The chain of women’s clothing stores posted a net loss of $2.8 million for the three months ended Jan. 29, compared with a profit of $4.1 million a year ago. The loss was slightly better than analysts expected.
Quarterly revenue fell about 7 percent to $292.6 million.
Talbots said it will close 90 to 100 stores and “consolidate and/or downsize” another 15 to 20 locations, most of them by the end of 2011 but extending into next year. Talbots originally planned to close 75 to 100 stores over the next three years.
The company also expects to renovate 70 stores, up from 50, by the end of this year as part of an overall “store re-image program.”
“We believe the acceleration of store closings is an appropriate strategy based on our customer, the market, and how we want our operations to be structured,” CEO Trudy Sullivan said.
Talbots currently operates 568 stores in 46 states and Canada.
Talbots, which caters to women aged 45 and above, has been trying to woo younger women by selling trendier clothes, but without much success. It revamped its merchandise and invested in a splashy ad campaign featuring Linda Evangelista to shed a stodgy image.
But the company’s merchandise styling was “pushed too far forward” for its core customer, Sullivan said.
“We conducted extensive consumer research on our January catalog, and found that a number of our core customers were confused by the presentation of our merchandise, as they perceived the styling as being too fashion-forward,” she said during a conference call today with analysts.
So Talbot’s March catalog, featuring Julianne Moore, will attempt to walk the line between stodgy and trendy with “a broader selection of models to illustrate that our brand offer appeals to a wider age, diversity and size spectrum.”
For the full year, Talbots reported net income of $10.8 million, compared with a net loss of $29.4 million. Revenue fell to $1.21 billion from $1.24 billion.
SOURCE: Boston Herald.com - BizSmart
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