* Shares up 2 percent

(Adds CEO comments, analyst comments, updates shares)

By Phil Wahba

NEW YORK (Reuters) - Women's clothing retailer
AnnTaylor Stores Corp said quarterly sales rebounded at
its namesake stores and it was able to sell more merchandise at
full price, sending shares up 2 percent.

Like other chains that cater to women over 35, such as
Talbots Inc and Chico's FAS Inc, Ann Taylor is
working to freshen up its fashions and turn around its fortunes
after struggling with weak sales for several quarters.

At the Ann Taylor chain, same-store sales rose 19.6 percent
in the second quarter, compared with a 38 percent tumble in the
same period a year ago. That helped boost overall comparable
sales, which include online purchases, by 6.1 percent.

Chief Executive Kay Krill said that skirts and suits for
the workplace had been selling especially well at Ann Taylor.

"Women are re-entering the workforce and I think that that
is going to be very important for the Ann Taylor brand and we
are top of mind for that," Krill said on a conference call with

Wedbush analyst Betty Chen said Ann Taylor had greatly
improved its wear-to-work merchandise compared with last year,
drawing shoppers needing to update their professional wardrobe
from rivals.

"(It's) become a much higher priority destination" for
women shoppers, Chen said.

The company expects momentum to continue even as the wider
retail industry faces soft consumer demand.

It forecast total sales of $495 million and a "high-to-mid
single digit" percentage increase in comparable sales in the
current quarter.

The company announced an increase in its share buyback
program to $400 million, and Chief Financial Officer Michael
Nicholson said it considers its shares to be undervalued.

Shares were up 32 cents or 2.1 percent at $15.79 on Friday
morning on the New York Stock Exchange. AnnTaylor shares have
lost about 37 percent of their value since May 5, when they hit
a yearly high of $25.24.

Total sales rose nearly 2.8 percent to $483.5 million, but
fell short of analysts' expectations of $503.3 million,
according to Thomson Reuters I/B/E/S.

Net income was $18.6 million, or 31 cents per share, in the
second quarter ended July 31, compared with a year-earlier loss
of $18 million, or 32 cents per share.

Excluding a restructuring charge, the company earned 32
cents per share, in line with analysts' forecasts, according to
Thomson Reuters I/B/E/S.

Internet sales also gave the company a boost. At the more
casual and less expensive LOFT division, a 54.6 percent jump in
online revenue made up for a 3.1 percent drop in same-store

Krill said LOFT has missed out on some sales because it has
not had enough tops for the early fall to meet demand.

Inventories on a square-foot basis were up 8.3 percent at
the end of the quarter from a year earlier, and Krill told
analysts they would be sufficient to meet anticipated demand.

Gross margins rose 2.6 percentage points to 55 percent,
helped by fewer markdowns at Ann Taylor stores.

The company operates nearly 900 stores, including about 280
Ann Taylor stores and 506 LOFT stores. It expects 56 stores to
close across both brands for the year, and plans to open 30 new
stores, primarily for the LOFT chain.
(Reporting by Phil Wahba, editing by Gerald E. McCormick, Lisa
Von Ahn and Matthew Lewis)