Given the volatile environment, AnnTaylor declined to provide an earnings forecast for the current quarter, which includes the crucial holiday season. But it expects to face a competitive market, with heavy discounting, and said its gross margins will suffer because it did not expect the "magnitude of the current softness."

Companies that cater to women professionals, such as AnnTaylor, Talbots Inc and Chico's FAS Inc , have struggled for more than a year due to a U.S. economic slowdown and often performed worse than other retailers.

Many professional women cut spending on themselves before sacrificing purchases for their families, while a lack of compelling fashions kept others away.

These trends got worse once the financial crisis erupted in September, stoking widespread fears of a global recession.

AnnTaylor said it had "significantly scaled back" its capital spending for next year as it tries to preserve cash. The company said it had a strong, debt-free balance sheet and expected to maintain a solid cash position in the fourth quarter and next fiscal year.

"We are also aggressively managing our inventory levels and conserving our cash, to ensure we are well positioned to weather the very weak consumer environment we expect in the months ahead," Chief Executive Kay Krill said in a statement.

The owner of the Ann Taylor and Ann Taylor LOFT chains reported a loss of $13.45 million, or 24 cents per share, in the third quarter ended November 1, compared with a year-earlier profit of $40.76 million, or 66 cents per share.

Excluding restructuring charges, it said earnings per share were break-even in the latest quarter, in line with analysts' average forecast, according to Reuters Estimates.

Earlier this month, AnnTaylor said its third-quarter sales trends were disappointing and that profit excluding items would be break-even. It also said it would expand the scope of a restructuring it announced in January that included closing 117 stores and cutting up to 13 percent of headquarters staff.

Quarterly sales fell to $527.2 million from $600.9 million a year ago. Sales at stores open at least a year, an important retail gauge known as same-store sales, fell 19.4 percent in the quarter.

Sales fell at both Ann Taylor and LOFT. Same-store sales fell 24.8 percent at Ann Taylor and 15.4 percent at LOFT.

Shares of AnnTaylor fell to $5.17 in pre-market trading after closing at $5.35 on Thursday on the New York Stock Exchange.

(Reporting by Nicole Maestri in New York and Jessica Wohl in Chicago; editing by Dave Zimmerman)