UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
- - - ----
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 2, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
- - - ----
SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-10738
ANNTAYLOR STORES CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3499319
- - - ---------------------------- ---------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
142 West 57th Street, New York, NY 10019
- - - ----------------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
(212) 541-3300
---------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes X No ___.
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Outstanding as of
Class May 29, 1998
--------------------------- ------------------
Common Stock, $.0068 par value 25,643,555
==========================================================================
<PAGE 2>
INDEX TO FORM 10-Q
Page No.
-------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Operations
for the Quarters Ended May 2, 1998
and May 3, 1997....................................... 3
Condensed Consolidated Balance Sheets at
May 2, 1998 and January 31, 1998...................... 4
Condensed Consolidated Statements of Cash Flows
for the Quarters Ended May 2, 1998 and
May 3, 1997........................................... 5
Notes to Condensed Consolidated Financial Statements.... 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................ 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.................................... 14
Item 5. Other Information.................................... 14
Item 6. Exhibits and Reports on Form 8-K..................... 15
========================================================================
<PAGE 3>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ANNTAYLOR STORES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Quarters Ended May 2, 1998 and May 3, 1997
(unaudited)
Quarters Ended
------------------------
May 2, 1998 May 3, 1997
----------- -----------
(in thousands, except
per share amounts)
Net sales....................................... $198,170 $197,064
Cost of sales................................... 96,836 98,428
------- -------
Gross profit.................................... 101,334 98,636
Selling, general and administrative expenses.... 81,129 76,637
Amortization of goodwill........................ 2,760 2,760
------- -------
Operating income................................ 17,445 19,239
Interest expense................................ 4,727 5,546
Other expense, net.............................. 180 250
------- -------
Income before income taxes...................... 12,538 13,443
Income tax provision............................ 6,119 6,968
------- -------
Net income.................................... $ 6,419 $ 6,475
======= =======
Basic and diluted earnings per share............ $ 0.25 $ 0.25
======= =======
See accompanying notes to condensed consolidated financial statements.
========================================================================
<PAGE 4>
ANNTAYLOR STORES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
May 2, 1998 and January 31, 1998
May 2, 1998 Jan. 31,1998
----------- ------------
(unaudited)
(in thousands)
ASSETS
Current assets
Cash and cash equivalents....................... $ 36,706 $ 31,369
Accounts receivable, net........................ 65,597 60,211
Merchandise inventories......................... 110,188 97,234
Prepaid expenses and other current assets....... 20,918 21,291
------- -------
Total current assets.......................... 233,409 210,105
Property and equipment, net........................ 140,251 139,610
Goodwill, net...................................... 327,979 330,739
Deferred financing costs, net...................... 972 1,258
Other assets....................................... 1,920 1,949
------- -------
Total assets.................................. $704,531 $683,661
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable................................ $ 46,531 $ 38,185
Accrued tenancy................................. 6,815 6,727
Accrued expenses................................ 47,637 41,893
Current portion of long-term debt............... 1,148 1,119
------- -------
Total current liabilities..................... 102,131 87,924
Long-term debt..................................... 104,856 105,157
Other liabilities.................................. 10,513 10,082
Commitments and contingencies
Company-Obligated Mandatorily Redeemable
Convertible Preferred Securities
of Subsidiary, AnnTaylor Finance Trust,
Holding Solely Convertible Debentures........... 96,449 96,391
Stockholders' equity
Common stock, $.0068 par value;
40,000,000 shares authorized;
25,657,590 shares issued........................ 174 174
Additional paid-in capital....................... 350,647 350,647
Warrants to acquire 2,814 shares
of common stock................................ 46 46
Retained earnings................................ 40,565 34,204
Deferred compensation on restricted stock........ (604) (737)
------- -------
390,828 384,334
Treasury stock, 14,035 and
12,659 shares, respectively,
at cost....................................... (246) (227)
------- -------
Total stockholders' equity..................... 390,582 384,107
------- -------
Total liabilities and stockholders' equity..... $704,531 $683,661
======= =======
See accompanying notes to condensed consolidated financial statements.
