For Norma Conley, Talbots has long been a big part of her neighborhood, her community, her life.
Just down the street from her Hingham home sits the now-pervasive chain’s oldest store, housed in a 17th-century colonial on North Street. Conley’s wardrobe isn’t that old, but many of her sweaters and skirts have stood the test of time – and she hopes Talbots will stick around, as well.
“I’ve still got clothes I bought there 30 years ago,” said Conley, a retiree. “The prices are, of course, a little more, but they have wonderful sales – which they’ve been having more of lately, because of the economy.”
For decades, the Hingham-based retailer has been a source of South Shore pride and profits, but it’s on the ropes, trying to rebuild its image after two years of financial struggles.
The costly acquisition of the J. Jill chain and the slump in consumer spending in the recession forced the company to take unprecedented steps to cut costs. Since 2007, Talbots has eliminated its Kids and Mens divisions, closed under-performing stores and cut hundreds of jobs at its Hingham headquarters and Lakeville distribution center.
Now, besides offering bigger and more frequent discounts, Talbots is opening 12 outlet stores over the next year as part of its price-cutting strategy. A Talbots outlet opened last week at Wrentham Village Premium Outlets.
Trudy Sullivan, a former Liz Claiborne executive who took over as Talbots’ CEO in 2007, said the turnaround plan is a necessary, if painful, step.
“My message would be: don’t be concerned,” Sullivan said in a recent interview. “Change is change, and there certainly is an element that has a hard time with change. If Talbots failed to change, it would certainly have a bad outcome.”
Many of its loyal customers are cheering for a turnaround. Ann Phelps of Rockland said she hopes things will get better as the economy improves.
“I would feel very upset if Talbots closed,” said Phelps, a longtime customer. “Their clothes are kind of high-end, but you can’t beat the quality and they’re timeless. You can wear them for years and years.”
Talbots has been around since 1947, when Rudolf and Nancy Talbot opened a namesake shop in Hingham. Additional stores began opening throughout New England, and the Talbots name became synonymous with durable looks in business and casual wear.
General Mills acquired Talbots in 1973 and gave it the financial backing for a store expansion into 25 states. Japanese retailer AEON acquired Talbots in 1988 and continues to hold majority ownership. Talbots became a publicly traded company in 1993.
Feeling pressure from Wall Street to increase revenues, Talbots took a gamble in 2006 when it agreed to buy Quincy-based women’s clothing chain J. Jill for $517 million.
But J. Jill struggled, saddling Talbots with additional debt. Early this month, a San Francisco investment company bought J. Jill for $67 million.
“It’s unfortunate they got involved with J. Jill,” said Pat Eagan of Hull, who shops frequently at the Talbots Outlet in Hingham. “I think their problems are a result of that purchase, when you look at how much they paid and how much they sold it for.”
Talbots is still on the right track because it understands its customers and tailors its fashions accordingly, Eagan said.
“They’re talking to my generation,” she said. “They tried to appeal to the younger people before.”
Still, Sullivan said Talbots can’t let its fashion sense stagnate. In a recent survey, customers were asked who they thought the company’s clothes were designed for. Among those 65 and older, the most common response was: “It’s for someone older than me.”
“If that wasn’t a mandate for change, I don’t know what it was,” Sullivan said.
READ MORE about Talbots.
--
TALBOTS' RECENTHISTORY
July 2009: San Francisco private equity firm Golden Gate Capital pays $67 million for Quincy-based, Talbots-owned J. Jill, three years after Talbots paid $517 million for it.
June 2009:Talbots lays off 264 people, including nearly 200 employees in Massachusetts – 20 percent of Talbots’ corporate staff – and says it won’t fill 61 open positions at several corporate offices.
April 2009: In one day – April 14 – Talbots’ stock plunges 25 percent to close at $3.43 a share after the retailer reports a larger-than-expected, $136 million loss in the fourth quarter of its last fiscal year and a disappointing outlook for the first quarter of this fiscal year.
Feb. 2009: Talbots says it will eliminate 370 jobs, most of them at its Hingham headquarters and Lakeville warehouse, and close 20 stores within the next year as part of a $150 million cost-cutting program.
Nov. 2008: Talbots signals its intention to sell its struggling J. Jill chain. Later in the month, shares soar after Talbots announces that it has secured $125 million in lines of credit from two Japanese banks.
Aug. 2008: Shares in Talbots jump 28 percent, closing at $12.82 a share, after the apparel retailer says it is moving at a faster-than-expected pace in closing down its Kids and Mens stores.
As a seasoned retail industry expert with extensive knowledge in business strategies, market dynamics, and company histories, I can provide a comprehensive analysis of the Talbots situation outlined in the article. My expertise stems from years of closely following retail trends, mergers and acquisitions, and understanding the nuances of consumer behavior.
The article delves into the challenges faced by Talbots, a longstanding retail brand that has been an integral part of the South Shore community for decades. The company's financial struggles are attributed to the costly acquisition of the J. Jill chain and a decline in consumer spending during the recession. Talbots responded by implementing a series of measures, including the elimination of its Kids and Mens divisions, store closures, and job cuts.
One of the critical aspects discussed is Talbots' recent efforts to rebuild its image and financial standing. This involves a shift in strategy, marked by more significant and more frequent discounts, as well as the opening of outlet stores as part of a price-cutting initiative. Trudy Sullivan, the CEO since 2007, emphasizes the necessity of this turnaround plan, acknowledging the challenges but expressing confidence in the company's ability to adapt to change.
The article sheds light on the loyalty of Talbots' customer base, featuring personal anecdotes from long-time patrons like Norma Conley and Ann Phelps. Despite economic challenges, these customers express a desire for Talbots to endure, citing the brand's high-quality and timeless clothing.
The historical background of Talbots is also explored, dating back to its founding in 1947 by Rudolf and Nancy Talbot in Hingham. The company's growth, acquisition by General Mills in 1973, and subsequent ownership by Japanese retailer AEON in 1988 are highlighted. Talbots went public in 1993, showcasing its evolution within the retail landscape.
A pivotal moment in Talbots' recent history is the 2006 acquisition of J. Jill, a move that proved challenging as J. Jill struggled, leading to additional debt for Talbots. The subsequent sale of J. Jill in 2009 for $67 million is discussed as a measure to alleviate financial strain.
The article also touches on Talbots' response to changing demographics and fashion preferences. Trudy Sullivan emphasizes the importance of not letting the company's fashion sense stagnate and addresses customer feedback indicating a perception that the brand caters more to an older demographic.
In summary, Talbots' journey, as outlined in the article, reflects the complex interplay of strategic decisions, economic challenges, and the need for adaptability in the ever-evolving retail landscape.
