The Talbots Inc. implemented a wide variety of changes during 2009, updating its merchandise mix to include more youthful designs, relaunching its Web site and promoting its Red Line Phones – in-store telephones that link to its telemarketing center.
While its total sales fell, the women’s apparel marketer slashed its net loss for the full year from 2008’s level, and even managed to turn a profit during its most recent fourth quarter.
Talbots, which generated just under $1.5 billion during its fiscal 2008, saw its revenue drop to $1.24 billion in 2009. But the company, which had racked up a net loss of $555.7 million in fiscal 2008, cut its net loss to $29.4 million.
It cut its loss primarily by trimming more than $200 million out of its 2008 cost of sales, buying and occupancy expenses, and another $120 million from general and administrative expenses. It also placed a much higher premium on selling merchandise at full cost, eschewing its reliance on promotional and clearance sales it had exhibited in years past.
“We are definitely on the right track,” said president and CEO Trudy Sullivan during an earnings conference call. “We are not overly promotional. We are really driving our business through full price selling, loyalty programs for our customers. I am actually pleased with the evolution of our full price to markdown business.
For the full year, direct marketing sales, including catalog and Internet, declined 11% to $207.7 million, compared to $233.6 million last year. But the fourth quarter saw an exact reverse of this, with DM sales rising 11% to $54.7 million from $49.2 million. Total fourth quarter sales for 2009 were $315.9 million, compared to $327.9 million a year earlier.
During the fourth quarter, store associates “aggressively” promoted direct marketing sales that originated within its stores through its use of Red Line Phones, which offer direct lines to its telemarketing centers, Sullivan added.
The company also re-launched its Web site, which according to Sullivan offers greater functionality with enhanced visuals, navigation and product information and a strong emphasis on personalization of content and recommendation.
Earlier this month, Talbots began adjusting its in-store merchandise mix based on new items it had “seeded” within its most recent catalogs, Sullivan said during the earnings call. These results are not reflected in its fiscal year earnings. Talbots’ fiscal year ended Jan. 31.
“You will see us continue in that line and even increase it as we get our learning from our initial data,” Sullivan added.
