Talbots (NYSE: TLB) continues to struggle as revenues take another plunge. The Massachusetts-based company recently released its second quarter results, and the numbers were anything but impressive.

Revenues have been falling for some time now. The first quarter of 2011 saw lower revenues compared with the same period of 2010. That trend, it appears, is continuing. Revenues in the latest quarter dropped almost 10% to $271.1 million, accompanied by a huge operating loss of $33 million against a profit of $11.9 million in the year-ago quarter.

Action -> Reaction -> Action
The dip in revenues was primarily due to very low customer response to the spring and summer merchandise collection. Not only did the collection fail to do well, but Talbots had also spent a significant amount on promoting the collection. The only consolation is that Talbots isn't struggling alone. Peers like Coldwater Creek (Nasdaq: CWTR) and New York & Co. (NYSE: NWY) are also witnessing huge operating losses.

Talbots is focusing on becoming leaner and agile. This year, the company has opened seven new upscale stores in premium locations and has shuttered 15 other stores, with plans to close another 110 by 2013. It intends to use its available cash balance to fund its operations, working-capital requirements, and strategic initiatives. Management is already on its toes to improve the efficiency and effectiveness of its operations, and positive reports on September's sales are also rolling in. The new figures seem to be on the higher side, and this news has alleviated some performance-related concerns.

Foolish bottom line
With improving performance in the third quarter and with well-thought-out growth strategies like trimming down the operational structure and focusing on upscale stores for higher revenue generation, Talbots is giving the investors a ray of hope. The company also reported a change in leadership. With all these factors coming into play, I think the company might just swing back and give its shareholders a reason to smile. My advice to Foolish investors is to keep an eye on this stock.