Better than expected was good enough for two women’s apparel retailers Thursday.
Shares of The Talbots Inc. and Charming Shoppes Inc. soared 22.7 percent to $5.89 and 17.2 percent to $3.47, respectively, after the struggling missy specialty stores managed to surpass analysts’ modest fourth-quarter expectations.
Both chains posted quarterly losses on steep holiday discounting, outlined strategies to turn around their stilted brands and disclosed plans to shutter stores — 240 for Charming Shoppes and roughly 100 for Talbots.
“The market was dreaming up worst-case scenarios. There was a lot of negativity and low expectations going into the numbers,” Morgan Stanley analyst Kimberly Greenberger said of Thursday’s beefy stock gains.
“For Talbots, part of the problem is that the dated Talbots image is difficult to disentangle from the dated Talbots store image,” she said, explaining that the retailer, which has made “progress” updating its assortment, must continue to update the stores.
Recognizing the difficulty of modernizing an image steeped in traditional styling, Trudy F. Sullivan, president and chief executive officer of Talbots, acknowledged that “merchandise styling in our catalogue…pushed too far forward for our core customer.”
Talbots said it would accelerate its previously announced plans to close between 90 and 100 stores in the next two years and renovate about 70 units this year.
The retailer swung to a fourth-quarter net loss of $2.8 million, or 4 cents a diluted share, compared with a profit of $4.1 million, or 7 cents a share. The 568-door Hingham, Mass.-based retailer said it registered an adjusted loss from continuing operations of 14 cents a share. Sales in the quarter ended Jan. 29 fell 7.4 percent to $292.6 million from $315.9 million in 2009.
Analysts were expecting a loss of 17 cents on sales of $294.5 million.
Quarterly comparable-store sales declined 7.3 percent and gross margin declined to 29.2 percent of sales from 35.3 percent in the year-ago quarter.
“Weaker-than-anticipated customer response to our merchandise assortment and high levels of competitive promotional activities were key factors impacting our results,” Sullivan said on the quarterly conference call, expressing confidence in the firm’s current strategy and ongoing initiatives.
Plus-size specialist Charming Shoppes, which promoted its acting ceo Anthony Romano to permanent ceo and president Thursday, said it logged a net loss of $30.4 million, or 26 cents a diluted share, for the period ended Jan. 29, compared with a year-ago loss of $28 million, or 24 cents a share. Excluding items, the company, which operates brands such as Lane Bryant, Fashion Bug and Catherines, said its net loss totaled 8 cents a diluted share, better than the 19 cent loss anticipated, on average, by analysts.
Sales rose to $575.8 million, 6.8 percent above the $539 million logged in last year’s quarter and above the $553.1 million expected by analysts. Charming Shopped currently operates 2,064 units.
Although the quarter proved “challenging,” the retailer said it saw signs of life with an improved holiday assortment that helped boost quarterly comps 9 percent. Gross margin descended to 43 percent of sales from 43.7 percent a year ago.
The stock run-ups by the two retailers came as the S&P Retail Index gained 7.57 points, or 1.5 percent, to finish the day at 510.93.
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye
“It’s passion that helps get anybody to a certain point and it’s what’s propelled me,” said Kith founder @ronniefieg, one of WWD’s 40 under 40: a group of industry notables who are changing the face of retail, fashion and beauty. Fieg, who opened a Manhattan flagship on October 7, began his career at age 13 as a stock boy and salesman for footwear chain David Z. “I think staying true to [my] beliefs, hard work and passion have gotten me to where [Kith] is today.” See the rest of the 40 at WWD.com. (📷: @vsteves) #wwd40
25-year-old @samweaving is about to break out this fall, starring in Netflix’s horror film “The Babysitter,” fittingly out today on Friday the 13th. That’s not the only place you’ll be seeing her, though — Weaving’s got a role Showtime’s “SMILF” and another alongside Frances McDormand and Woody Harrelson in “Three Billboards Outside Ebbing, Missouri.” Though she’s got a full plate at the moment, there’s one role she’s got her eye on: Marilyn Monroe. “I’m a little too young at the moment, but it’s on my bucket list,” the actress told WWD (📷: @dandoperalski) #wwdeye
BFF's Poppy Jamie and Suki Waterhouse celebrated the launch of their bag line Pop x Suki at Nordstrom last night. "The line is really about our friendship, and how we are so different but complement each other," said Waterhouse. 👯 (📷: Katie Jones) #wwdeye
After designing the new @louisvuitton and @bulgariofficial flagships and a @chanelofficial boutique opening in Japan, @petermarinoarchitect has another project on his plate: The Lobster Club. Located in the Seagram Building, it’s the famed architect’s first restaurant project in New York, serving up modern Japanese brasserie-style cuisine. Bronze hues, bespoke material detailing, blush and chartreuse tones and a heavy emphasis on Picasso can be seen throughout. Mark your calendars for Nov. 1 for the much-anticipated opening. (📷: @clint_spaulding) #wwdeye