HINGHAM, Mass. — With its debt to former majority stakeholder Aeon wiped clean and cash in hand from a merger with BPW Acquisition Corp., The Talbots Inc. aims to use the new liquidity to spruce up and diversify its store base.
“The strong capital structure gives us the ability to move forward and pursue our plans for growth,” president and chief executive officer Trudy F. Sullivan said at the retailer’s brief annual meeting here Thursday.
Although Sullivan has aggressively cut the retailer’s operating costs and revamped the merchandise to be slightly younger and more colorful, it’s been a tough few years for the misses’ specialty retailer. Comparable-store sales dropped 19.3 percent last year, reflecting drops in total transactions and dollars spent.
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Sullivan said she hopes to keep up the momentum from a better-than-expected fourth quarter, when the retailer posted a $4.1 million profit. Speaking with WWD after the meeting, Sullivan said store design upgrades — which will be rolled out according to a national segmentation strategy that marks stores as “premium” or “classic” — were tested extensively in 2009. She did not give specifics about the flavor of the changes, but said red will remain a signature.
Renovations will begin in the third quarter. Talbots also will expand its outlets, to between 60 and 70 units from the current 18, within three years. Stores comprise more than 80 percent of Talbots’ revenues, roughly $1 billion in 2009. Total revenues declined 17.4 percent to $1.24 billion last year.
“This is a multiyear project,” the ceo said. “We’re just in the beginning steps.”
She said merchandise changes generally have been well received, according to feedback from the retailer’s best customers. Pants, accessories and sweaters are top performers. The company has closed its overseas offices in favor of a comprehensive sourcing partnership with Li & Fung.