Markdowns in the fourth quarter weakened the bottom lines of specialty retailers Talbots Inc. and American Eagle Outfitters Inc., while Hot Topic Inc. posted a hefty profit on improved cost controls.
Talbots Inc. on Wednesday posted both fourth-quarter and full-year losses. For the quarter ended Feb. 2, the loss was $171.4 million, or $3.23 a diluted share, against income of $17,000, or breakeven a diluted share, in the same year-ago quarter. Sales were down 7.9 percent to $587.4 million from $638 million.
By brand, retail store sales for the quarter fell 10.4 percent to $388 million for Talbots from $433 million, and were down 5.5 percent for J. Jill Group Inc. to $86 million from $91 million. Consolidated direct marketing sales, including catalogue and the Internet, dipped by 0.9 percent to $113 million from $114 million. Total company retail same-store sales fell by 6 percent, with comps at Talbots down 6 percent and at J. Jill decreasing by 6.3 percent.
For the year, the loss was $188.8 million, or $3.56 a diluted share, against income of $31.6 million, or 59 cents, last year. Sales were up 2.6 percent to $2.29 billion from $2.23 billion.
"It was a difficult year for Talbots. However, we feel very good about the progress we have made, and believe we are well-positioned to succeed in 2008," said Trudy Sullivan, president and chief executive officer.
Sullivan said 2008 will be a year of transition as the company launches a three-year initiative to strengthen and grow the business. The company plans to roll-out a more compelling merchandise assortment for Talbots and build greater brand awareness of the J. Jill brand.
American Eagle Outfitters' fourth-quarter earnings slid as lower product costs were not enough to compensate for markdown-driven margin declines.
Profits fell 6.4 percent to $140.5 million, or 66 cents, for the three months ended Feb. 2, as sales rose 2.3 percent to $995.4 million. Comparable-stores sales dipped 2 percent.
"We are prudently investing in the development of our brands and continuing to build long-term profitability," chief executive officer Jim O'Donnell said.
First-quarter earnings are slated for 25 to 27 cents a share, down from 35 cents a year ago.Hot Topic posted a 34 percent net income gain in the fourth quarter to $11.9 million, or 27 cents, from $8.9 million, or 20 cents, in the same period last year as sales fell 8.2 percent to $220.7 million. Same-store sales declined 6.3 percent during the quarter.
For the year-end period, net income grew 18 percent to $16 million, or 36 cents, from $13.6 million, or 30 cents, in the prior year on sales that fell 3 percent to $728.1 million.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews