The Talbots, Inc. (TLB)
Q4 2008 Earnings Call Transcript
April 13, 2009 5:00 p.m. ET

Executives

Julie Lorigan - Senior Vice President, Investor and Media Relations
Trudy F. Sullivan – President, Chief Executive Officer and Director
Michael Scarpa - Chief Financial Officer and Chief Operating Officer
Gregory Poole – Executive Vice President and Chief Supply Chain Officer

Analysts

Neely Tamminga - Piper Jaffray & Co.
Jennifer Black - Jennifer Black & Associates
Tracy Kogan - Credit Suisse
Todd Slater – Lazard Capital Markets
Betty Chen - Wedbush Morgan
Roxanne Meyer - UBS
Janet Kloppenburg - JJK Research
Marni Shapiro - The Retail Tracker
Stacy Pak - SP Research

Presentation

Operator

Good morning, ladies and gentlemen. On behalf of Talbots, we would like to welcome you to the Talbots Incorporated conference call covering its fourth quarter and full-year 2008 earnings results. Today’s call is being recorded and at this time, all participants are in listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time.

I would now like to turn the call over to Julie Lorigan, Senior Vice President of Investor and Media Relations.

Julie Lorigan

Thank you and good afternoon everyone. Welcome to the Talbots Inc. fourth quarter and full-year earnings conference call. Today we have with us Trudy Sullivan, President and CEO; Michael Scarpa, Talbots Chief Operating Officer and Chief Financial Officer; and Greg Poole, our Chief Supply Chain Officer.

As a reminder, certain statements to be made today are forward-looking. These are based on assumptions and expectations of future events, which may not prove to be accurate. They involve substantial risks and uncertainties. Actual results may differ materially from those expected or implied. These forward-looking statements may be identified by such terms as “will,” “expect,” “believe,” “anticipate,” “outlook,” “target,” “plan,” “initiative,” “estimated,” “strategy” and similar terms or variations. All of our outlook and financial expectations and plans constitute forward-looking statements. We direct you to the cautionary statement being read at the end of this presentation and in our earnings release issued today, as well as in our recent SEC filings, all of which are available under the Investor Relations section at our website at www.thetalbotsinc.com

A replay will be available from approximately one hour after the conclusion of the call until end of day April 15, 2009. The webcast will also be available on the Investor Relations page of our website.

With that, I would like to turn it over to Trudy Sullivan.

Trudy F. Sullivan

Thank you, Julie. Good afternoon everyone and thanks for joining us. In a moment I will discuss Talbots’ results for the 13-week and 52-week period ending January 31, 2009. Mike will cover our financial performance, and then I will make some closing remarks. Greg is here to answer any questions you might have on the letter of preliminary intent we signed with Li & Fung. Given the comprehensive nature of our press release this afternoon, we will keep our prepared comments brief to allow sufficient time for your questions. So with that, let’s begin.

2008 was a challenging year to say the least. That said, I am proud of what we have accomplished in a very challenging macroenvironment. We have made a strong start in presenting a re-invented brand to our customers while still focused on our classic positioning, we have reinvigorated our product assortment and marketing voice with a fresh, relevant and exciting approach to classics, an approach we refer to as tradition transformed.

We have valuable learnings from our initial deliveries and we are rapidly incorporating these learnings as we proceed. We also invested in our direct business, refreshing our catalog design and imagery, increasing our circulation to target last and new customers, and revamping the visual presentation of our merchandise.

All channels are now in sync with the consistent brand message to the customer, wherever she chooses to encounter the brand. We have made the necessary operational decisions to focus exclusively on our core Talbots’ business by closing our non-core concepts and announcing our plans to sell J. Jill.

As we entered September 2008 we were pleased with the progress we had made, particularly with our merchandise and creative direction and our customer gave us high marks on both. In fact, this past fall was the first time since 2004 that we saw a favorable improvement in our consumer intent to purchase study, which increased 10 percentage points over the fall of 2007. And we improved further on this in January by another 5 percentage points.