===============================================================================
<PAGE 5>
ANNTAYLOR STORES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Quarters Ended May 2, 1998 and May 3, 1997
(unaudited)
Quarters Ended
------------------------
May 2, 1998 May 3, 1997
----------- -----------
(in thousands)
Operating activities:
Net income............................................ $ 6,419 $ 6,475
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loss on accounts receivable........... 331 409
Depreciation and amortization....................... 7,053 6,965
Amortization of goodwill............................ 2,760 2,760
Non-cash interest................................... 286 391
Amortization of deferred compensation............... 133 263
Loss on disposal of property and equipment.......... 201 ---
(Increase) decrease in:
Receivables....................................... (5,717) (192)
Merchandise inventories........................... (12,954) 2,675
Prepaid expenses and other current assets......... 373 417
Increase (decrease) in:
Accounts payable.................................. 8,346 (1,239)
Accrued liabilities............................... 5,832 10,573
Other non-current assets and liabilities, net..... 456 612
------- -------
Net cash provided by operating activities............. 13,519 30,109
Investing activities:
Purchases of property and equipment................... (7,891) (6,500)
------- -------
Net cash used by investing activities................. (7,891) (6,500)
Financing activities:
Payments on mortgage.................................. (272) (70)
Proceeds from exercise of stock options............... --- 426
Repurchase of restricted stock........................ (19) ---
------- -------
Net cash (used by) provided by financing activities... (291) 356
------- -------
Net increase in cash................................... 5,337 23,965
Cash and cash equivalents, beginning of period......... 31,369 7,025
------- -------
Cash and cash equivalents, end of period............... $ 36,706 $ 30,990
======= =======
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for interest.............. $ 2,389 $ 2,932
======= =======
Cash paid during the period for income taxes.......... $ 2,920 $ 1,073
======= =======
See accompanying notes to condensed consolidated financial statements.
==============================================================================
<PAGE 6>
ANNTAYLOR STORES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Basis of Presentation
----------------------
The condensed consolidated financial statements are unaudited
but, in the opinion of management, contain all adjustments (which
are of a normal recurring nature) necessary to present fairly the
financial position, results of operations and cash flows for the
periods presented. All significant intercompany accounts and
transactions have been eliminated.
The results of operations for the 1998 interim period shown in
this report are not necessarily indicative of results to be
expected for the fiscal year.
The January 31, 1998 condensed consolidated balance sheet
amounts have been derived from the previously audited
consolidated balance sheet of AnnTaylor Stores Corporation ("the
Company").
Certain fiscal 1997 amounts have been reclassified to conform
to the 1998 presentation.
Detailed footnote information is not included for the quarters
ended May 2, 1998 and May 3, 1997. The financial information set
forth herein should be read in conjunction with the Notes to the
Company's Consolidated Financial Statements contained in the
AnnTaylor Stores Corporation 1997 Annual Report to Stockholders.
2. Net Income Per Share
--------------------
In Fiscal 1997, the Company adopted Statement of Financial
Accounting Standards No. 128, "Earnings per Share" ("SFAS No.
128") which specifies the computation, presentation and
disclosure requirements for basic and diluted earnings per share.
Basic earnings per share is calculated by dividing net income by
the weighted average number of common shares outstanding during
the period. Diluted earnings per share includes the addition of
potential common shares issued assuming the conversion of all
outstanding warrants and stock options, as follows:
Quarters Ended
---------------------------------------------
May 2, 1998 May 3, 1997
-------------------- ---------------------
(in thousands, except per share amounts)
Per Per
Share Share
Income Shares Amount Income Shares Amount
------- ------ ------ ------- ------ ------
Basic Earnings per Share
- - - ------------------------
Income available to
common stockholders.......... $ 6,419 25,644 $0.25 $ 6,475 25,600 $0.25
Effect of Dilutive Securities
- - - -----------------------------
Warrants....................... --- 3 --- --- 3 ---
Stock Options.................. --- 36 --- --- 95 ---
------ ------ ---- ------ ------ ----
Diluted Earnings per Share
- - - --------------------------
Income available to common
stockholders................. $ 6,419 25,683 $0.25 $ 6,475 25,698 $0.25
====== ====== ==== ====== ====== ====
================================================================================
<PAGE 7>
ANNTAYLOR STORES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Conversion of the preferred securities into common stock is
not included in the computation of diluted earnings per share for
the quarters ended May 2, 1998 and May 3, 1997 due to the
antidilutive effect of the conversion.
