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Retailers, consumers and prices

Check Out Line: Talbots’ makeover includes board

July 31, 2008

talbots3.jpgCheck out the majority owner of Talbots exerting more control.

The women’s apparel retailer, which has endured hardships in recent months including falling sales, job cuts, an executive departure and a credit problem, said on Thursday that Tsutomu Kajita would become chairman of its board.

Kajita is senior vice president of international operations for Japan’s Aeon Co, Talbots’ majority owner.

“The appointment of Mr. Kajita as non-executive chairman further signifies Aeon and its management’s commitment and confidence in our continued success and ability to execute our long range strategic plan,” said Talbots Chief Executive Trudy Sullivan in a statement.

Talbots is working hard to turn itself around after a string of fashion and merchandising missteps hurt sales of its classic fashions that target women over 35. The weak U.S. economy hasn’t helped either.

There is a new design team, and early reviews are positive.

Lazard Capital Markets analyst Todd Slater said the company’s new fall and holiday assortments were more “design driven” versus a “more traditional formulaic product development process.”

“While we weren’t able to preview entire floorsets, what we did see was more iconic, with the brand returning to its heritage, utilizing bold color (red), patterns (hounds tooth, plaid), directional fabrications (tweed), and iconic styles (the great white shirt, shift dresses, pea coats, totes, scarves and pearls),” Slater wrote in a research note on Thursday.

Jennifer Black, of Jennifer Black and Associates, waxed even more poetic.

“The collection in its entirety was everything we had envisioned and more.  The fabrics exuded quality.  The colors radiated the classic Talbots styling, the lines were clean and simple, and the styling was timeless.  The fall/holiday collection flows well together … The fits have been modified for today’s fashion style, but not changed as far as the fit specifications.  The waists on pants no longer cover the woman’s ribcage; gone are the days of the ugly, baggy, boxy fits,” Black wrote last week.

But Slater did have a warning for Kajita, whose company operates Japan’s Jusco chain of general merchandise stores.

“Current expectations (are) likely too high. Management is focused on reducing
inventory, which should continue to lead to improved merchandise margins. However, we believe current trends remain below plan, and near-term expectations appear to be getting too high,” Slater said.

Also in the basket:

GDP gets stimulus checks boost

Target offering Web customers installation services

CVS second-quarter profit rises

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