HINGHAM, MA-As Talbots Inc. begins its previously announced restructuring of the brand http://www.globest.com/news/1009_1009/gsrnortheast/164832-1.html,third-quarter results were better than expected, but still disappointing, according to Trudy Sullivan, the recently appointed president and CEO. “We know from research that our current merchandise is not satisfying our customer,” she said during a conference call.

“It lacks novelty and variety,” Sullivan continued, promising to reinvigorate the Talbots brand with fashion that is “more modern, sophisticated, inspiring and fun.” She also said the brand’s core customers are “incredibly loyal, and they’re counting on us.”

Key leadership posts are currently vacant, and Sullivan said some announcements are “imminent.” Phil Kowalczyk, COO, is now also serving as president of the company’s J.Jill brand. While the search is on to fill that post, the retailer also looks to attract additional creative talent. Meanwhile, Sullivan credited the strength of in-place management with “keeping the wheels on the bus.”

Total sales for the quarter were $556 million. By brand, store sales for Talbots were $366 million, down from $383 million in the year-ago quarter, while sales at J.Jill stores were $81 million, up from $77 million.

Total comp-store sales dropped 7.9%, but “greatly improved” at both brands in October, compared with August and September, management reported. For third quarter, Talbots’ comps declined 8.2% and J.Jill’s fell 6.5%. Sullivan said the negative comp performance in the Talbots’ brand resulted primarily from a 7%-decline in average transaction value.

The company has selected Publicas as its ad agency, and Sullivan expressed confidence “that their innovative approach will bring new energy to Talbots’ incredibly strong classic brand image,” and added, “we continue to make progress on a number of fronts.” She called it just “the tip of the iceberg,” and concluded, “we’re not ready to declare victory yet.”

Talbots currently operates 1,428 stores in 47 states, the District of Columbia, Canada and the UK. Of those, 1,157 are under the Talbots brand and 271 operate under the J.Jill nameplate. Both brands also sell through catalogs and on the Internet, and both target shoppers age 35 and older.

Following the conference call on Nov. 27, TLB common stock ended trading on the NYSE at $14.02, up nearly 6.4% for the day. This compares with a 52-week high of $26.71 on Dec. 15, 2006 and a 52-week low of $12.52 this Nov. 8.

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