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

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

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