Separation Agreement - AnnTaylor Inc. and Paul E. Francis


                    PERSONAL AND CONFIDENTIAL




January 24, 1997


Mr. Paul E. Francis
535 Pelham Manor Road
Pelham Manor, NY  10803


Dear Paul:

This  will confirm the agreement between you and AnnTaylor,  Inc.
(hereafter   referred  to  as  the  'Company')   regarding   your
separation from the Company.

1.   We  agree that your date of separation from employment  with
     the  Company  will  be  February 14, 1997  (the  'Separation
     Date')  and, effective as of the Separation Date, you hereby
     resign  from your positions as a director and/or officer  of
     the  Company,  its parent company, and any of the  Company's
     subsidiaries.

2.   In consideration of your delivery of the Release referred to
     in  paragraph  4 and the representations and agreements  set
     forth in this letter agreement, including those set forth in
     paragraph  5  hereof,  the Company agrees  to  pay  you  the
     severance  compensation  described  in  paragraph  3  below,
     subject  to  the  terms and conditions  set  forth  in  this
     letter.

3.   Subject to this letter agreement becoming effective  and  to
     your  compliance  with  the  terms  hereof,  your  severance
     compensation shall consist of the following:

          (a)   Cash compensation of up to $335,000.00, less  all
          applicable  federal, state and local withholding  taxes
          ('Taxes'),  payable  in up to twenty-four  equal  semi-
          monthly   installments  of  $13,958.33  (less   Taxes),
          commencing  upon the later of the Separation  Date  and
          the Effective Date of this letter agreement (as defined
          in  paragraph  11  below), and continuing  through  the
          earlier  of  (i) the twelve-month anniversary  of  such
          date  and (ii) such time as you procure other full time
          employment.  You agree that if you procure  other  full
          time  employment  prior  to the  twenty-fourth  payment
          referenced  above, you will provide the Company  prompt
          written notice thereof.

=====================================================================


Mr. Paul E. Francis
January 24, 1997
Page 2


          (b)   The  Company  shall permit you to  continue  your
          participation  in  its  medical  and  dental  insurance
          programs  at  the associate rate of contribution,  from
          the  Separation Date throughout the period during which
          you  are  receiving severance compensation pursuant  to
          paragraph  3(a) above.  At the end of that period,  you
          shall  be  entitled to participate in such programs  in
          accordance with the applicable COBRA regulations.

          (c)  If the Separation Date occurs before the time that
          the  Company  makes incentive compensation payments  to
          its   associates   under  the  Management   Performance
          Compensation Plan (the 'Performance Plan') for the Fall
          1996  Season, the Company shall also make a payment  to
          you,  at  the  time that such payment is  made  to  all
          associates,  in  an  amount  equal  to  the   incentive
          compensation payment you would have received under  the
          Performance Plan for the Fall 1996 Season  if  you  had
          continued to be employed by the Company (less Taxes).

          (d)   The  'performance options' previously granted  to
          you   under   the  Company's  1992  Stock  Option   and
          Restricted  Stock and Restricted Unit Award  Plan  (the
          'Option Plan') and the related stock option agreements,
          and   listed   on  Schedule  I  hereto,  shall   remain
          outstanding  through  February  28,  1999   and   shall
          continue  to  be eligible for vesting and  exercise  in
          accordance  with the terms set forth in the  applicable
          stock option agreements as if you had continued in  the
          employ  of  the  Company through such date.   All  such
          performance  options that have not vested  or  are  not
          exercised by the close of business on February 28, 1999
          shall be canceled at such time.

                Certain of the 'time options' previously  granted
          to  you  under  the Option Plan and the  related  stock
          option  agreements, also listed on Schedule  I  hereto,
          that  would not have vested until after April  6,  1997
          shall  be canceled as of the Separation Date.  However,
          the  remaining 'time options' previously granted to you
          and   listed  on  Schedule  I  shall  continue  to   be
          outstanding  and  shall  vest in  accordance  with  the
          original  vesting schedule applicable thereto,  through
          and including April 6, 1997 as if you had continued  in
          the  employ of the Company through such date,  and  all
          vested  time  options shall be exercisable through  the
          close  of business on February 28, 1999 as if  you  had
          continued  in  the employ of the Company  through  such
          time.    All   unexercised  vested  time  options   not
          exercised by the close of business on February 28, 1999
          shall be canceled at such time.

