Shares of women's-apparel retailer Ann Taylor Stores (NYSE:ANN) rose nearly 5% in yesterday's session on news that the company's fiscal Q4 (ended Jan. 29) financial results met Wall Street estimates and Q1 guidance beat the forecasts. Trading volume for Ann Taylor was more than three times its recent daily average.

Investors were also putting their stamp of approval on the company's plans for management succession. Kay Krill, who's been with the company since 1994 and was named president in November, will become Ann Taylor's new chief executive officer. She'll replace Charlie Spainhour in October after what will presumably be a smooth and mutually beneficial transition period. In the meantime, the company says, it will start looking for someone to play chief operating officer.

Even if you don't know Krill, you have reason to be happy about the news: By separating the offices of chairman and CEO, Ann Taylor is doing what's generally considered a sign of good corporate governance. The more independence the board has from management, the thinking goes, the better chance that the board will be able to fulfill its oversight role. Krill won't be chairman and isn't a director.

Perhaps more important is that investors appear to like what Krill has done. She made her name in merchandising, particularly in the company's more moderately priced Loft division. The back story on that operation is worth telling: Ann Taylor started it as a test concept in 1995, primarily as an outlet store that combined closeout and original, private-label merchandise. Over the years, it's grown into Ann Taylor's meat and potatoes.

At the beginning of 1998 (to pick a number), the company had 324 stores, of which 283 were Ann Taylor stores and the rest divided between the Loft and Ann Taylor Factory Store lines. The factory-store model has been largely left behind, at least as a growth driver, while Loft has more or less run the show. As of Jan. 29, the company had 738 stores total, 343 of them bearing the Loft name and only 36 with the Factory Store designation. Loft's same-store sales are growing, and its revenues are higher than are the namesake line's.

You do the math. Investors in the know have a habit of following managers whose work they like. Pro-sports fans sometimes get sneered at for following players instead of teams, but this isn't sports, folks. Ann Taylor quickly saw in its president someone to whom it could turn over the whole shebang. Based on yesterday's share-price appreciation, investors approve, too. Given the difficulties the namesake division has had lately, you can understand why they'd be happy to see change.

Fool contributor Dave Marino-Nachison doesn't own shares of Ann Taylor, or a dress.