberly Greenberger - Citigroup Global Markets
Good morning Kay, I was very interested in your comments about reinventing the Ann Taylor division in a modern way and I was hoping you could just help us understand in a little bit more detail what that means and then just a follow-up for Mike, I’m not sure I heard you right, I think you said that performance compensation would be up in ’08 and I just was trying to reconcile that with the flat EPS guidance in ’08, thanks.
Kay Krill
Our strategy really has been directed on multiple fronts and first of all as I said earlier, we’ve been doing focus groups, client interviews and in-store feedback sessions and we’ve learned a tremendous amount that’s either validated our thinking or helped focus our efforts, but first and foremost product. Our clients’ product preferences have definitely evolved and we did not keep pace with her wants. She wants more modern and fashionable product that is versatile and current and we are all over that. We’ve infused more style into our assortments for the back half of the year and are going to continue to hyper focus on creating awesome assortments, especially in the categories that she loves and expects from us.
Second is our in-store environment. We feel like we’re not as clear or exciting in-store and we have too many SKUs or choices for her to wade through and she clearly told us that. We had already embarked on reducing our choices for fall but we’ve recently, more significantly scaled back for third and fourth quarters our SKUs and overall choices. We also feel like we have to be more authoritative and stand for key categories and market a new and evolved look for Ann. We have a clear action plan that we’ve already begun and we’re making progress in testing different elements and initiatives in a select group of stores.
And thirdly our marketing, our marketing in 2007 was not memorable to her and not compelling at all. She did not think it was modern. So we’re driving towards creating a more holistic campaign that are modern, chic and sophisticated and more aspirational overall. We have new creative talent at the company now and I am confident that they will significantly evolve our marketing efforts. So it’s really a three-prong approach. It’s not just about product and not just about the in-store environment. We’re taking a more holistic approach to evolving and elevating and modernizing the Ann Taylor brand definitely keeping within the guardrails of the updated classic umbrella. I don’t want any of you to think that we’re going off the deep end here. There is definitely a sandbox that we’re playing in; we’re just going to go up more towards the edge of that sandbox. So we’re all over it. We’ve heard from our clients and we’re actually, the good news is what we heard was she still has a tremendous affinity for the Ann Taylor brand and wants us to get it right and that is very positive news. So we are all over it and I think you’ll see more meaningful change in the back half of the year.
- To read the full transcript on Seeking Alpha, click here »
