Can These Styles Save Talbots?
IN A RECENT MARKETING SURVEY, Talbots asked a group of women, all of them above the age of 65, to describe the chain’s typical customer. The overwhelming response: “Someone older than me.”
Talbots was founded in Hingham in 1947, catering to a particularly New England sensibility that cofounder Nancy Talbot described as “simple but not contrived, gimmicky, or extreme, smart but not faddy, fashionable but not funky — chic and understated, the hallmarks of good taste.” And for a long time the company delivered exactly that — its clothes were even name-checked in the Official Preppy Handbook in 1980. Somewhere along the way, however, the admirable pursuit of good taste led to Talbots developing a stubborn reputation for frumpiness. These days, no matter how old you are, it seems that Talbots is making clothes for people older than you.
That perception was Trudy Sullivan’s main problem when she started as Talbots president and CEO four years ago, and it’s her main problem right now on this morning in March, as she’s presenting the company’s most recent financial numbers during a conference call with retail analysts.
Sullivan was hand-selected — plucked away from Liz Claiborne in 2007 — to turn around the fortunes of the 64-year-old women’s apparel brand. But the company has continued its bumpy ride throughout her tenure. After Sullivan took over, Talbots shed hundreds of jobs from its Hingham headquarters and shuttered its men’s and kids’ divisions. Despite these cost-saving moves, though, the company’s stock plummeted by 80 percent, to a low of $1.19 a share in December 2008 — which led to Internet chatter warning consumers against purchasing Talbots gift cards since the chain was in danger of going out of business.
The following year, Sullivan made the bold decision to unload the Quincy-based clothing retailer J. Jill, which Talbots, in a disastrous deal, had acquired in 2006 for $517 million. Sullivan sold the company for $75 million, a staggering loss, but the move helped Talbots climb out of debt. Still, the company’s earnings dropped so low in 2009 that Talbots landed on The Wall Street Journal’s retail deathwatch list.
After a few promising steps toward recovery in 2010, the company’s earnings dipped again, with a fourth-quarter loss of $2.8 million. And 2010 revenue dropped to $1.21 billion, down from $1.24 billion the year prior.