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Talbots implements a $50 million cost-cutting plan
Internet Retailer calculates web sales declined 6.7% in Q3.
The third quarter was another tough one for The Talbots Inc.
In the wake of declining sales and the search for a new CEO, Talbots, No. 112 in the Internet Retailer Top 500, is embarking on a cost-cutting plan to reduce its annual operating costs by $50 million.
For the third quarter ended Oct. 29, Talbots reported:
- Internet Retailer calculates web sales decreased 6.7% to $36.3 million from $38.9 million in the third quarter of 2010. That calculation is based on year-to-date financial reports that show the web accounts for about 13% of all sales.
- Total revenue declined 6.6% to $279.5 million from $299.1 million.
- Direct marketing sales declined year over year 12.8% to $49.7 million from $57 million.
- Comparable-store sales declined 4%.
- Net loss was $22 million compared with net income of $17 million in the third quarter of 2010.
With sales harder to come by, CEO Trudy Sullivan says Talbots will implement a number of programs to reduce spending. Talbots will cut about 9% of its corporate work force and reduce its marketing spending by an undisclosed amount, suspend national advertising and television campaigns, and implement other measures. Sullivan will retire as CEO once the company has named a successor.
“Going forward, we are focused on product execution, aggressive inventory management, the completion of our new $50 million annualized cost reduction initiative and the ongoing implementation of our store reimage and store rationalization programs, as well as the expansion of our upscale outlet business,” says Sullivan.
For the first three quarters, Talbots didn’t report web sales. But other numbers include:
- Total revenue declined 7.5% to $851.9 million from $920.5 million in the first three quarters of 2010.
- Direct marketing sales declined year over year 9.8% to $153.3 million from $169.9 million.
- Net loss was $38.6 million compared with net income of $13 million in the first three quarters of 2010.