3. Long-Term Debt
--------------
The following summarizes long-term debt outstanding at May 2,
1998:
(in thousands)
8-3/4% Notes......................... $100,000
Mortgage............................. 6,004
-------
Total debt........................ 106,004
Less current portion................. 1,148
-------
Total long-term debt.............. $104,856
=======
On May 7, 1998, AnnTaylor, Inc. ("Ann Taylor") signed a
commitment for a new $150,000,000 senior secured revolving credit
facility (the "New Facility"). This New Facility will replace
the $122,000,000 credit facility scheduled to expire in July, and
will also result in the termination of the $50,000,000 credit
facility maintained by the Company's sourcing division and the
non-renewal of the $40,000,000 accounts receivable financing
facility.
The New Facility will have a term of two years, and will
include an automatic one-year extension, contingent upon the
satisfaction of certain conditions. The New Facility will be
used by Ann Taylor for the issuance of commercial and standby
letters of credit and to provide revolving loans for other
general corporate purposes.
Maximum availability under the New Facility will be governed
by a monthly borrowing base amount as determined through the
application of advance rates against certain eligible assets.
Additionally, the New Facility contains financial and other
covenants, including a cleandown provision.
The amounts outstanding under the New Facility will bear
interest at a rate equal to, at Ann Taylor's option, the Bank of
America (1) Base Rate, or (2) Eurodollar Rate. In addition, Ann
Taylor is required to pay the lenders a quarterly commitment fee
on the unused revolving loan commitment.
=======================================================================
<PAGE 8>
ANNTAYLOR STORES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Under the terms of the New Facility, the lenders will obtain a
perfected first priority lien and security interest in (i) the
capital stock of Ann Taylor and certain subsidiaries; (ii) all
tangible and intangible assets, including accounts receivable,
trademarks, inventory, store furniture and fixtures of Ann Taylor
and its subsidiaries.
The New Facility is subject to negotiation and execution of a
credit agreement and related documentation. Ann Taylor
anticipates closing on the New Facility in June.
4. Change in Accounting Principle
------------------------------
Effective February 1, 1998, the Company elected to change its
method of inventory valuation from the retail method to the
average cost method. The Company believes the cost method is a
preferable method for matching the cost of merchandise with the
revenues generated. The cumulative effect of this accounting
change as of February 1, 1998 was immaterial, and therefore no
disclosure is noted on the condensed consolidated statement of
operations for the quarter ended May 2, 1998. It is not possible
to determine the effect of the change on income in any previously
reported fiscal periods.
======================================================================
<PAGE 9>
Item 2. Management's Discussion and Analysis of Financial Condition and
----------------------------------------------------------------
Results of Operations
---------------------
Results of Operations
- - - ---------------------
Quarters Ended
--------------------------
May 2, 1998 May 3, 1997
----------- -----------
Number of Stores:
Open at beginning of period............... 324 309
Opened during period...................... 16 2
Expanded during period*................... 2 ---
Closed during period...................... 1 ---
Open at end of period..................... 339 311
Type of Stores Open at End of Period:
Ann Taylor stores...................... 291 261
Ann Taylor Factory Stores.............. 14 14
Ann Taylor Loft stores................. 34 27
Ann Taylor Studio stores............... --- 9
- - - --------------------
* Expanded stores are excluded from comparable store sales for
the first year following expansion.
Quarter Ended May 2, 1998 Compared to Quarter Ended May 3, 1997
- - - ---------------------------------------------------------------
The Company's net sales in the first quarter of 1998 increased
to $198,170,000 from $197,064,000 in the first quarter of 1997,
an increase of $1,106,000 or 0.6%. This increase is attributable
to the opening of new stores and the expansion of existing
stores, offset by a decrease in comparable store sales of 5.5%.
