• by Sarah Mahoney  @mahoney_sarah, August 14, 2008

Adios, Limited Too. Hello, Justice. After announcing that it had swung to a loss for the second quarter, Tween Brands says it will refocus its business under a single brand name, converting some 560 of its Limited Too stores to Justice.

Both brands target the coveted tween market--girls ages 7 to 14. But Justice, which offers price points some 25% lower than Limited Too, has been a stronger performer, with double-digit comparable store gains in the last 14 quarters. (This quarter, however, Justice same-store sales gained just 3%.) Limited Too, on the other hand, has languished, with same-store sales falling 11% for the quarter.

The company says that at the end of the conversion period, it will have more than 900 Justice stores--up from the current 310--and will no longer operate any Limited Too stores in the U.S., although it will continue to sell some Limited Too-branded clothes at Justice stores.

Tween Brands, based in New Albany, Ohio, says it will also close 26 underperforming Limited Too stores, and consider an additional 90 former Limited Too locations for off-mall relocation under the Justice brand. "In a limited number of prior conversions from Limited Too, the new Justice stores have done equal or more volume, and in a few cases, significantly more," the company says.

Saying that the new strategy capitalizes on both the economic trend toward more affordable clothes and the strength of the Justice brand, the company also acknowledges that while Limited Too--which helped pioneer the tween category with its launch back in 1987--is a brand that's ready to be put out to pasture. "Our customers are looking for the next great thing, and their parents want more value for their dollar," it says.

For the quarter, it posted a loss of $6.7 million, compared to net income of $2.1 million in same period a year ago. Sales increased 4% to $223.1 million.

"Our results are extremely disappointing," the company concedes in its release. "While we have corrected Limited Too's spring merchandising difficulties, the macro-economic trends we began to see affecting Limited Too in the last several quarters accelerated dramatically in the second quarter. We don't see these macro-economic trends changing any time soon and believe we will be well positioned to capitalize on these trends through our single store brand strategy."

For the remainder of the year, it says it expects a comparable-store sales decline of 6% to 9%.