Hingham, Mass. The Talbots posted a narrower-than-expected quarterly loss on Wednesday as its ongoing sales weakness was offset by cost-cutting and restructuring.
Talbots posted a net loss of $24.5 million for the second quarter ended on Aug. 1, compared with a net loss of $25 million a year earlier. Sales from continuing operations fell 23% to $304.6 million. Same-store sales plunged 24.9%.
Trudy F. Sullivan, Talbots president and CEO, commented, “It is important to note that we are beginning to see greater benefit from the strategic initiatives we put in place. We ended the second quarter with a substantial reduction in operating expenses and a solid increase in merchandise margin, all of which contributed to a significantly better-than-expected bottom line performance. We are especially pleased with our inventory position as we enter the third quarter.”
The company said its deal with an affiliate of Li & Fung is on track to be completed by mid-September. Li & Fung will become the exclusive global apparel sourcing agent for nearly all Talbots apparel, a move that should help Talbots cut costs and bring items to market faster.
In other initiatives, the retailer noted it launched its upscale outlet concept in May 2009, and ended the second quarter with 10 upscale locations. It plans to add eight additional outlet stores by yearend, including seven conversions of existing stores. Talbots said it continues to view its upscale outlet concept as a significant growth vehicle, with the potential to open 75 to 100 stores.