Management believes that the decrease in comparable store sales
was principally attributable to lower customer acceptance of
certain of the Company's first quarter merchandise offerings, as
well as to an acceleration of the Company's end-of-fall season
clearance sale, held in February of the prior year, to January in
1998.
Gross profit as a percentage of net sales increased to 51.1%
in the first quarter of 1998 from 50.1% in the first quarter of
1997. This increase was primarily due to a change in the
accounting method by which the Company accounts for inventory,
from the retail method to the average cost method.
Selling, general and administrative expenses represented 40.9%
of net sales in the first quarter of 1998, compared to 38.9% of
net sales in the first quarter of 1997. The increase in selling,
general, and administrative expenses as a percentage of net sales
was primarily attributable to decreased leverage on fixed
expenses resulting from lower comparable store sales and
increased investments in marketing.
========================================================================
<PAGE 10>
As a result of the foregoing, the Company had operating income
of $17,445,000, or 8.8% of net sales, in the first quarter of
1998, compared to operating income of 19,239,000, or 9.8% of net
sales, in the first quarter of 1997. Amortization of goodwill
was $2,760,000 in both the first quarter of 1998 and the first
quarter of 1997. Operating income, without giving effect to
goodwill amortization in either year, was $20,205,000, or 10.2%
of net sales, in the first quarter of 1998 and $21,999,000, or
11.2% of net sales, in the first quarter of 1997.
Interest expense was $4,727,000 in the first quarter of 1998
and $5,546,000 in the first quarter of 1997. The decrease in
interest expense is attributable to reduced outstanding
indebtedness in the first quarter of 1998 compared to the first
quarter of 1997.
The income tax provision was $6,119,000, or 48.8% of income
before income taxes, in the first quarter of 1998 compared to
$6,968,000, or 51.8% of income before income taxes, in the first
quarter of 1997. This decrease is attributable to a reduction in
the Company's effective income tax rate from 43% to 40%, which
was due to increased income earned outside the United States by
the Company's non-U.S. sourcing subsidiaries. The effective
income tax rate for both periods differed from the statutory rate
primarily because of non-deductible goodwill amortization.
As a result of the foregoing factors, the Company had net
income of $6,419,000, or 3.2% of net sales, for the first quarter
of 1998, compared to net income of $6,475,000, or 3.3% of net
sales, for the first quarter of 1997.
AnnTaylor Stores Corporation conducts no business other than
the management of Ann Taylor.
Financial Condition
- - - --------------------
For the first quarter of 1998, net cash provided by operating
activities totaled $13,519,000, primarily as a result of net
income, non-cash operating expenses and an increase in current
liabilities, partially offset by an increase in current assets.
Cash used by investing activities during the first quarter of
1998 amounted to $7,891,000, for the purchase of property and
equipment. Cash used by financing activities during the first
quarter of 1998 amounted to $291,000, primarily as a result of
scheduled payments on the mortgage loan.
Merchandise inventories were $110,188,000 at May 2, 1998,
compared to inventories of $97,234,000 at January 31, 1998.
Merchandise inventories at May 2, 1998 and January 31, 1998
included approximately $10,605,000 and $21,124,000, respectively,
of inventory associated with the Company's sourcing division.
===================================================================
<PAGE 11>
At May 2, 1998, there were no borrowings outstanding under Ann
Taylor's revolving credit facility or under AnnTaylor Funding,
Inc.'s receivables facility. Ann Taylor can borrow up to
$122,000,000 under the revolving credit facility. Outstanding
commercial and standby letters of credit under the revolving
credit facility totaled $36,025,000. AnnTaylor Funding, Inc. was
permitted to borrow up to $40,000,000 under the receivables
facility, which expired on May 4, 1998 and has not been renewed.
