• by Sarah Mahoney  @mahoney_sarah, April 2, 2008

Talbots is hoping that bigger will be better. The Hingham, Mass.-based women's retailer unveiled its new strategic plan, which includes adding about 35 new Talbots Womans stores over the next five years and beefing up marketing programs that "emphasize its ability to outfit all women, regardless of size," the company says.

While most stores catering to Baby Boomer women have been beat up in recent months, Talbots has really taken it on the chin. Not only has it been struggling with declining sales at its flagship brand, with same-store sales falling 6% in the most recent quarter, but performance has been particularly disappointing at its J. Jill division.

The line had been acquired to give the company a little bit of contemporary pizzazz, compared to Talbots' more conservative, business-oriented clothes. But women weren't biting, and same-store sales at J. Jill fell 6.3% in the quarter--all of which helped the company turn in a net loss of $171 million in the quarter, announced earlier this month.

"We hold a well-established position in the Baby Boomer market," Trudy Sullivan, president and CEO told investors, adding that the company intends to build on its assets with an "acute focus on branding and execution."

Just as Coldwater Creek--its rival--admitted to investors recently, Talbots concedes that much of its problem is due to unappealing merchandise. So Talbots says it will now become "a design-led organization, focused on delivering compelling merchandise assortments that reflect each brand's unique identity."

It will also expand into outlets--a growth avenue it hasn't explored before, which it says will "attract a new customer segment," while still providing an avenue to handle liquidation. It believes there is the potential to open about 40 outlet stores in three years.

Talbots executives say they will pay closer attention to shoe and accessory offerings. Those have historically delivered steady growth and healthy margins, the company says, and it hopes to enhance that performance by "dramatically tightening its shoe assortment and provide an edited selection that will also more directly complement its merchandise."

And finally, the company says it's putting the brakes on J. Jill expansion plans, and will "limit further expansion until performance improves." The turnaround strategy for J. Jill will center on better merchandise, more prospecting for new customers, and expanded marketing to build brand awareness. Once the brand is performing again, it says it will resume expansion plans, and believes it still has the potential to expand from the current 273 stores to 450.