Talbots Q2 earnings dip

US clothing retailer Talbots realized a net loss of $3.9 million (£2.05 million) for the second quarter ended 29 July. The loss includes acquisition costs and adjustments. Consolidated sales for the period were $571 million. The Talbot brand reported retail sales of $404 million, up from $389 million last year. The J Jill brand had retail sales of $73 million. The brand accounts for about 20 percent of the total sales volume. The company also reported a rise in same store sales of 1.3 percent. Same store sales for the Talbot brand rose 3.0 percent, while the J Jill brand reported a decline of 8.2 percent. "Our second quarter results were positively driven by strong sales of our core Talbots brand apparel, which started to gain traction in early April," said chairman, president and chief executive Arnold Zetcher in a statement. "We saw particularly strong selling trends across all Talbots brand channels throughout June and July, which offset much of the softness in sales of our J Jill brand merchandise during the quarter." He added that this is the first time the company has released operating results as a combined multi-brand specialty retailer. The company opened three new Talbots stores and five J Jill stores during the quarter. It now has a total of 1,297 stores, 1,087 of which are Talbot stores and 210 of which J Jill. The retailer plans to open 69 stores in the second half, with a total of about 1,366 stores by the end of 2006.

The total consolidated net income for the company was $23.5 million for the first half, while retail sales rose to $1,024 million. Same store sales increased 1.1 percent. "We have made significant progress with our merger integration efforts with J Jill, and identified various synergy opportunities in sourcing, distribution, store operations and back-office functions," said Zetcher, adding that the company was "confident in our ability to deliver in excess of $30 million in cost savings in fiscal 2007, up from our original estimate of $25 million."