Also, as of May 2, 1998, commercial and standby letters of credit
under AnnTaylor Global Sourcing, Inc.'s $50,000,000 credit
facility totaled $22,289,000 and there were no borrowings
outstanding under that facility. This facility, which matures on
July 29, 1998, is available principally for the issuance of
letters of credit; cash borrowings under the facility are limited
to a maximum of $5,000,000. In addition, the Company has
outstanding an aggregate of $100,625,000 of convertible preferred
securities issued by its financing vehicle, AnnTaylor Finance
Trust.
On May 7, 1998, AnnTaylor, Inc. ("AnnTaylor") signed a
commitment for a new $150,000,000 senior secured revolving credit
facility (the "New Facility"). This New Facility will replace
the $122,000,000 credit facility scheduled to expire in July, and
will also result in the termination of the $50,000,000 credit
facility maintained by the Company's sourcing division and the
non-renewal of the $40,000,000 accounts receivable financing
facility.
The New Facility will have a term of two years, and will
include an automatic one-year extension, contingent upon the
satisfaction of certain conditions. The New Facility will be
used by Ann Taylor for the issuance of commercial and standby
letters of credit and to provide revolving loans for other
general corporate purposes.
Maximum availability under the New Facility will be governed
by a monthly borrowing base amount as determined through the
application of advance rates against certain eligible assets.
Additionally, the New Facility contains financial and other
covenants, including a cleandown provision.
The amounts outstanding under the New Facility will bear
interest at a rate equal to, at Ann Taylor's option, the Bank of
America (1) Base Rate, or (2) Eurodollar Rate. In addition, Ann
Taylor is required to pay the lenders a quarterly commitment fee
on the unused revolving loan commitment.
Under the terms of the New Facility, the lenders will obtain a
perfected first priority lien and security interest in (i) the
capital stock of Ann Taylor and certain subsidiaries; (ii) all
tangible and intangible assets, including accounts receivable,
trademarks, inventory, store furniture and fixtures, of Ann
Taylor and its subsidiaries.
======================================================================
<PAGE 12>
The New Facility is subject to negotiation and execution of a
credit agreement and related documentation. Ann Taylor
anticipates closing on the New Facility in June.
The Company's capital expenditures, which are primarily
attributable to the Company's store expansion, renovation and
refurbishment programs, totaled $7,891,000 in the first quarter
of 1998. The Company expects to open a total of 26 new Ann
Taylor Stores and 18 new Ann Taylor Loft stores, relocate 7 Ann
Taylor Stores and expand 1 existing Ann Taylor Store in fiscal
1998. Total capital expenditures for 1998 are expected to be
approximately $52,000,000. The Company believes that the New
Facility will allow for such expenditures.
Dividends and distributions from Ann Taylor to the Company are
restricted by the terms of the credit agreements relating to the
revolving credit facility and the receivables facility and the
Indenture for AnnTaylor, Inc.'s 8-3/4% Notes due 2000. The payment
of cash dividends by the Company on its capital stock is also
subject to certain restrictions contained in the Company's
guarantee of Ann Taylor's obligations under its bank credit
agreement. It is expected that the payment of dividends and
distributions will also be restricted under the New Facility.
Any determination to pay cash dividends in the future will be at
the discretion of the Company's Board of Directors and will be
dependent upon the Company's results of operations, financial
condition, contractual restrictions and other factors deemed
relevant at that time by the Company's Board of Directors.
In order to finance its operations and capital requirements,
the Company expects to use internally generated funds, trade
credit and funds available to it under the credit facilities
described above. The Company believes that cash flow from
operations and funds available under these facilities are
sufficient to enable it to meet its on-going cash needs for its
business, as presently conducted, for the foreseeable future.
Statement Regarding Forward Looking Disclosures
- - - -----------------------------------------------
Sections of this Quarterly Report on Form 10-Q, including the
preceding Management's Discussion and Analysis of Financial
Condition and Results of Operations, contain various forward
looking statements, within the meaning of the Private Securities
Litigation Reform Act of 1995, with respect to the financial
condition, results of operations and business of the Company.
