With the report of a weak fourth quarter and fiscal year, women’s apparel cataloger/retailer The Talbots on Feb. 5 said it will lay off about 370 employees and close 20 of its stores.
The layoffs, which are expected to save the company about $22 million in fiscal 2009, represent about 17% of its workforce. The company declined to give a breakdown of the staff cuts by division, but senior vice president of investor and media relations Julie Lorigan says Talbots will be reducing staffing levels in its retail stores and call center.
Talbots, which includes women’s apparel cataloger/retailer J. Jill, currently operates more than 800 stores in North America. The retailer is also slashing administration, marketing and store operations costs. The cuts are part of a reorganization geared to save about $150 million.
While the company will halt certain capital expenditures, including new construction, it will continue with the rollout of its new upscale outlet stores; the revamping of its e-commerce site; and the renovation and refurbishment of some existing stores. “We’re streamlining our practices and processes to be more efficient,” Lorigan says. “We’ve cut programs and discretionary spending in order to stay competitive.”
Talbots’ total sales for the fiscal fourth quarter ended Jan. 31 were $328 million, compared to last year’s sales of $428 million. Sales for the fiscal year ended Jan. 31 were about $1.5 billion, compared to $1.7 billion reported for the same period ending Feb. 2, 2008.
Retail sales for the 13 weeks were $279 million, compared to $361 million last year. For the 52 weeks, retail sales were about $1.3 billion, compared to a little over $1.4 billion last year. Same store sales declined 24.6% and 14.2% for the fiscal quarter and year, respectively. Direct sales, including catalog and Internet, for the 13-week period were $49 million, compared to $67 million last year.
Talbots also reports that Aeon Co., its majority shareholder through a subsidiary, has agreed to provide the company with a $200 million unsecured term loan facility to pay off existing debt related to its acquisition of J. Jill in 2006.
As reported previously, the company is trying to sell the J. Jill brand. When asked how soon Talbots might be making a decision about the future of J. Jill, Lorigan would only say that “the process is moving forward.” Talbots does not plan to update its progress or disclose developments with respect to the sale of the J. Jill brand “unless or until a definitive transaction is entered into,” she says.