Talbots Launches Strategic Plan for Profitability
Hingham, Mass. Beset with cascading comp-store sales, The Talbots Inc. is rethinking its long-term growth strategy. At its 2008 Investor Meeting on Tuesday, the retailer said it is shifting to a design-led focus that will better reflect each brand’s unique identity. Comp sales at the retailer’s core brands, Talbots and J. Jill, declined 5.7% and 4.6% respectively for the fiscal year ended Feb. 2.
Under its new plan, Talbots expects to streamline operations, cut costs and inventories and focus on better merchandise assortments while implementing innovative marketing programs and more efficient business processes. Its key objective is to improve profitability by driving healthier operating margins on moderate sales growth.
Talbots plans to grow its plus-size Talbots Woman format by adding 35 locations during the next five years. It also will introduce a “Boutique” concept with a fuller assortment within its Talbots Misses stores. There will be an increased focus on accessories, which have historically produced strong margins, and the Talbots brand will tighten its shoe assortment to directly complement merchandise.
In addition, the company will pursue a new growth avenue for its namesake brand in the outlet sector, with the projected opening of approximately 40 Talbots Premium Outlets within three years.
Talbots plans to limit expansion of its J. Jill brand until the performance of its existing store network improves, after which it anticipates the potential for expanding the brand with womans, outlet and international concepts.
Across the board, the strategy calls for Talbots to remain focused on leaner inventories, sourcing initiatives and improved product flow. Currently, the company has 1,149 stores operating under the Talbots brand and 273 J. Jill stores.
Wal-Mart to sell earth-friendly CDs
SANTA MONICA, Calif. As part of Wal-Mart’s “Earth Month” the company is selling more than 20 Universal Music Group titles that come with special earth-friendly inserts. The inserts are made with special seed paper and, according to the companies, can actually bloom into wildflowers.
The inserts, in addition to being good for the environment, also offer consumers three free digital downloads from Universal Music. Universal also said that a number of its new CDs will be packaged in third-party certified, renewable recycled board and recyclable paper.
ODP urges rejection of Levan nominees
DELRAY BEACH, Fla. Office Depot is continuing to urge its shareholders to reject dissident nominees and elect the company’s nominees to its board of directors at its annual shareholders meeting this April.
In a proxy statement sent to investors, Office Depot said that Alan Levan’s proposed nominees would do little to help improve shareholder value. According to the statement, Levan’s company, Levitt Corp. has seen its share price fall about 93% over the past three years and that its subsidiary, Levitt and Sons, is in bankruptcy. Office Depot also noted that BankAtlantic, of which Levan is chairman and ceo and one of his nominees, is president of real estate, construction and development, share price has dropped approximately 75% over the past three years.
Office Depot also cited news reports that commented on Levan’s failing business ventures, as well as others that said that his nominees are not qualified to serve on Office Depot’s board of directors.
The company pointed out nominee Mark Begelman’s experience with Mars Music, a company he founded in 1997 that went bankrupt in 2002. According to Office Depot, many news reports attributed this failure to a flawed business strategy.
According to Office Depot, when Levan’s other nominee, Martin Hanaka served as chairman of Sports Authority from 1998 to 2003, the company saw its price fall by about 13%.
Office Depot stressed that its directors best understand the company and are well-suited to help the company grow.
“We strongly believe that removing two of the most experienced retailing executives from our board, including our current ceo who is driving the implementation of our strategic turnaround plan, would be highly disruptive, could delay the implementation of internal and external initiatives and could damage prospects for a successful turnaround,” Office Depot said in the proxy statement.