Tween Brands Shifting to Low-Price Strategy
Chicago In a move to drive growth and profitability, Tween Brands Inc. said Tuesday it will convert approximately 560 Limited Too stores to its lower-priced Justice brand and close 26 others. Both brands are targeted at 7-14 year-old girls, with Justice priced an average of 20% to 25% less than the more fashion-forward Limited Too.
Once the change over is complete, the company will no longer operate any Limited Too stores. It will, however, continue to sell Limited Too product in Justice stores.
The move will give the Justice chain, which currently has 310 locations, about 900 stores.
“Limited Too was the brand that introduced great fashion to tween girls, but our customers are looking for the next great thing and their parents want more value for their dollar,” Tween Brands chairman and CEO Mike Rayden said in a statement.
The desire for cheaper apparel was dragging down the company’s performance, as same-store sales fell 11% at the Limited Too during the second quarter. Same-store sales rose 3% at Justice.
The company said the deal will save up to $25 million after taxes.
It will record an $18 million charge in the second half related to severance, store closings and other charges related to the transition.
Meanwhile, the company said on Tuesday that its poor springtime inventory choices and a sluggish economy kept shoppers away from its Limited Too stores.
For the quarter ending Aug. 2, the company lost $6.7 million compared with a profit of $2.1 million during the same period last year. Revenue rose 4%, climbing to $223.1 million.
Saralegui to represent Nestle Pure Life
GREENWICH, Conn. Nestle Waters North America has signed a two-year partnership agreement with Cristina Saralegui, an internationally-acclaimed Hispanic television personality. Under this agreement, the company reported, Saralegui will serve as spokesperson for Nestle Pure Life, appearing in print and broadcast advertising and online on behalf of the company’s new Vive Sanamente (Live Healthy) marketing campaign.
“I am thrilled to be collaborating with Nestle Waters on Vive Sanamente,” said Saralegui. “I want to educate Latino moms about the importance of teaching their children healthy habits that will last them a lifetime. There is no doubt that drinking water and exercising regularly are essential to maintaining a healthy lifestyle.”
Saralegui, host and executive producer of El Show de Cristina, one of the highest-rated programs on Spanish-language television, is also being featured in point-of-purchase consumer brochures and public relations programs.
Linens ‘N Things reports 21% 2Q sales decline
CLIFTON, N.J. Linens Holding Co. reported total sales of $504 million for its second quarter ended June 28. Net retail sales of $468.1 million for the quarter represented a 21.1% decrease over the same period in 2007. Total net retail sales for the quarter does not include $35.9 million in liquidation sales in accordance with the previously announced closing of 120 stores in the second quarter.
The decrease in second quarter net retail sales resulted from a comparable-store sales decline of 18.3% for the period and the net reduction of 105 stores from the prior year.
During the second quarter of 2008, the company opened two stores and closed 120 stores, as compared with opening seven stores and closing zero stores during the second quarter of 2007.
As of June 28, Linens ’n Things operated 475 stores in 46 states and seven provinces across the United States and Canada.
Due to its recent Chapter 11 bankruptcy filing, the company requires additional time to complete the preparation of its consolidated financial statements for the second quarter of 2008. The company is performing an impairment analysis related to certain of its tangible and intangible assets, which is not yet complete.