=====================================================================


Mr. Paul E. Francis
January 24, 1997
Page 3


4.   In  consideration of the compensation described in paragraph
     3  above,  on  the  Separation Date you  shall  execute  and
     deliver to the Company a Release in the form of Schedule  II
     hereto.

5.   You represent that you have not filed against the Company or
     the  Company's  parents,  subsidiaries,  affiliates  or  any
     Related Persons (as defined in Schedule II), any complaints,
     charges or law suits arising out of your employment  by  the
     Company, or any other matter arising on or prior to the date
     hereof.   You  covenant and agree that  you  will  not  seek
     recovery   against  the  Company  or  any  of  its  parents,
     subsidiaries, affiliates or any Related Person  arising  out
     of  any of the matters set forth in this paragraph or any of
     the matters that are the subject of the Release referred  to
     in paragraph 4.

6.   Nothing  set forth in this agreement shall prevent you  from
     enforcing the terms of this agreement, nor do you  waive  or
     lose  any  rights that you have to compensation  for  vested
     accrued unused 1997 vacation, or any rights that you have as
     a  former  employee under the Company's stock option  plans,
     stock  purchase plan, or retirement or insurance  plans,  as
     applicable.

7.   You  represent  that you have returned or  will  immediately
     return  to the Company all confidential information  of  the
     Company ('Company Information'), and you will not retain any
     copies, reproductions or excerpts thereof, including without
     limitation  mailing lists, customer lists,  reports,  files,
     memoranda,  records,  credit  cards,  door  and  file  keys,
     training  manuals,  and other physical or personal  property
     which  you  received  or  prepared  or  helped  prepare   in
     connection  with your employment by the Company,  and  other
     technical,  business  or  financial  information  or   trade
     secrets  the use or disclosure of which might reasonably  be
     construed to be contrary to the interests of the Company  or
     any Related Person.

8.   In  the  course  of  your employment with  the  Company  you
     acquired  confidential Company Information.  You  understand
     and agree that such Company Information was disclosed to you
     in  confidence  and  for the benefit and  use  of  only  the
     Company.   You acknowledge that you have no ownership  right
     or  interest  in any Company Information used  or  developed
     during  the  course of your employment.  You understand  and
     agree  that  (a)  you  will  keep such  Company  Information
     confidential  at  all times after your employment  with  the
     Company and (b) you will not make use of Company Information
     on your own behalf or on behalf of any third party.


=====================================================================


Mr. Paul E. Francis
January 24, 1997
Page 4


9.   You agree that, from the date hereof through February 28,
     1999, you will not solicit, entice, persuade, induce or
     influence any individual who is an employee of the Company
     to terminate his or her employment with the Company or to
     become employed by any other individual or entity, and you
     shall not approach any such employee for any such purpose.
     Any breach of the terms of this paragraph shall result in
     your automatic forfeiture of the severance compensation set
     forth in paragraph 3 above.

10.  The  Company advises you to consult with an attorney of your
     choosing prior to signing this agreement.  You confirm  that
     you  have  the right and have been given the opportunity  to
     review  this  agreement and, specifically, the  release  set
     forth  in paragraph 4 and the representations and agreements
     set  forth in paragraph 5, with an attorney of your  choice.
     You  also understand and agree that the Company is under  no
     obligation to offer you the severance compensation set forth
     in  paragraph  3  and that you are under  no  obligation  to
     consent  to  the release set forth in paragraph  4  and  the
     representations and agreements set forth in paragraph 5, and
     that  you  have  entered  into  this  agreement  freely  and
     voluntarily.

11.  You  may have forty-five days to consider the terms of  this
     agreement.    Furthermore,  once  you   have   signed   this
     agreement, you will have seven additional days from the date
     you  sign  it  to  revoke  your  consent.   To  revoke  this
     agreement you must clearly communicate your decision  to  do
     so  to  the Senior Vice President - Human Resources  of  the
     Company  (212-541-3361) within the seven day  period.   This
     agreement  will not become effective until seven days  after
     the  date you have signed it, as indicated on the last  page
     hereof.  Such seventh day is considered to be the 'Effective
     Date' of this agreement.

12.  You  agree  to keep the terms of your severance compensation
     and this agreement confidential, other than as necessary  to
     consult with your legal or tax advisors.

