Women's apparel retailer Talbots (NYSE: TLB) has struggled to woo shoppers to its stores lately, and that trend is not likely to change anytime soon. The Massachusetts-based company had a disappointing quarter that saw it perform dismally on almost all fronts. In its wake, shares fell a staggering 40% as the company warned of further weak results.

A look at the numbers
Talbots' revenues fell to $301.3 million, down 6% from the same period last year. Same-store sales fell 8.2%. Despite heavy discounts, customer traffic continued to trend negative. Ouch.

Talbots is in the middle of some major changes, as it plans to close another 83 stores this fiscal year and 25 more next year. Plus, it intends to revamp its stores.

Moving further down the income statement, gross margin fell 800 basis points, to 35.6%, as the retailer felt the pinch of high cotton prices and high promotional expenditures. Though Talbots eked out positive net income, at $0.7 million, the figure doesn't make for good reading at all. The one positive tidbit of news in the recent Talbot release is that total debt was reduced by 8% to $86.8 million.

With these negative trends expected to continue in the next quarter, signs are more than slightly ominous at Talbots. Peer ANN (NYSE: ANN), for instance, has already seen its margins hurt by discounts and higher input costs.

And with margins expected to take an even bigger hit in the coming quarters because of more promotional activity, it is no surprise that investors heavily sold off the stock.

The recession has not ended for some, especially retailers. If you doubt that, ask the world's largest retailer, Wal-Mart (NYSE: WMT). The company has seen its U.S. same-store sales decline for eight straight quarters. As gas prices rise, consumers are staying farther away from discretionary spending. With consumers unwilling to spend, retailers are bound to struggle for a while till the economy improves, which brings us back to Talbots.

The Foolish bottom line
Talbots has already stated that the second quarter is showing negative sales trends. The company's bottom line should drop below last year's level. This may be a year of change, but for now Talbots seems more like a value trap than a solid Foolish bet.

Shubh Datta doesn't own any shares in the companies mentioned above. The Motley Fool owns shares of Wal-Mart Stores. Motley Fool newsletter services have recommended buying shares of and creating a diagonal call position in Wal-Mart Stores. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.