Women's apparel retailer The Talbots Inc has announced sweeping plans to cut spending, open fewer new stores and close 100 underperforming stores this fiscal year, after swinging to a fourth quarter loss.

The Hingham, Massachusetts based retailer, which operates Talbots and J Jill stores, said the moves are aimed at shaving more than $100m in costs and achieving profitability on continuing operations in 2008.

The initiatives were unveiled as the company posted a 6% slump in same-store sales for the 13 weeks to 2 February and said it expects a fiscal fourth-quarter loss of $2.10 to $2.15 per share.

The net loss forecast includes charges of $85m or $1.60 per share related to store closures, acquisition and financing costs.

"Unfortunately, worsening economic conditions in the fourth quarter exacerbated problems that we had already recognised and have been working to address, and impacted our near-term performance," said Trudy F Sullivan, president and chief executive officer.

Total sales for the quarter fell 8% to $587m from $638m. By brand, retail store sales were down 10.4% to $388m at Talbots, and dropped 5.5% to $86m at J Jill.

Comparable store sales for the Talbots and J Jill brands fell 6.0% and 6.3%, respectively, driven by an especially weak November/December.

Following a strategic review launched in October, the retailer last month said it was shuttering its 78 Talbots Kids and Talbots Mens concepts with the loss of around 800 jobs. These are included in the 100 store closures now planned for fiscal 2008.

The strategic review is due to be completed in March, and will leave the company to focus on its core Talbots Misses, Petites, Womans, Collection, Accessories & Shoes and J Jill Missy, Petites and Womans businesses - all targeting consumers over the age of 35.

Among other measures announced yesterday (6 February) include improved inventory management, a new a price optimisation software tool, and a reduction in capital spending to $75m from $83m in 2007.

Store expansion in 2008 will also be scaled back to 46 new stores, down from 75 last year. Television and national print advertising will also be abandoned.

"Fiscal 2008 marks the beginning of a significant turnaround for The Talbots Inc," Sullivan added.

"These decisive actions, and the several other measures that we will be taking across our business, will drive greatly improved long-term performance."

The company currently operates 1,421 stores, with 1,150 under the Talbots nameplate and 271 stores under the J Jill brand.

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