13.  The  terms  in  this letter constitute the entire  agreement
     between us and may not be altered or modified other than  in
     a  writing  signed  by  you and the  Company.   This  letter
     supersedes  in  its  entirety the letter  to  you  from  the
     Company  dated  January  13, 1997.  You  represent  that  in
     executing this letter agreement you do not rely and have not
     relied  upon any representation or statement not  set  forth
     herein   made   by  the  Company  or  any  of  its   agents,
     representatives, attorneys or Related Persons  with  respect
     to  the  subject  matter, basis or  effect  of  this  letter
     agreement, or otherwise.


=====================================================================


Mr. Paul E. Francis
January 24, 1997
Page 5



14.  This agreement will be governed by the laws of the State  of
     New York, without reference to its choice of law rules.

If  this letter correctly sets forth our understanding, please so
signify  by  signing and dating the enclosed copy of this  letter
and  returning it to the Senior Vice President - Human Resources,
AnnTaylor, Inc., 142 West 57th Street, New York, New York 10019.

Very truly yours,

AnnTaylor, Inc.


By:  /s/ J. Patrick Spainhour 
     __________________________
          Chairman & CEO
                                





AGREED TO AND ACCEPTED:

/s/ Paul E. Francis
___________________________
    PAUL E. FRANCIS

Dated: January 24, 1997
       ----------------

===========================================================================


Mr. Paul E. Francis                           
January 24, 1997
Page 6
                           
                           SCHEDULE  I
                                
                  STOCK OPTION GRANTS UNDER THE
         ANNTAYLOR STORES CORPORATION 1992 STOCK OPTION
       AND RESTRICTED STOCK AND RESTRICTED UNIT AWARD PLAN
                                



Performance Options
--------------------
:----------:-------------:--------------------:
:   Grant  :  Exercise   :   No. Performance  :
:    Date  :   Price     :   Options Awarded  :
:----------:-------------:--------------------:
:          :             :                    :
:  02/23/94:   $25.375   :      53,336        :
:----------:-------------:--------------------:
:  02/24/95:   $33.000   :      20,000        :
:----------:-------------:--------------------:


Time Options
-------------
                                
:----------:----------:------------:-----------:---------------:-------------:
:          :          :            : No. Time  :   No. Time    : No. Time    :
:          :          : No. Time   :  Options  :    Options    :  Options    :
:  Grant   : Exercise :  Options   : Vested at :    Canceled   :Vesting in   :
:   Date   :  Price   :  Awarded   :  2/21/97  :   on 2/21/97  :   Future    :
:----------:----------:------------:-----------:---------------:-------------:
: 04/06/93 :  $18.125 :  30,000    :   24,000  :          0    :    6,000    :
:          :          :            :           :               :  (4/6/97)   :
:----------:----------:------------:-----------:---------------:-------------:
: 04/06/93 :  $26.000 :  40,000    :   32,000  :          0    :    8,000    :
:          :          :            :           :               :  (4/6/97)   :
:----------:----------:------------:-----------:---------------:-------------:
: 02/23/94 :  $25.375 :  26,664    :   13,332  :      6,666    :    6,666    :
:          :          :            :           :               :  (2/23/97)  :
:----------:----------:------------:-----------:---------------:-------------:
: 02/24/95 :  $33.000 :  10,000    :    2,500  :      5,000    :    2,500    :
:          :          :            :           :               : (2/24/97)   :
:----------:----------:------------:-----------:---------------:-------------:


==============================================================================


                          SCHEDULE II

                 FORM OF RELEASE TO BE DELIVERED
                      ON THE SEPARATION DATE


Reference is made to the agreement dated January 24, 1997 between

the  undersigned,  Paul  E.  Francis, and  AnnTaylor,  Inc.  (the

'Company'),  relating  to the separation  of  employment  of  the

undersigned from the Company (the 'Agreement').




In  consideration of the compensation described in paragraph 3 of

the Agreement, I, Paul Francis, hereby voluntarily, knowingly and

willingly release and forever discharge the Company, its parents,

subsidiaries  and  affiliates,  together  with  its   and   their

respective    officers,   directors,   partners,    shareholders,

employees,  successors  and assigns (collectively,  the  'Related

Persons'),   from  any  and  all  charges,  complaints,   claims,

promises, agreements, controversies, causes of action and demands

of  any nature whatsoever which against any of them that I or  my

heirs, executors, administrators, successors or assigns ever had,

now  have  or hereafter can, shall or may have by reason  of  any

matter,  cause or thing whatsoever arising through and  including

the  date  of this Release.  This release includes,  but  is  not

limited  to,  any  rights or claims relating in  any  way  to  my

employment  relationship  with the Company,  or  the  termination

thereof,  or  under  any  statute,  including  the  federal   Age

Discrimination in Employment Act, Title VII of the  Civil  Rights

Act,  The  Americans With Disabilities Act, the  New  York  Human

Rights Law, and any other federal, state or local law.



