By and  on July 2, 2007

In a move that appeared to catch Liz Claiborne Inc. off guard, Trudy F. Sullivan, the corporation's president, resigned Thursday to become president and chief executive officer of Talbots Inc., effective Aug. 6.

She succeeds Arnold Zetcher, who led the company for 20 years and built it into a highly recognizable brand with a loyal following.

Though she has big shoes to fill, 57-year-old Sullivan seems like a strong fit with Talbots, considering she's an industry veteran with vast experience in vertical retailing and in catering to the misses' market. Also, she's a native of Wellesley, Mass., which is not far from the Hingham, Mass., headquarters of Talbots. She also owns a home on Cape Cod, and has long been a Talbots customer. Like Claiborne, Talbots and its J. Jill division target women 35 and over.

Wall Street applauded the Talbots appointment, pushing the stock up $2.77 on Friday to close at $25.03.

While Sullivan will be challenged to reverse the sagging sales and profits trends at Talbots and J. Jill, her move does raise the possibility of Talbots further building up its portfolio of brands, and examining the portfolio at Claiborne, which has also been struggling and is expected to shed some of its labels. Talbots bought J. Jill in February 2006, beating out Claiborne in a bidding war, and has an infrastructure that could support additional brands.

In an interview Friday, Sullivan said she will join Talbots with "no preconceived plans."

"My whole style has been intensively collaborative," she said. "I want to get in and learn. I'm going in with a clean slate to absorb."

By taking the Talbots top post, Sullivan breaks through the glass ceiling and joins a very small cadre of women running fashion retailers and brands, which includes Kay Krill at Ann Taylor, Sally Frame Kasaks at Pacific Sunwear, Angela Ahrendts at Burberry and Maureen Chiquet at Chanel. Sullivan also becomes a member of the Talbots board.

At Claiborne, she couldn't break through, and was passed over as ceo last year. She was the leading inside candidate but the company selected William L. McComb, who worked as a group president at Johnson & Johnson, to succeed Paul Charron.It appeared that Sullivan was recently dealt another disappointment when a management shake-up, announced June 20, shifted her from serving as president of the entire corporation, to supervising the "partnered brands," a compilation of labels including Liz Claiborne, Monet, Dana Buchman and Ellen Tracy, while keeping the president's title. Jill Granoff was promoted to executive vice president of direct brands, which includes "power brands" like Juicy Couture and Lucky Brand, effectively placing her on the same level as Sullivan.

Sullivan disputed speculation she was no longer content at the $5 billion Claiborne and wanted out. "I would have been very happy to stay put at Liz," Sullivan said. "Talbots is the only thing that would have pulled me out. It's thrilling. Talbots is such a distinguished brand. I've known it for years."

She informed McComb about her move Thursday after the market closed. "We've become good friends," Sullivan said. "I have tremendous affection for him. It was emotional for both of us." Nevertheless, "I feel it's a great time for me to leave. There is tremendous management depth in the company."

Asked about the health of the Claiborne brand, Sullivan said, "The performance in the last couple of years has been not as great as the period before. It is going to be fully addressed," at the July 11 investors meeting. "It's time for a strategy change. Claiborne has just successfully gone through a ceo succession that Talbots is going through."

Talbots, Claiborne and other firms catering to women 35 and older have been dragging, partly because the competition is tougher, with many more stores and labels, from J.C. Penney Co. to Macy's, Target and Kohl's working harder to tap the demographics, and partly because of internal issues. The $2.23-billion Talbots saw earnings fall to $31.6 million last year, from $93.2 million the year before. In the last quarter, profits were down to $5.2 million from $27.4 million the year before.

"The customer is demanding a more modern approach to what her clothing needs are," Sullivan explained. "But don't equate being modern as contemporary," Sullivan warned. "There were times in Talbots' history when being more contemporary was not successful."She said Talbots, despite its current difficulties, remains "a pristine brand with an incredibly loyal customer." Ironically, decades ago, when she was a buyer at the former Jordan Marsh in Boston, Nancy Talbot, the founder of Talbots, offered Sullivan a job, which she didn't take. "She was a formidable force in the industry," Sullivan said. "She had tremendous vision for what her consumer wanted."

Sullivan chose to stay in department stores, moving from Jordan Marsh to Filene's, and then in 1985 launched T. Deane, a vertically integrated chain for large sizes, which no longer exists. Subsequently, she became president of J. Crew, running the retail and catalogue operations and expanding the business from 20 to 100 stores. She joined Claiborne in 2001.

"Liz Claiborne doesn't control its whole destiny," Sullivan said. "It's a wholesale brand. Talbots is a vertical brand that can control its destiny. There is so much in place that is terrific. Talbots has one of the best-selling cultures in the industry. The stores are beautiful, and the people in the stores are very motivated."

She said J. Jill has "the same attractive consumer segment. It's not cannibalistic of the Talbots consumer. It's more relaxed, artisanal and still very leverageable."

Jennifer Black of Jennifer Black & Assoc. called Sullivan's job change "a great loss" to Claiborne and "a pivotal point" for Talbots. "Trudy's background is perfect, having been president of the J. Crew brand. She has an intimate understanding of specialty retail, catalogue, e-commerce, as well as a multibrand strategy. We believe she has a clear vision of what the Talbots brand stands for and how to reinvigorate life back into the brand and the merchandise. Trudy also knows the J. Jill brand intimately, as Liz Claiborne had done detailed due diligence prior to making an offer to buy J. Jill. Trudy can attract talent and will empower people, which should lead to great product at both brands and a very changed company. We like the valuation of Talbots and we would be buyers of Talbots now."

"Trudy can put her mark on the company," said Dana Telsey, of Telsey Advisory Group. "There is a lot of opportunity to expand operating margins and from a merchandise perspective, updating the brand to be modern. Her strength is in her soup-to-nuts understanding of the product and the customer.""Trudy's contribution at Liz was very significant. She was very much excited about the future of Liz," said William Susman, president of Financo Inc. "But Talbots is a once-in-a-lifetime opportunity for her. Her merchant's sensibility, her organizational skill set and general strategic vision will enable her to continue to move Talbots in a great direction. It's a really good fit. I don't think her move was about Liz. It was about another opportunity."

"For the past six years, Trudy has been an integral part of the company's management team, helping shape and implement strategy, and we thank her for her many contributions," Claiborne's McComb said in a statement.

He said that Sullivan's president's position is being eliminated, as part of the ongoing restructuring, and that Claiborne is close to hiring an executive vice president of its newly formed partnered brands division.

For Zetcher and the search committee at Talbots, "The most important thing was to find someone who truly understood our customer," Zetcher said. "Trudy is somebody that everybody pretty much knows, and she clearly understands our customer."

Zetcher continues as chairman through March 2008, and will continue full-time until Labor Day through a transition. Then he expects to be off-site, though still available to the team and involved in industry associations such as the National Retail Federation.

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