HINGHAM, Mass. — The Talbots Inc. is keeping its emphasis on rigorous expense control and merchandise improvement this year, with a new upscale outlet business the principal initiative.
The firm’s annual shareholders’ meeting — a 12-minute, no-questions affair at the town hall a few miles from company headquarters — was as lean as the current fiscal year is planned to be.
Calling 2008 the most difficult in company history, president and chief executive officer Trudy F. Sullivan said, “We are doing everything within our power to keep our operations lean and agile. Adversity is a great teacher.” Her remarks were addressed to directors and executives from Aeon Co. Ltd., Talbots’ majority indirect shareholder.
The $1.5 billion brand posted a net loss of $560.7 million last year, dragged down by discontinued operations, including the J. Jill brand, which it is trying to sell. The company declined to update its progress toward a deal.
Sullivan’s plans for the current year include the launch of a new retail concept called Talbots Upscale Outlet. The first eight of 12 units planned this year opened May 8 and are stocked with merchandise designed exclusively for the concept. Sullivan believes the unit will allow the company to reach customers who shop almost exclusively at outlet centers. The company will continue to operate liquidation outlets for past-season merchandise.
Also on the agenda for the year:
• Closing the higher-end Talbots Collection business following its June delivery. The company will use a good, better, best strategy under one label.
• Reducing capital expenditures 40 percent year-over-year, to about $27 million.
• Closing 16 Talbots stores this year. The company has not announced which doors will be shuttered, but said most have expiring leases.
• Reducing catalogue circulation to 34 million from 55 million. To conserve capital, the company will use more e-mail and grassroots marketing efforts, such as private shopping nights for top customers and their friends.
• Relaunching its footwear category. The company has hired a new designer and integrated most of the square footage of its adjacent Accessories & Shoe shops into its signature concept stores.
• Continuing to expand successful merchandise initiatives such as its “scarf bar,” currently in the top 25 doors and slated for further rollout. The company also plans to expand its new swimwear program, which is only sold through catalogues and online.