Women's Chains Languishing As Mom Puts Herself Last

While apparel sales have been suffering for months now, there's plenty of evidence that Mom is putting herself last on the list, as specialty retailers who target Baby Boomers turn in horrific results.

Chico's FAS, which runs a chain of clothing stores targeting Baby Boomer women, says its sales for the third quarter dropped 5.2% to $394.2 million, while net earnings fell to just $2 million from $23 million a year ago, despite the company cutting $6.9 million from its marketing budget in the quarter. On a same-store basis, sales fell 17% at its Chico brand stores.

And while the company says the results reflect the poor economy and declining consumer confidence, "we continue to strive to provide our customers with merchandise that is both compelling in fashion terms and affordable. While we are committed to keeping our balance sheet strong and preserving an appropriate amount of cash, it is vital that we continue to invest in our brands and position ourselves to recapture sales and gain market share once the economy improves."



So in addition to trimming costs and conserving cash, the company also says it has entered a new $55 million credit deal with SunTrust. Saying it has no immediate plans to draw on the new facility, the company says it "increases our financial flexibility and further reinforces our ability to successfully emerge from this economic crisis."

The Talbots, Inc., which also has secured new credit agreements, turned in a third-quarter loss of $14.8 million, compared to a $0.9 million loss in the same period a year ago. Total sales fell to $357 million versus $414 million in the year-ago period. And comparable-store sales declined 13.9% for the 13-week period.

"Our third-quarter results reflect the impact of the deteriorating macro-economic conditions that started in mid-September," the Hingham, Mass.-based company says in its release. "While we have had positive customer response to our reinvigorated Talbots brand merchandise and marketing efforts, this was not enough to offset a steep decline in consumer traffic and spending that we and most others across our entire industry have experienced."

Given the weak outlook, "we expect the environment to remain difficult and volatile for the balance of this year," it says, adding that it will not comment on the fourth-quarter outlook.

Meanwhile, Coldwater Creek--the Sands Point, Idaho casual chain that targets older women--posted a $1.3 million loss, compared with a $6.2 million loss in the same period a year ago. Those results were somewhat better than expected, and due in part to a reduction in marketing spending. Sales fell to $228.5 million, compared with $271.2 million in the third quarter of 2007, and on a comparable-store basis, sales tumbled 20.5%.

1 comment about "Women's Chains Languishing As Mom Puts Herself Last ".
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  1. Carey Jernigan from re:group, November 26, 2008 at 9:44 a.m.

    As a former fan and investor in Chico's I have observed the retailer over a decade. It seems that they have lost their focus and are no longer true to the original mission and strategy. Merchandise is not displayed well, the designs do not seem to have the style they once had. The concept needs a redo to keep growing and continuing to attract shoppers. It has lost the buzz it once had.

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