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Talbots to reduce its corporate headcount

09
Jun '09
Trudy F. Sullivan (Talbots President and CEO)
The Talbots Inc announced results for the first quarter ended May 2, 2009. The Company also announced that as part of its strategic long-range plan to streamline operations and rationalize its cost structure, it has taken additional actions to reduce its corporate headcount, moving the Company closer to achieving its goal of $150 million in expense savings.

On a reported (GAAP) basis, first quarter net loss from continuing operations was $18.8 million or $0.35 per share, including restructuring and impairment charges of $6.4 million, or $0.12 per share, compared to last year's net income of $18.5 million or $0.35 per share for the thirteen week-period ended May 3, 2008, including restructuring and impairment charges of $3.8 million or $0.07 per share.

Also included in the Company's first quarter net loss from continuing operations is a tax benefit in the amount of $10.6 million or $0.20 per share. In accordance with SFAS No.109, paragraph 140, the Company allocated a tax benefit to its loss from continuing operations, offset by a tax provision of an equal amount charged to other comprehensive income, a component of shareholder equity.

On an adjusted basis, including the tax benefit and excluding restructuring and impairment charges, the Company's first quarter net loss from continuing operations was $12.4 million or $0.23 per share, compared to last year's net income of $22.3 million or $0.42 per share on a comparable basis.

Total sales from continuing operations for the thirteen weeks ended May 2, 2009 were $306.2 million compared to last year's sales of $414.8 million. Retail store sales for the thirteen weeks were $256.4 million compared to $345.1 million last year. Comparable store sales declined 26.9% for the thirteen week period.

Direct marketing sales for the thirteen-week period were $49.8 million, including catalog and Internet, compared to $69.7 million last year.

Trudy F. Sullivan, Talbots President and Chief Executive Officer, commented, “We are making steady progress in implementing our strategic initiatives to better position our company for long-term success. This includes the announced signing of an asset sale agreement for J Jill, the opening of eight upscale outlet stores, and additional actions that will further contribute to achieving our goal of $150 million in annualized cost reduction.”

“Looking at our first quarter results, sales remained difficult and while in-line with our expectations, we are not satisfied. We did have a substantial rebound in merchandise margin from the fourth quarter, and believe our merchandise assortments are getting stronger in our key item categories, including casual knits, sweaters, pants and accessories. That said, we are working quickly to incorporate our learnings and make the appropriate adjustments to our overall merchandise mix. Inventories remained tightly managed and we ended the quarter down 21% per square foot compared to first quarter last year.”


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