S&P drops Ann Taylor outlook to negative

Standard & Poor's said it revised its outlook on Ann Taylor Inc. to negative from stable.

At the same time, the agency said it affirmed its BB- corporate credit rating on the company.

"The outlook revision is due to Ann Taylor's very weak third-quarter performance," said S&P credit analyst Jackie E. Oberoi, "including net sales that declined 12% from the third quarter of 2007."

The agency added that it expects continued soft performance through the fourth quarter, which is likely to result in credit metrics that will be weak for the rating, including leverage of more than 3x.

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