Aeon Co, Japan's second-largest retailer, yesterday (10 July) reported a 38% drop in first-quarter profit on poor earnings at its US apparel unit Talbots Inc.

Aeon, based near Tokyo, said group net profit was JPY8bn (US$65.8m) for the quarter ended 20 May, down from JPY13bn a year earlier. Group sales rose 8.7% to JPY1.228 trillion.

Operating profit at Aeon's speciality store segment, which includes contributions from Talbots, in which it owns a 55% stake, dropped 59% to JPY2.3bn in the quarter from a year earlier.

In May, Talbots posted an 81% slump in first-quarter profit to $5.2m, blaming adverse weather in April, the earlier Easter and a broader-based consumer slowdown.

Talbots has recently hired Trudy Sullivan, an industry veteran at Liz Claiborne, to lead its turnaround efforts.

For the fiscal year Aeon has kept to its forecast for net profit of JPY70bn to JPY76bn, citing an expected rebound in its domestic superstore sales.