Blog: Talbots in transition
Leonie Barrie | 13 March 2008
Hidden in Talbots’ fourth-quarter and full-year results statement yesterday was news that the company plans to close an additional 20 underperforming stores this year.
The latest scale-back comes just two months after Talbots said it would shut 66 Talbots Kids and 12 Talbots Mens stores this year – and is amid quarterly losses of $171m and an 8% slump in sales.
The retailer blames the “challenging economy” behind its reduction plan, and says it intends to cut its new store openings to 46 this year, down from 75 last year.
Talbots CEO Trudy F Sullivan calls 2008 a year of transition for the company – but most worrying for analysts are the costs associated with its disastrous acquisition of women’s clothing retailer J Jill Group.
It seems non cash write downs of $150m are attributable to J Jill, and that with its lower growth and earnings projections the chain is worth less today than it was when Talbots bought it for $517m in 2006.
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