NEW YORK — The “too” in Limited Too Inc.’s name had a distinctly negative connotation during the second quarter as too much fashion translated into too large a loss.
“We swung the fashion pendulum too far,” said Sally Boyer, who on Thursday was promoted to the new post of president and general manager of Too’s new retail concept, which has yet to be given a name. “As we reviewed the assortment over the past several weeks, we now believe we made Too look too junior, too extreme for our core customer and took away too much of the girly-girl influence that Limited Too has best been known for.”
Boyer’s comments, made on a conference call with analysts, came as the 537-unit New Albany, Ohio-based tween retailer on Wednesday reported a loss of $3.8 million, or 11 cents a diluted share, in the 13 weeks ended Aug. 2. The loss included a pretax impairment charge for the discontinuation of its Mishmash operation of $7.3 million, which subtracted 13 cents a share on an aftertax basis. In last year’s quarter, the company recorded a profit of $5.5 million, or 16 cents.
In addition to Boyer’s appointment, James Petty was promoted to president and general manager of the Too division. He had been executive vice president of stores and realty. Boyer had been president of merchandising. Both report to Michael Rayden, chairman and chief executive.
Overall sales for the latest quarter were $134.8 million, a 4.5 percent decrease from year-ago sales of $141.2 million, and comparable-store sales dipped 13 percent. While a few nonapparel items generated increases, virtually all hanging merchandise finished with declines.
Rayden acknowledged that, beyond a soft retail environment, Too’s difficulties were aggravated by the fact that “our back-to-school fashion was not exactly right for the Limited Too girl. We have tried to ‘age up’ our look in stores and in our catalog, but that is not what she or her mom really wants.”
Boyer said that although the major back-to-school trends — retro, preppy and vintage — offer its customers a new look, “customers are still not voting for it with their wallets.”As some believe that elevated price points are part of Too’s problem, the firm’s new concept will be a value-priced, off-the-mall specialty retail concept. Rayden said the firm has already signed 27 leases for 2004, the majority of which are slated to open during the first quarter. Seven of 18 Mishmash units will be converted to the new brand.
Boyer’s reponsibilities at the new concept will include planning, allocation, marketing, store operations, and merchandising and design. She joined Limited Too as a senior planner in 1991 after serving as merchandise planner with Too's former parent, Limited Brands. She was named executive vice president of planning, allocation and merchant operations at Too in February 2001, and Too’s president of merchandising in August 2002.
Petty joined the company as vice president of stores in 1997, following a 13-year career in stores and operations at Gap Inc. He was promoted to senior vice president of stores for Too in 2000 and later executive vice president of stores and realty in August 2002.
With b-t-s results still tepid, Too expects earnings per share to be between 12 and 15 cents, versus 31 cents last year, during the current quarter ending Nov. 1. That’s based on a forecast of a mid- to high-teens negative comp performance for the period.
For the first half of 2002, income fell 97.1 percent to $329,000, or 1 cent a diluted share, compared with earnings of $11.4 million, or 34 cents. Sales for the six months dropped 8.3 percent to $275 million over sales of $299.8 million.
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