The  foregoing notwithstanding, this Release shall not constitute

a  release or waiver of any rights that the undersigned may  have

to   indemnification  from  the  Company  or   AnnTaylor   Stores

Corporation  in connection with the action captioned Carol  Novak
                                                      -----------
and  Robert  Nieman,  On  behalf of  Themselves  and  All  Others
-----------------------------------------------------------------
Similarly  Situated v. Sally Frame Kasas [sic], et  al.,  No.  96
-------------------------------------------------------
Civ. 3073 (BDP) (S.D.N.Y.).  The undersigned shall cooperate with

the Company in connection with the defense of this matter.




I  represent  that I have not filed against the  Company  or  the

Company's  parents,  subsidiaries,  affiliates  or  any   Related

Persons, any complaints, charges or law suits arising out  of  my

employment  by  the Company, or any other matter  arising  on  or

prior  to the date hereof, and I covenant and agree that  I  will

not  seek  recovery against the Company or any  of  its  parents,

subsidiaries, affiliates or any Related Person arising out of any

of the matters set forth in the second paragraph of this Release.




IN WITNESS WHEREOF, I have executed and delivered this Release to

the Company as of this 14th day of February, 1997.
                                        
                                        

                                        _______________________
                                        Paul E. Francis
                                        
____________________
  Witness

====================================================================


                               RELEASE




Reference is made to the agreement dated January 24, 1997 between

the  undersigned,  Paul  E.  Francis, and  AnnTaylor,  Inc.  (the

'Company'),  relating  to the separation  of  employment  of  the

undersigned from the Company (the 'Agreement').



In  consideration of the compensation described in paragraph 3 of

the Agreement, I, Paul Francis, hereby voluntarily, knowingly and

willingly release and forever discharge the Company, its parents,

subsidiaries  and  affiliates,  together  with  its   and   their

respective    officers,   directors,   partners,    shareholders,

employees,  successors  and assigns (collectively,  the  'Related

Persons'),   from  any  and  all  charges,  complaints,   claims,

promises, agreements, controversies, causes of action and demands

of  any nature whatsoever which against any of them that I or  my

heirs, executors, administrators, successors or assigns ever had,

now  have  or hereafter can, shall or may have by reason  of  any

matter,  cause or thing whatsoever arising through and  including

the  date  of this Release.  This release includes,  but  is  not

limited  to,  any  rights or claims relating in  any  way  to  my

employment  relationship  with the Company,  or  the  termination

thereof,  or  under  any  statute,  including  the  federal   Age

Discrimination in Employment Act, Title VII of the  Civil  Rights

Act,  The  Americans With Disabilities Act, the  New  York  Human

Rights Law, and any other federal, state or local law.




The  foregoing notwithstanding, this Release shall not constitute

a  release or waiver of any rights that the undersigned may  have

to   indemnification  from  the  Company  or   AnnTaylor   Stores

Corporation  in connection with the action captioned Carol  Novak
                                                     ------------
and  Robert  Nieman,  On  behalf of  Themselves  and  All  Others
-----------------------------------------------------------------
Similarly  Situated v. Sally Frame Kasas [sic], et  al.,  No.  96
-------------------------------------------------------
Civ. 3073 (BDP) (S.D.N.Y.).  The undersigned shall cooperate with

the Company in connection with the defense of this matter.



I  represent  that I have not filed against the  Company  or  the

Company's  parents,  subsidiaries,  affiliates  or  any   Related

Persons, any complaints, charges or law suits arising out  of  my

employment  by  the Company, or any other matter  arising  on  or

prior  to the date hereof, and I covenant and agree that  I  will

not  seek  recovery against the Company or any  of  its  parents,

subsidiaries, affiliates or any Related Person arising out of any

of the matters set forth in the second paragraph of this Release.



IN WITNESS WHEREOF, I have executed and delivered this Release to

the Company as of this 14th day of February, 1997.
                                        
                                        
                                        /s/ Paul E. Francis
                                        _______________________
                                            Paul E. Francis
/s/ Jocelyn Barandiaran                                        
________________________
  Witness