The female students were crestfallen when I read this sentence in class from last weekend’s business section of The New York Times: “The company [Ann Taylor] also said it would change its name to ANN.”
Turns out the students have nothing to fear. The Times and many others in the press misread or misheard what the company said during its earnings call last week. It is the parent company, or “corporate,” that will now be known as ANN (stylized in all caps, thank you very much).
This is a classic case for the branding text books. Here is a company that started as a single operation, and 40-some years later developed a “line extension” called Ann Taylor LOFT (uh huh, all caps again). It was a stroke of genius, capitalizing on the trend in women’s slightly more casual wear, especially in the 1990’s workplace.
I’m not sure at what point Ann Taylor LOFT became simply LOFT, but a timeline on the corporate website indicates it created a separate “division” named Ann Taylor LOFT in 2001.
This event, seemingly a simple corporate schmorporate thing, should have been seen as a common brand management dynamic: the brand child growing too big for her female britches, leaving the brand parent to wonder “what do I do with her?”
Here’s why. LOFT has grown to a store count that nearly doubles that of Ann Taylor. In fact, in the past two years the company has changed around 15 Ann Taylor stores over to LOFT formats. In any case, LOFT is bringing in revenue at nearly twice the level of Ann Taylor stores. (The company declines to report profitability by brand, unfortunately).
LOFT is now a powerful brand in its own right. So how can her parent be called Ann Taylor? Hence the name change of “corporate” to ANN. (This would be a decision Gap would have to make, for example, if Banana Republic and Old Navy were strong enough brands.)
Brand hierarchy challenges are nice problem to have when you’re back to printing money like you were before the recession. ANN’s stock price is on a tear, and if we still had the Lairig Marketing index, we’d pick up 100 shares today.
Speaking of company stock, we should have seen this coming. Ann Taylor’s ticker symbol on Wall Street has always been, yup, you guessed it, “ANN.”