Retailer Ann signs confidentiality agreement with Golden Gate

Ann’s shares were up about 7.4 percent at $39.50 in after market trading on Tuesday, Oct. 14.

Ann said that Tuesday that it had engaged in “a collaborative, constructive dialogue” with Golden Gate.

Golden Gate, which had a 9.56 percent stake in the retailer as of Oct. 14, said “it would be beneficial to continue discussions on a more detailed basis.” 

The investment firm had said in March that it believed Ann’s stock was significantly undervalued. 

Ann said in August that it expected third-quarter same-store sales growth to be flat to slightly negative. 

The company’s second-quarter same store sales fell 2.3 percent from a year earlier, hurt by weaker traffic at its Loft chain.

Last month, hedge funds Red Alder LLC and Engine Capital urged Ann to consider selling itself to a private equity firm or another apparel company, stepping up pressure on the company to improve its performance.

Reporting by Shubhankar Chakravorty of Reuters news service in Bangalore