Retailers' March same-store sales have busted out, but there's not much springtime optimism. Most retailers reported a rather lackluster month. (Talk about coming in like a lion and going out like, well, a bear.) It probably won't come as any surprise to those of you who are regular retail watchers that Talbots
Talbots reported March same-store sales down 3.4%, missing analysts' expectations for a slight increase of 0.1%. Total sales declined 3% to $195.4 million. Year to date, Talbots' same-store sales have declined 4.2%. The company admitted that customer demand petered out in the second half of March, describing that decline as "sharper than expected." Talbots also decreased its first-quarter earnings expectations on account of slowness in the catalog business, as well as markdowns on some of its apparel. Talbots now sees earnings of $0.49 to $0.53 per share, as compared to its previous guidance for earnings of $0.61 to $0.65 per share.
This year's late Easter holiday has proved to be the resounding excuse for many retailers' lagging same-store sales. If you examine the demographic that Talbots targets, though, it wasn't bad everywhere. Chico's
I suppose there could be some amount of forgiveness, given the fact that March melancholia seems to have hit the majority. However, I can't help but contemplate Talbots' myriad issues. The prognosis is more complex considering its upcoming acquisition of J. Jill
When I was perusing Talbots' same-store sales figures today, I also noticed that the company plans to open 46 new J. Jill stores after the acquisition is completed (J. Jill opened about 40 new stores last year and has approximately 200 stores now). My question: Shouldn't these companies work on improving existing strategy instead of expansion? Not to mention that Talbots is already borrowing money for the purchase of J. Jill in the first place. True, it is possible that the combined entity could successfully open new stores and fix the merchandise issues, but it seems that's going to be a pretty tall order.
I can't help but wonder whether shareholders should be concerned that Talbots is taking a whole lot of gambles in the near term. March is just a month, but to my way of thinking, Talbots has a much longer tightrope to walk in order to pull off its progressive long-term plans.
Alyce Lomax does not own shares of any of the companies mentioned.