Talbots Plans 69 New Units

The Hingham, MA retailer said it also expects to open 40 Talbots stores in addition to the three Talbots and five J. Jill stores opened during the second quarter, bringing the firms total store holdings to 1,366.

News of the firm's expansion plans came during a conference call announcing that the J.Jill acquisition had hurt company profits and put Talbots in the red.

Charges related to that acquisition sent losses for the quarter ending July 29 tumbling to $3.9 million, or 7 cents per share, compared to the same quarter in 2005 when profits were $18.9 million, or 35 cents per share. Excluding the costs associated with its $517 million acquisition of J. Jill Group and a stock option expenses, Talbots reported a profit of 10 cents per share. Despite the quarterly loss, the upscale women's clothing retailer said revenues were strong at $571.4 million, up from $449.6 million during the same quarter last year, with sales at stores open at least a year up by 1.3%.

Talbot's chairman, president and chief executive officer Arnold B. Zetcher said second quarter results were driven by strong sales of the company's core Talbots brand, which offset much of the softness in sales of its J. Jill branded merchandise.

Only 20% of all sales came from its J. Jill brand, he said. Zetcher said the firm has implemented several key initiatives, among them a broader selection of styles, a better balance of entry-level priced merchandise and strategic adjustments to the company's product flow, to enhance the momentum of both brands.

For the remaining six months, Talbots expects low single digit comparable store sales increases at both its Talbots and J. Jill outlets with per share earnings, excluding anticipated acquisition and other expenses, to be in the range of 81 cents to 86 cents per share.