The Talbots Inc. on Thursday put its J. Jill brand on the selling block to focus on its core Talbots business, a decision that caused the specialty chain to withdraw its previously announced outlook for the second half of fiscal 2008.
The company, which purchased J. Jill in February 2006 for about $517 million in cash, said it plans to report third-quarter operating results on Nov. 25, when it will provide further details concerning its outlook. The incorporation of J. Jill into Talbots was considered a challenge from the start, but went forward based in part on the two retailers’ mutual focus on the mature 35-and-older woman and their geographical proximity. Talbots is based in Hingham, Mass., and J. Jill was originally headquartered in Quincy, Mass., just seven miles away.
“We have made great strides in reenergizing the Talbots brand and are encouraged by both our existing and lapsed customers’ response to our product and marketing efforts,” said Trudy F. Sullivan, president and chief executive officer of Talbots.
“In light of the current macroeconomic environment,” she continued, “we therefore feel it is a strong move to focus solely on executing the successful turnaround of our core brand. While we have made solid progress in improving the J. Jill brand’s operation, we have made the strategic decision to pursue its sale.”
Operating results of the J. Jill brand will be reclassified as a discontinued operation for the third quarter of fiscal 2008 and all prior periods.In addition, during the third quarter, Talbots completed the closure of the Talbots Kids, Mens and U.K. operations, all of which will also be reclassified to discontinued operations for the third quarter of fiscal 2008 and all prior periods.
The chain said given Talbots’ more than 60-year heritage, the company is confident it can “maintain its strong positive cash flow by redirecting all of its resources and capital toward its core Talbots misses’, petites, women’s, collection and accessories and shoes concepts. The company believes that this exclusive focus on the Talbots brand can generate significant return on investment and drive long-term increased shareholder value.”
Talbots outbid Liz Claiborne Inc. to acquire the struggling J. Jill Group Inc. in 2006, but that was before Talbots found itself in turnaround mode due to lackluster sales against the backdrop of a weakening retail sales environment.
Talbots said Thursday that comparable-store sales for the Talbots brand in the 13 weeks ended Nov. 1 declined 13.9 percent, with year-to-date comps down 10.9 percent. Total revenues for the quarter fell 13.8 percent to $357 million, while sales attributable to its stores contracted 12.2 percent to $303 million.
During the first half of the current fiscal year, Talbots’ net loss nearly tripled, hitting $23.4 million, or 44 cents a diluted share, from $8.1 million, or 15 cents, in the prior-year period. Meanwhile, first-half revenues declined 6.6 percent to $1.07 billion from $1.15 billion.
There are currently 282 locations operating under the J. Jill brand name versus 594 for the flagship brand.
Shares of Talbots declined by 11.1 percent to close at $6.70 Thursday. In the past 52 weeks, the company’s shares have been as high as $17.97 on Sept. 19 and as low as $6.48 on Jan. 15.
Also on Thursday, Bebe Stores Inc. said first-quarter net income fell 27.1 percent to $11.2 million, or 12 cents a diluted share, from $15.4 million, or 16 cents a share, in last year’s quarter. Sales in the three months ended Oct. 4 rose 1.4 percent to $163.3 million from $161.1 million a year ago. On a same-store basis, sales fell 10.8 percent during the quarter and were off 20 percent in October.
The Brisbane, Calif.-based company, operator of 306 stores under Bebe and other nameplates, said that in response to current sales trends, it is reducing its planned store openings for the year to 20 from 24 and reduced capital expenditures to below $30 million from the original plan of $32 million.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty