Women's apparel retailer

AnnTaylor

(ANN)

took a key step toward a revival Tuesday when it named a top merchant for its namesake division, boosting its shares 10%.

Road to Recovery?
AnnTaylor over a year

The New York-based company, which has suffered from profit warnings and fashion missteps, lured Kim Roy away from competitor

Liz Claiborne

(LIZ)

to become president of the

Ann Taylor

division. That post had been vacant since Patricia DeRosa

left in February following a second consecutive dismal holiday season. DeRosa's job included overseeing operations at

Ann Taylor Loft

, which sells more casual styles at lower prices than Ann Taylor's more conservative business attire. The job will essentially be split between Roy and a person to be named, the company said in an earlier announcement.

Many analysts and investors had been cautious on AnnTaylor stock in recent weeks, preferring to wait and see who would become the company's top merchant. Shares were up significantly following the announcement, rising $2.75 to close at $30.

Where's Ivory?

Roy joined Liz Claiborne in 1995 as vice president for merchandising and during the next few years took on added responsibilities. In her new position, she will be responsible for product design and merchandising and will report to Chief Executive J. Patrick Spainhour.

In a statement, Liz Claiborne Chief Executive Paul Charron said, "In due course, we will announce structural changes which reflect Kim's departure."

If Liz Claiborne's evolution under Roy's leadership is any guide, the hire could be just the tonic AnnTaylor needs to turn itself around. According to Candace Corlett, a partner at consulting firm

WSL Strategic Retail

, Claiborne has accomplished exactly what AnnTaylor must do: broaden its brand.

AnnTaylor has pigeonholed itself into a niche brand of conservative office wear, mainly for young, professional women, says Corlett, whose consulting firm doesn't count either Liz Claiborne or AnnTaylor as clients. The result, at least of late, has been a series of profit warnings and

disappointing same-store sales figures, which measure activity in shops open at least a year and are a key metric for gauging the health of retailers.

"With a niche, it's hard to sustain growth," she says. "That's what Liz was. But they have been able to leverage the brand across different aspects of a woman's life. That is what Kim will bring to AnnTaylor.

"AnnTaylor needs to expand its share of a woman's closet," she continues.

Split Decision

At least one investment bank,

Robertson Stephens

, upgraded its rating on AnnTaylor stock because of the news. Janet Kloppenburg, a Robertson Stephens analyst, raised her rating to buy from long-term attractive. (Her firm has had a banking relationship with AnnTaylor.)

One analyst, however, wasn't changing his outlook because Roy's influence on merchandise will likely not be seen until next spring, the season that most retailers are buying for now. "She's going to have very little influence over fall" merchandise, says Eliot Laurence, an analyst at

Jefferies

. (Laurence has a hold rating on AnnTaylor stock, and his firm doesn't have a banking relationship with the company.)

Still, he praised the move, saying, "At the end of the day, every apparel retailer is dependent on the merchant."

And AnnTaylor, without a top merchant for nearly three months, could be on the road to recovery.