Talbots posts smaller-than-expected Q4 loss, accelerates remodels
HINGHAM, Mass. -- Talbots reported Thursday a narrower-than-expected fiscal fourth-quarter loss, and said it plans to expand its store re-image program to improve traffic. The chain also it expects to close as many as 100 stores over the next two years.
Talbots lost $2.8 million in the quarter ended Jan. 29, compared with a loss of $1.5 million in the year-ago period.
Net sales fell 7.4% to $292.6 million, compared with $315.9 million in the same period last year. Same-store sales dropped 7.3%.
The Talbots said that it plans to renovate about 70 stores by fiscal year-end. It also plans to close 90 to 100 stores and consolidate or down-size another 15 to 20 stores over two years, with a majority of those expected to be completed in 2011.
Additionally, the retailer said it expects to open 20 outlets in 2011.
Trudy Sullivan, Talbots president and CEO, said, "We achieved fourth quarter and full year results that were slightly better than our revised expectations. For the full year, we significantly improved our profitability and considerably deleveraged our balance sheet; however, we remain disappointed in our fourth quarter performance. As we previously reported, our results during the fourth quarter reflected weaker than anticipated customer response to our product, high levels of competitive promotional activity and weather related issues. We believe merchandise styling in our catalog that was pushed too far forward for our core customer, and the initial allocation of product in the early implementation of our store segmentation strategy, were additional factors impacting store traffic. We have already begun to take steps to address these challenges."
For the full year, sales dropped to $1.21 billion from $1.24 billion a year ago. Same-store sales declined 3.4% for the year.