Talbots will exit kids and men's businesses
Hingham-based apparel retailer Talbots Inc. said today it will exit its Talbots Kids and Talbots Mens concepts by September.
As a result, Talbots said it will close 78 US stores, including 66 Talbots Kids and 12 Talbots Mens stores; the closures will impact about 800 full- and part-time positions, or 5 percent of company's total workforce.
Talbots is perhaps best known for its classic styled clothing for middle-age women, but the company also noted today that that its quarter-to-date sales for both its Talbots and J. Jill brands are trending below its expectations.
The decision to exit the kids and men's business came after a thorough evaluation of its business, said the company, which added that the decision was part of Talbots strategic business review that was announced in October and which is expected to be completed in the first quarter of 2008.
Trudy F. Sullivan, who recently joined Talbots as president and chief executive, issued a statement regarding the decision.
"This is a very important strategic move that will greatly contribute to our ability to focus and reinvigorate our core brands and provide sustainable long-term shareholder value," Sullivan said in the statement. "By exiting these concepts, we can focus exclusively on our company's core strength - the age 35 plus female market, where we believe there is significant opportunity for profitable growth in both our Talbots and J. Jill brands."
According to the company, its strategic review of its kids and men's businesses revealed that these concepts did not demonstrate the potential to deliver acceptable long-term return on investment.
As a result of these actions, the company said it currently anticipates total revenue to be impacted by approximately $100 million on an annualized basis.
Talbots added that it currently expects that the ongoing operational benefit resulting from these closings would be approximately $13 to $15 million, or $0.15 to $0.18 per diluted share, on an annualized basis.
Talbots said it anticipates pre-tax expenses associated with the closings of approximately $5 million, or $0.06 per diluted share in the fourth quarter 2007.
In addition, the coompany said it expects to incur pre-tax expenses of approximately $34 to $42 million, or $0.40 to $0.49 per diluted share in fiscal 2008.
According to a story in the Globe's data base, Talbots disclosed plans in 2001 to test a men's clothing line.
Items from the new line were previewed at an investment conference the following year.
At that event, a model showed off a "Prince of Wales" style sports jacket in a "classic yet gutsy plaid," a Globe story recounted.
(By Chris Reidy, Globe staff)