It's been a dizzying week for Talbots Inc. (NYSE:TLB) so far, with the company announcing a 20% cut in its workforce Tuesday, following the deep-discount sale of its J. Jill chain on Monday. The latest initiatives are the next chapter to the Hingham, Mass.-based women's retailer's failed attempt to spur growth and integrate its J. Jill purchase of three years ago.
When Talbots first acquired the J. Jill chain, the addition of a "more earthy, bohemian" product line seemed like a perfect fit to the retailer's existing more conservative offerings for the over-35 female set. But consumers, it seems, weren't receptive and the J. Jill addition was off the mark. What's next for Talbots?
For now, it seems the company is in survival mode. It's stopped paying dividends and had a number of rounds of job cuts with the latest 20% reduction, translating into 325 corporate-level positions expected to save the company around $21 million annually. But if sales don't turn around soon, which the company doesn't expect, there will likely be more restructuring, which may have to include shutting down some of its 568 stores in the U.S and Canada. The company said it expects earnings for the second quarter of 2009 to be in the range of approximately 50 cents to 58 cents per
share, excluding any restructuring and impairment charges.
Talbots' woes are not surprising, given the toll the recession has taken on retailers across the board. Bankruptcy has been the fate of some, including well known brands Filene's Basement Corp. and Circuit City Stores Inc. For more, check out Dealwatch: Retailers and bankruptcy. - Gerald Magpily
