+ By Katie Yaeger Marketing 4250H Nov. 11, 2014 Most Admired Retailer

+ About LOFT Established in 1996 by ANN Inc. as Ann Taylor LOFT, an extension of the Ann Taylor brand. ANN Inc. brands offer “a feminine, polished approach to updated classic style.” More value-conscious and casual than Ann Taylor. Had 544 store locations in the U.S., Canada and Puerto Rico as of August 2014.

+ Retail Strategy Target market: 28- to 40- year-old fashion-forward, value-conscious female professionals. Location: Enclosed malls, lifestyle centers Assortment: A moderate amount of items in apparel; private labels Pricing strategy: Upper moderate with sales

+ Retail Strategy Communication mix: TV/magazine, online, mobile Store design/display: Neutral walls, free-form layout, displays, designated petite and sale areas Customer service: Modest Long-term sustainable competitive advantage: Quality, casual and fashionable professional wear at an affordable price

+ Private, house brands Merchandise consists only of private brands. Most merchandise is the LOFT brand. Lower-priced and more casual than the Ann Taylor brand. Had larger growth (8%) than Ann Taylor (1%) as of Q Launched activewear line Lou & Grey in 2014, sold in LOFT stores, online and at a few freestanding stores.

+ Supply Chain Advantages “The quality of our products begins with the treatment of the people who manufacture them.” Provides public with outline of policies and programs concerning workers’ rights and environmental protection. Emphasizes engaging with suppliers and supporting women throughout supply chain process (factories to suppliers to stores). Has one distribution center (in Louisville, Kentucky); is a zero-waste facility.

+ Pricing Strategy Price range: Upper-moderate Implements a high/low pricing strategy Almost always sale s or in- store/online specials.

+ Multichannel Marketing LOFT uses multichannel marketing fairly effectively. Brick-and-mortar: Combined inventory across stores and digital channel, sales Catalog: Shipped to homes Online: Easy-to-navigate website, s with sales and trends Mobile: Love LOFT loyalty program, ANN INC. BFF, mobile-optimized website

+ Retail Locations and Site Selection Urban and suburban areas where younger, upper-middle-class professionals live Enclosed malls and lifestyle centers

+ Store Layout Free-form layout Clothing segmented into areas: New arrivals Casual wear Business casual wear Petites (sign) Lou & Grey Sale (sign)

+ Store Design Promotional and point-of-sale signage Window and freestanding displays Entrance with “decompression zone” Utilized wall space Clean, well-lit, spacious, attended dressing rooms Cash wraps with jewelry and other accessories

+ Visual Merchandising Straight-rack, four-way and gondola fixtures Item and size presentation

+ Secret Shop Customer service: 3 Cashier sounded very bored; saleswoman asked if I was “still” finding everything OK; saleswoman was helpful in dressing room. Ease of finding items: 4 Sale section not well organized. Advertisement of price: 4 Sale specials well marked; dress had further, unmarked discount. Atmosphere: 5 Good lighting, relaxing, not cluttered

+ Banana Republic J.Crew LOFT’s Competition

+ Financial Results ANN Inc. (NYSE: ANN) Return on assets: Stock price (as of Nov. 10, 2014): $36.05 The Gap, Inc. (NYSE: GPS) Return on assets: Stock price (as of Nov. 10, 2014): $38.60 J. Crew Group, Inc. is a private company. ANN Inc. has a lower return on assets and stock price than The Gap, Inc.

+ SWOT Analysis Strengths Company brand recognition, association with quality Customer loyalty On top of trends Multichannel retailing Opportunities International expansion Beauty products Personal stylist Weaknesses Customer service Lack of formalwear Threats Imbalanced product mix (2013) Poor PR Reduced mall traffic

+ Marketing Tactic Problem: LOFT has gotten bad PR in recent months for manipulating photos to make models look skinnier. Solution: Eliminate digital manipulation and feature diverse women of all body types.

+ “Real Professionals” Campaign Highlight female professionals with different demographics and sizes — emphasize authenticity. Partner with the Love Your Body campaign.