A younger, hipper Ann Taylor

Ann Taylor is in the midst of an extreme makeover.

The women’s apparel chain is trying to shake its “Corporate Cathy” image with the help of a design overhaul, updated stores and a new celebrity spokeswoman — Naomi Watts — all in a bid to appeal to younger, more stylish shoppers.

The transformation started last fall with an Ann Taylor runway show during New York Fashion Week, followed this spring by a glitzy Hollywood meet-and-greet at the Soho House in West Hollywood. By May, a cream floral lace sheath dress worn by model Milla Jovovich in store window displays was in such demand that it sold out in a matter of days — before popping up on EBay at nearly three times the original price.

It’s a far cry from the quiet Ann Taylor of yore — just a step up from Casual Corner — when it was the kind of place where your mom’s cousin from Cincinnati would shop. While most chain retailers reaped the benefits of the highflying early 2000s, Ann Taylor sank into the doldrums of dowdy. The average store lost a third of its sales volume during the last few years, according to Brian Tunick, a retail analyst at JP Morgan in New York.

Those days appear to be over. First-quarter sales for 2010 were up 16% from the same period last year. And the Ann Taylor wardrobe has gone from head-to-toe suit looks to more fashion-forward separates with feminine details. For fall, that means a white asymmetrical military jacket in stretch silk with couture-like brass chain trim ($228); a black knit miniskirt with tiers of pleated chiffon ($128); leopard haircalf kitten heels ($198) and a Swarovski crystal stretch cuff bracelet ($118) with an Art Deco feel.

Lisa Axelson, the woman in charge of giving Ann Taylor a fresh, new look is a 38-year-old mom-to-be with a rather full life, who commutes by train from Stamford, Conn., in clothes designed to take her from desk to dusk with the addition of a single sparkling accessory.

She is designing for a company that opened its first shop in 1954 and mirrored the evolution of American women — from modest frocks for suburban housewives to highwaisted pants and sleeveless shift dresses for a new generation of youth to the matchy-matchy suits that became a workplace uniform. But in the late 1990s, when the casual revolution swathed the land in khaki, the brand failed to evolve.

“I never would have gone to Ann Taylor,” says Axelson, who has been creative director and senior vice president of design for nearly two years. “It was too conservative.”

What changed her mind? A surprisingly sexy back story.

Axelson opens a scrapbook stuffed with ads from Ann’s wilder days in the 1960s and 1970s, and begins reading:

“Ann Taylor announces shoes that do nice things for more than your feet.”

“Your love for your mother has nothing to do with the way you dress.”

“Look who wears the pants now.”

“I started seeing this new glimpse of Ann,” the designer says. “She was cheeky — not rebellious, but she was going against society’s norm. Then what happened? She went to work and she suddenly got boring?”

Learning to listen

Axelson grew up in Seattle before grunge, and is as polished and professional as you would expect the figurehead of Ann Taylor to be. Her office is beyond organized. Even the magazine clippings tacked to her bulletin board look tidy. But there is a hint of grit below the surface. Axelson is married to a rock musician named Rocky Reid, whom she met in “a dirty old East Village bar” when she was an art student at Parsons School of Design in New York.

“My parents were open to fashion, but I do remember a conversation, it might have been a heated debate, that stuck with me. My dad was an architect who understood the pressure of being creative. He said, ‘If you remember one thing, it’s that you’re working for a customer, you’re working for them. And if you are a designer designing a product for someone else, you have to listen to them.”

Which may be why Axelson has had so much success designing for shopping mall stalwarts — specialty retail chain stores that have to listen to all of America.

In 1994, she started at Banana Republic, where she helped “take the brand from Jeeps and safari to casual sportswear.” Her favorite design was the Cromwell coat, a chino coat with a high military collar and four patch pockets, which she swears she still sees on women in New York.

In 2002, she joined the Gap. In just one year, she designed the pink Mackintosh that sold out of Gap stores within weeks and helped bring back the brand’s popular Crazy Stripe holiday collection.

After that, Abercrombie & Fitch recruited her to launch its now-defunct offshoot Ruehl. When she landed back in New York in 2005, it was at Club Monaco.

