Ann Taylor Expands Strategic Restructuring Program; Now Expects To Achieve Approximately...

Ann Taylor Expands Strategic Restructuring Program; Now Expects To Achieve
Approximately $125 Million in Annual Savings
Company Provides Update for Second Quarter 2009

NEW YORK, July 30 /PRNewswire-FirstCall/ -- AnnTaylor Stores Corporation
(NYSE: ANN) today said that it is expanding its previously announced
restructuring initiatives and taking further actions to reduce the Company's
cost structure and improve profitability. These actions build upon the
Company's multi-year strategic restructuring program that was first announced
in January 2008. The Company also provided an update on its expectations for
the second quarter period ending August 1, 2009.

Based on the expanded program, the Company now expects to generate ongoing
annualized savings totaling approximately $125 million over the three-year
program period ending in fiscal 2010, compared to the $85-$95 million in
savings previously anticipated. Approximately $40 million of these savings
were generated in fiscal 2008, an incremental $60 million are expected to be
realized in the current fiscal year, and the remainder are expected in fiscal
2010.

Kay Krill, Ann Taylor President and Chief Executive Officer stated, "Since we
began our strategic restructuring program in January 2008, our goal has been
to build a more effective and efficient operational foundation that supports
future growth and improved profitability over the long term. In light of the
current environment, and encouraged by the process improvements and
efficiencies we have achieved to-date, we have now identified additional
opportunities to further reduce our SG&A cost structure, while improving our
efficiency and profitability. These additional steps are expected to generate
approximately $30 million in incremental annualized savings over our previous
range. At the same time, we continue to be focused on delivering compelling
product and exceptional value to our clients."

The actions announced today include, among other things, further right-sizing
of the Company's corporate and divisional organization, changes to our field
staffing, expansion of the Company's strategic non-merchandise procurement
initiative, and further optimization of the Company's real estate portfolio.

Total pre-tax restructuring costs associated with the Company's multi-year
program are now expected to be in the range of $130-$140 million,
approximately $92 million of which have already been incurred. These costs
include the $95-100 million previously anticipated under the program, plus
incremental one-time costs of approximately $35-$40 million. Of these
incremental costs, the majority of which are expected to be incurred in the
second quarter of 2009, approximately $20-25 million are expected to be
non-cash costs related to the optimization of our real estate portfolio and
approximately $15 million are expected to be cash costs associated primarily
with the further streamlining of the organization.

Update on Second Quarter Expectations
With respect to the second quarter ended August 1, 2009, the Company indicated
that it expects to report sales of approximately $470 million. Comparable
store sales for the second quarter 2009 will continue to reflect weakness,
primarily at the Ann Taylor division.

The Company anticipates its gross margin rate for the second quarter to be in
line with the gross margin rate achieved in the second quarter of 2008, while
selling, general and administrative expenses are expected to reflect a slight
improvement versus the previous outlook of $245 million.

As a result of stronger-than-expected sales and continued cost savings related
to its strategic restructuring program, the Company expects its second-quarter
earnings per diluted share, excluding restructuring and non-cash impairment
costs, to be slightly better than breakeven.

The Company noted that it expects to close the fiscal second quarter with cash
and cash equivalents totaling approximately $125 million, excluding any
borrowings under its revolving credit facility, compared with the $112 million
and $74 million in cash and cash equivalents reported at fiscal year-end 2008
and fiscal first quarter-end 2009, respectively, on the same basis.

About Ann Taylor
Ann Taylor Stores Corporation is one of the leading women's specialty
retailers for fashionable clothing in the United States, operating 939 Ann
Taylor, LOFT, Ann Taylor Factory, and LOFT Outlet stores in 46 states, the
District of Columbia and Puerto Rico as of May 2, 2009, as well as online at
AnnTaylor.com and AnnTaylorLOFT.com. Visit AnnTaylorStoresCorp.com for more
information (NYSE: ANN).

