US: Talbots unveils long-term growth blueprint
Beleaguered women's wear retailer The Talbots has unveiled a multi-faceted strategic plan designed to return the company to long-term growth and profitability.
According to the plan, the retailer wants to become a design-led organisation, streamlining operations and controlling costs and inventories.
It also aims to innovate in its marketing programmes and become more efficient across the board.
Five key growth platforms have been identified, including detailed plans around the various strands of the Talbots brand - and the urgent need to improve performance at J Jill, the under-performing retail brand acquired by the group in 2006 for US$517m.
The Talbots has pledged to limit expansion of J Jill "until performance improves", after announcing a major write-down of the brand's assets in its fourth quarter results last month.
Once the chain has "demonstrated success", new stores will be opened up to a limit of about 450.
Meanwhile, Talbots plans to add about 35 new Talbots Womans stores in the next five years, also piloting a new "Boutique" concept to offer a fuller assortment within Talbots Misses outlets.
Talbots will "dramatically tighten" its footwear assortment at Talbots Accessories & Shoes; look to improve Talbots Collection's gross margin through better sourcing and pricing; and aim to open up to 40 new Talbots Premium Outlets in the next three years.
"We have identified several key areas of focus and are already well on our way in implementing a number of strategic initiatives," said president and CEO Trudy Sullivan.
"We have significantly strengthened our senior management team with a number of key executive appointments, revamped Talbots and J Jill merchandising and marketing strategies, exited non-core under-performing concepts and will continue to critically evaluate our entire store base.
"We believe this has built the right foundation to restore sustainable profitability in 2008 and beyond."
The Talbots is projecting top-line growth of about 3% for fiscal 2008, based on an overall slight decline in comparable store sales.
It predicts an overall loss per share of $0.07-0.17. But if the plan achieves all its goals, the company expects to achieve sales CAGR of 4%, with operating profit of 7% of sales by 2010.
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