Talbots Inc. said Friday it would exit its Talbots Kids and Talbots Mens businesses, shuttering 78 stores, by the fall. The company also said fourth-quarter results are “trending below” forecast.
The company currently operates 66 kids’ units and 12 men’s stores.
The Hingham, Mass.-based retailer said the decision to exit men’s and children’s wear “is part of Talbots strategic business review that was announced on Oct. 9, 2007, which is expected to be completed in the first quarter of 2008. The strategic review revealed that these concepts did not demonstrate the potential to deliver acceptable long-term return on investment.”
The company is now focusing its efforts on its core businesses, which include Talbots Misses, Petites, Woman, Collection, Accessories & Shoes and J. Jill Missy, Petites and Womans. Trudy F. Sullivan, who took over as president and chief executive officer last July, said in a statement the move is “very important” and “will greatly contribute to our ability to focus and reinvigorate our core brands and provide sustainable long-term shareholder value. 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.”
Exiting men’s and children’s wear is expected to cut into sales by $100 million, but the retailer said it currently expects “that the ongoing operational benefit resulting from these closings would be approximately $13 million to $15 million,” which translates to 15 to 18 cents a diluted share.
For more, see Monday’s issue of WWD.