Talbots to close 78 stores aimed at men, children
Refocus on women's apparel follows losses in 2 quarters.
BOSTON - Talbots Inc. will close its 78 children's and men's apparel stores to focus on its core middle-age female customer, a retrenchment that follows disappointing sales at Talbots as well as other specialty women's apparel retailers amid tough economic conditions.
In the Philadelphia area, five stores will close - Talbots Kids stores in Ardmore, King of Prussia, Marlton and Princeton, and a Talbots Mens store in King of Prussia.
Yesterday's announcement of the closures, affecting 800 employees, came as Talbots also warned that fiscal fourth-quarter sales have so far fallen below expectations at its 1,428 stores.
The warning, following two consecutive quarterly losses, spooked investors, who sent the stock to its lowest level in nearly a decade. Shares of Talbots fell $1.22, or 11.4 percent, to $9.46. The last time the stock sank below $10 was in October 1998.
The stock lost about half its value last year, and the company announced a strategic review in October, leading to yesterday's announcement of plans to close its 66 Talbots Kids stores and 12 Talbots Mens stores by September.
The 61-year-old company opened its first children's store in 1990 and its first men's location in 2003, departing from the Hingham, Mass., company's traditional focus on women. While the location of many of the children's and men's stores adjoining Talbot's women's apparel stores made it convenient for female shoppers to pick up clothing for others as well as themselves, the concept hasn't been a good fit, said Betty Chen, a Wedbush Morgan Securities analyst.
"They really weren't complementary to the overall focus of the company, which is 35-year-old-plus female customers," Chen said. "The kids' and men's stores were either neutral or loss-making overall to the rest of the company."
Talbots said its strategic review found the children's and men's stores did not "demonstrate the potential to deliver acceptable long-term return on investment."
Eight hundred full- and part-time positions will be cut, or about 5 percent of the company's workforce.
Talbots, which posted $2.2 billion in sales last year, said the closures will reduce revenue by about $100 million a year and yield $13 million to $15 million in operating savings.