Hingham, MA–Talbots reported this week it has reversed first quarter losses and plans an aggressive new marketing strategy that will feature supermodel Linda Evangelista.
The company posted a net loss of $7.1 million, compared to a loss of $18.8 million last year, but after adjustments it recorded a profit of $21.7 million, versus an underlying loss of $12.4 million in 2009.
Total sales were up 4.7% to $320.7 million, with comparable store sales up 2.4% and retail sales essentially flat at $257.6 million.Direct marketing sales surged up 26.7% to $63.1 million, and the company’s results were boosted by a 21% rise in full-price selling, accompanied by a 31% fall in markdowns.
For the full year, the company expects sales up 3 to 5%, with adjusted earnings per share of $0.75-0.83.Talbots earlier this year pulled off a complex deal that let it reduce its debt and buy out its largest shareholder, Japanese retail company Aeon (U.S.A.) Inc., which held a 54% stake.
Evangelista Represents Tablots’ New ‘Face’
Trudy Sullivan, president and ceo, credits the stronger performance due to its core base, women age 35 and older, responding to updated merchandise offerings and better gross margins.
In laying out plans for the coming year, Sullivan said Talbots will spend $18 million on assorted marketing plans, $8 million more than the company’s original guidance. The face of the stepped-up marketing strategy will be Evangelista, who will appear in all Talbots advertising.
“We love Linda simply because she is so beautiful and she’s iconic and she’s 45,” Sullivan said. “She’s right in our target–our sweet spot. She’s a mom, and she has a lot of the attributes that our core customers absolutely love.”
Capital expenditures for 2010 are expected to be around $40 million, up $20 million from last year. Initiatives include stepped-up catalog circulation, increased efforts to attract customers through the Internet and sprucing up the look of its stores.