Examples of forward-looking statements are statements that use
the words "expect", "anticipate", "plan", "believe" and similar
expressions. These forward looking statements involve certain
risks and uncertainties, and no assurance can be given that any
of such matters will be realized. Actual results may differ
materially from those contemplated by such forward looking
statements as a result of, among other things, failure by the
Company to accurately predict customer fashion preferences; a
decline in the demand for merchandise offered by the Company;
======================================================================
<PAGE 13>
competitive influences; levels of store traffic; effectiveness
of the Company's brand awareness and marketing programs;
general economic conditions that are less favorable than
expected; the inability of the Company to locate new store
sites or negotiate favorable lease terms for additional
stores or for the expansion of existing stores; a significant
change in the regulatory environment applicable to the Company's
business; an increase in the rate of import duties or export
quotas with respect to the Company's merchandise; an adverse
outcome of certain litigation described under "Legal Proceedings"
in the Company's Annual Report on Form 10-K for the fiscal year
ended January 31, 1998 that materially and adversely affects the
Company's financial condition; or lack of sufficient customer
acceptance of the Ann Taylor Loft concept in the moderate-priced
women's apparel market. The Company assumes no obligation to
update or revise any such forward-looking statements, even if
experience or future events or changes make it clear that any
projected financial or operating results implied by such forward-
looking statements will not be realized.
======================================================================
<PAGE 14>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
- - - --------------------------
As previously disclosed in the Company's Annual Report on
Form 10-K filed with the Securities and Exchange Commission
on April 30, 1998, the Company, Ann Taylor, certain current
and former officers and directors of the Company and Ann Taylor,
and Merrill Lynch & Co. and certain of its affiliates, are
defendants in a purported class action lawsuit filed on
April 26, 1996 by certain alleged stockholders of the Company
in the United States District Court for the Southern District
of New York. (Novak v. Kasaks, et. al., No. 96 CIV 3073
(S.D.N.Y. 1996)). On March 10, 1998, the Court granted the
defendants' motions to dismiss the complaint. The Court
found that the complaint failed to state a claim upon which
relief may be granted, and failed to plead fraud with
particularity. The Court's opinion granted the plaintiffs
leave to amend and re-file the complaint within thirty days
of the date of the opinion and an amended complaint was
filed by the plaintiffs on April 9, 1998. The Company
believes that the amended complaint is without merit and
intends to continue to defend the action vigorously.
Defendants have served the plaintiffs with motions to dismiss
the amended complaint and briefing on these motions is now
underway. As the case is in preliminary stages, any liability
that may arise from this action cannot be predicted at this time.
Item 5. Other Information
- - - --------------------------
Effective June 12, 1998, the size of the Company's Board of
Directors was increased from seven to eight members, and Ronald
W. Hovsepian was elected by the Board to fill the vacancy so
created and to serve as a Class II director for a term expiring
in 1999 concurrent with the other Class II directors. Mr. Hovsepian
is currently the General Manager of the IBM Corporation's
Global Retail and Distribution Industry Solutions organization.
He has served in various capacities at IBM since 1983, including
Business Unit Executive for the Retail Industry, and Vice
President of the Consumer Driven Supply Chain Solutions unit.
============================================================================
<PAGE 15>
Item 6. Exhibits and Reports on Form 8-K
- - - -------------------------------------------
(a) Exhibits:
10.16.3 Amendment to the AnnTaylor Stores Corporation
Amended and Restated 1992 Stock Option and
Restricted Stock and Unit Award Plan dated as
of May 12, 1998.
10.27 Commitment Letter dated as of May 7, 1998
among Ann Taylor, Bank of America National
Trust and Savings Association, BancAmerica
Robertson Stephens, Citicorp USA and
CoreStates Bank, N.A.
18 Preferability letter relating to the change
in accounting principle
27 Financial Data Schedule
(b) Reports on Form 8-K:
None.
============================================================================
<PAGE 16>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
AnnTaylor Stores Corporation
Date: June 16, 1998 By: /s/ J. Patrick Spainhour
------------------ -------------------------
J. Patrick Spainhour
Chairman and Chief Executive
Officer
Date: June 16, 1998 By: /s/ Walter J. Parks
----------------- -------------------------
Walter J. Parks
Senior Vice President and
Chief Financial Officer