Then, in 2008, Ann Taylor came calling.

“We were all surprised she went to Ann Taylor because it seemed very old,” says Helen Farnell, a designer for Express, who has worked with Axelson on and off for 10 years. “But she has brought in a lot of modern elements. I’ve never seen the stores looking so good. I’ve even gone in and bought things, which I never would have done before.”

Axelson and her 30-person team create four collections a year, which amounts to about 400 styles in stores, as well as a bridal collection. Age-wise, the sweet spot for the brand is mid-30s and up, although more twentysomethings are starting to take notice, she says. (Ann Taylor also owns Loft, which is positioned as a younger, more casual retail destination.)

This fall’s pared-down and dressed-up trend comes at an opportune time for Ann Taylor, which still aims to fill the niche for professional dressing, but in a more modern way. “I don’t know if casual is gone forever, but people are taking their attire more seriously,” Axelson says. “Those who are employed are grateful.”

Along those lines, Axelson introduced the “Perfect Pieces” collection last fall. It is updated seasonally with new versions of the perfect black pant, the perfect pencil skirt, the perfect pump and so on.

Not surprisingly, given the continued popularity of costume jewelry, accessories are also a new priority. “Diamonds and pearls are staples, but we never do them in a traditional way, we mix them with ribbons and chains,” Axelson says. The Flower Pearl necklace ($168) in the fall collection incorporates a piece based on a vintage brooch Axelson found at a Paris flea market.

If it all sounds a bit familiar, it’s because it is. Ann Taylor, like so many other retailers, is trying to pull a J. Crew — whipping up clothes that can be dressed up or down, sprinkling in an aura of affordable luxury, and a dash of ruffles and bows, in hopes that it adds up to fashion magic. “Everyone is using J. Crew’s [design] themes. You’re seeing it at Talbots and even Gap to a certain extent, because they are all trying to get business back. Soon Costco will be selling ruffles,” Tunick says.

Of course, Ann Taylor has yet to achieve the status of J. Crew, which manages to be popular with both fashion insiders and outsiders. For one, the brand hasn’t dressed Michelle Obama, though it’s not for lack of trying. They have sent clothes to Obama’s de facto stylist, Chicago retailer Ikram Goldman.

Axelson was recently accepted as a member of the Council of Fashion Designers of America — a sign that you’ve officially “arrived” as a singular talent on the American fashion scene. But she still looks wistfully out the window across Times Square’s concrete canyon to the Conde Nast building, where she can see Vogue magazine editor in chief Anna Wintour’s office. Wintour was invited to the office to meet Axelson and see the collection but sent another editor instead.

A different story

Pleasing high-powered editors is one thing, but pleasing customers is another. In May, Ann Taylor was put on the defensive after the blog Jezebel.com noticed photos of models on AnnTaylor.com were Photoshopped to proportions so slender they would make Kate Moss wince.

“We were all involved, and we briefed the company that does our retouching that it needed to look more natural, more like real women,” Axelson says.

The site was called out again in late July, when a technical glitch allowed viewers to see models both before and after Photoshopping. “When we do casting, it’s all about perfectly imperfect, honoring her curves and beauty from the inside out. So this was so opposite to what we want to convey as a brand, and what we are about,” says Axelson, who points to recent Ann Taylor models Heidi Klum, Jovovich and Watts as women who are “not just beautiful, but have depth.”

Only time will tell if the public agrees. Axelson spends as much time as she can visiting Ann Taylor stores, and reading e-mails from district managers. (When she tried to take the lining out of pants, she heard loud and clear that she had to put it back.)

“The first year was about doing, listening and correcting,” she says. “Now, we have to build on that.”

Next up is summer 2011. Outside Axelson’s office, inspiration boards are pinned with hot pink fabric swatches and photos of Frida Kahlo and Mexican vacation destination Tuluum. There’s also a huge flat-screen TV at the ready for the designer, who will have to communicate to her team over a Skype hookup when she goes on maternity leave later this year.

“We are in the incubating stages of showing women that Ann is relevant again,” Axelson says. “These aren’t just your mom’s clothes.”

booth.moore@latimes.com