Golden Gate Capital buys 9.5 percent stake in Ann

Private equity firm Golden Gate has announced the acquisition of a 9.5 percent

stake said in Ann, the group that owns Ann Taylor and Loft brands. Commenting the deal, Golden Gate said it believed the company's stock was undervalued.

In a regulatory filing registered Thursday, the new investor said it owned about 4.4 million shares of Ann, making it the company's largest shareholder. On the wake of the news, shares of Ann rose 10 percent to 41 dollars in extended trading.

The private equity firm based in San Francisco, looks forward to working "collaboratively and constructively" with Ann as a long-term public investor, it said in a letter to Ann executives. "Ann is a great business, with a thoughtful strategy, led by an extremely competent management team who has a long track record of success," Golden Gate said in the letter.

"We also believe that the company's stock is significantly undervalued, especially in light of today's robust equity environment."

Stock investors snapped up shares of retailers in the past year, amid signs of a US economic recovery and improving employment. The Standard & Poor's Retailing Index has jumped 28 percent over the past year, and reached a record this month. That compares with a 20 percent return for Ann over the past 12 months.

"We do not invest with the intention to put companies 'in play' or to change management or directors," Golden Gate said in the letter.

Earlier this month, Ann recorded profit in the quarter ended Feb. 1 of 10 cents a share, ahead the 7 cents analysts predicted. Sales at stores open at more than a year including online sales rose 2.9 percent in the fourth quarter, missing estimates for a 3.3 percent increase, according to data compiled by Bloomberg.