Talbots profit falls, but chain sees better days ahead
Talbots Inc., the Hingham apparel chain struggling to win the favor of middle-age women more inclined to wear casual clothing, said today that first quarter net income was $1.6 million, down 69 percent from net income of $5.2 million a year ago.
Talbots said total consolidated first-quarter sales were $542 million; at stores open at least a year, sales fell 9.8 percent, and sales at stores open at least a year at the company's J. Jill division were down 20.2 percent.
(Photos accompanying this story were taken from the company's website.)
Talbots is looking to revamp its strategy and exit a number of underperforming businesses; for those reasons, focusing on the company's ongoing core operations gives a better picture of its future outlook, Talbots said.
For example, the company said it "achieved solid first quarter 2008 results from ongoing core operations of 21 cents per share, above last year's 14 cents per share on a comparable basis."
Excluding a loss of $5.9 million from its Talbots Kids, Mens, and U.K. noncore businesses, which the company is closing, and restructuring charges of $3.5 million, net income from ongoing core operations was $11 million, the Associated Press reported.
Talbots also said that Talbots brand merchandise posted solid sales in April.
Trudy F. Sullivan, Talbots president and chief executive, said in a statement: "During the quarter, we focused on the strategic initiatives we put in place to better manage our inventories, control expenses, streamline our operations and innovate our marketing/promotional programs. It was a solid quarter and we are encouraged with our progress, particularly in the Talbots brand, where we have seen a dramatic improvement in our merchandising gross margin."
Sullivan also said in her statement: "April was particularly strong for the Talbots brand.... We also believe that the refreshed visual presentation of our merchandise, consistent across all channels, coupled with a more focused and effective direct marketing campaign was a clear benefit."
Last month, Talbots disclosed that two lenders had canceled letters of credit, news that sent its stock shares tumbling.
In January, Talbots disclosed plans to get out of the children's and men's apparel businesses and to slash 5 percent of its work force.
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(By Chris Reidy, Globe staff)