FORWARD-LOOKING STATEMENTS

Certain statements in this press release are forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. The forward-looking statements may use the words
"expect", "anticipate", "plan", "intend", "project", "may", "believe" and
similar expressions. Forward-looking statements also include representations
of the expectations or beliefs of the Company concerning future events that
involve risks and uncertainties, including:

-- the Company's ability to achieve the results of its restructuring
program, including the risk that the benefits expected from the
restructuring program will not be achieved or may take longer to
achieve
than expected;
-- changes in management's assumptions and projections concerning
costs and timing in execution of the restructuring program;
-- general economic conditions and the current financial crisis,
including
the effect on the Company's liquidity and capital resources, and a
downturn in the retail industry;
-- the behavior of financial markets, including fluctuations in interest
rates and the value of the U.S. dollar against foreign currencies, or
restrictions on the transfer of funds;
-- continuation of lowered levels of consumer spending, changes in
levels
of store traffic, lowered levels of consumer confidence and higher
levels of unemployment resulting from the worldwide economic downturn;
-- the commercial and consumer credit environment;
-- continued volatility and further deterioration of the capital markets;
-- fluctuation in the Company's level of sales and earnings growth and
stock price;
-- the Company's ability to realize deferred tax assets and the effect
of external economic factors on the Company's future funding
obligations for its defined benefit pension plan;
-- competitive influences and decline in the demand for merchandise
offered
by the Company, and the Company's ability to manage inventory
levels;
-- the Company's ability to manage the profitability of its existing
stores, effectively renew or re-negotiate the terms of existing store
leases, or locate new store sites or negotiate favorable lease terms
for
additional stores;
-- risks associated with the bankruptcy or significant deterioration of
one
or more of our major national retail landlords;
-- the Company's ability to predict accurately client fashion
preferences;
-- effectiveness of the Company's brand awareness and marketing
programs, and its ability to maintain the value of its brands;
-- the Company's ability to successfully execute brand extensions and
new concepts;
-- the Company's ability to secure and protect trademarks and other
intellectual property rights in the United States and/or foreign
countries;
-- risks associated with the performance and operations of the
Company's Internet operations;
-- a significant change in the regulatory environment applicable to the
Company's business and the Company's ability to comply with
legal and regulatory requirements;
-- risks associated with the possible inability of the Company,
particularly through its sourcing and logistics functions, to operate
within production and delivery constraints and the Company's
dependence on a single distribution facility;
-- the uncertainties of sourcing associated with the current quota
environment, including changes in sourcing patterns resulting from the
imposition of legislation relating to import quotas or other possible
trade law or import restrictions;
-- risks associated with the Company's reliance on foreign sources of
production, including financial or political instability in any of the
countries in which the Company's goods are manufactured and
supplier inability to obtain adequate credit or access to liquidity to
finance operations;
-- risks associated with a failure by independent manufacturers to comply
with the Company's quality, product safety and social practices
requirements;
-- the potential impact of natural disasters and public health concerns,
including severe infectious diseases, particularly on the Company's
foreign sourcing offices and manufacturing operations of the
Company's vendors;
-- acts of war or terrorism in the United States or worldwide;
-- work stoppages, slowdowns or strikes;
-- the Company's ability to hire, retain and train key personnel;
-- the Company's ability to successfully upgrade and maintain its
information systems, including adequate system security controls; and

-- the Company's ability to continue operations in accordance with its
business continuity plan in the event of an interruption.

Further description of these risks and uncertainties and other important
factors are set forth in the Company's latest Annual Report on Form 10-K,
including but not limited to Item 1A - Risk Factors and Item 7 - Management's
Discussion and Analysis of Financial Condition and Results of Operations
therein, and in the Company's other filings with the SEC. Although these
forward-looking statements reflect the Company's current expectations
concerning future events, actual results may differ materially from current
expectations or historical results. The Company does not assume any
obligation to publicly update or revise any forward-looking statements at any
time for any reason.

SOURCE AnnTaylor Stores Corporation

Investors, Judith Pirro, Director, Investor Relations, Ann Taylor Stores
Corporation, +1-212-541-3300 ext. 3598; or Media, Wendi Kopsick, Kekst and
Company Incorporated, +1-212-521-4867