The private equity firm Golden Gate Capital prides itself on its retail expertise, having helped revive companies like Eddie Bauer and Zale. Now it thinks it can aid the parent of Ann Taylor.
The firm disclosed in a regulatory filing on Thursday that it had purchased a roughly 9.5 percent stake in Ann Inc., with the aim of bolstering the retailer’s stock price.
Golden Gate’s approach was unusual: The investment firm revealed its stake in what is known as a 13D filing, a form often used by activist hedge funds to indicate that they plan to shake up a company.
In a letter to Ann Inc.’s management, however, Golden Gate said that it did not plan to seek changes to the retailer’s board or executive team, or to push for a sale. (The deadline to nominate alternative directors passed earlier this month.)
The filing was a legal requirement, since the firm bought over 5 percent of the shares of Ann Inc., a publicly traded company, within the past 10 days.
With $12 billion of assets under management, Golden Gate has long made retailing investments one of its specialties. Among the store chains in which it owns at least a stake are Eddie Bauer, the outdoor gear seller; J. Jill, a clothier for middle-age women; and Payless ShoeSource.
Last fall, the firm agreed to help Jos. A. Bank, the men’s clothier, in its ill-fated effort to buy Men’s Wearhouse. Months later, Golden Gate struck a deal to sell Eddie Bauer to Jos. A. Bank, but that deal was scuttled after Jos. A. Bank instead agreed to merge with Men’s Wearhouse.
Golden Gate has a reputation for helping out distressed companies as well, having lent money to Zale, the jewelry chain, in exchange for warrants convertible into 25 percent of Zale stock at a price of $2 a share. That investment has paid off: Zale agreed last month to sell itself to Signet Jewelers for $21 a share.
Ann Inc., whose Ann Taylor brand is aimed at work wear for women while its Loft label aims for a trendier style, isn’t troubled. The company beat profit expectations all last year. Its shares have risen nearly 21 percent over the last 12 months.
Golden Gate emphasized that it had faith in Ann Inc.’s management, pointing out its investment in Ann Taylor stores and efforts to refresh its brand. The firm added that it supports the company’s strategy to bolster new store growth and productivity at existing stores, and is willing to lend its expertise.
Thursday’s letter did not come out of the blue. Golden Gate executives noted that they had held a discussion with Ann Inc.’s management earlier in the week.
“We have tremendous respect and admiration for you and your company, and we look forward to working with you as a meaningful, constructive, long-term investor,†executives at Golden Gate wrote.
