* AnnTaylor Q3 same-store sales down 19 pct, cuts forecast
* Talbots Q3 same-store sales down 13.9 pct
* Talbots pulls forecast, will try to sell J. Jill
* AnnTaylor shares down 26 pct, Talbots falls 11 pct
By Brad Dorfman
CHICAGO, Nov 6 AnnTaylor Stores Corp ANN.N
and Talbots Inc TLB.N, retail chains that cater to women
professionals, plan to further restructure their operations after
posting sharp declines in quarterly sales on Thursday.
AnnTaylor said it would expand a restructuring program to
cut even more jobs and plans to significantly cut back capital
spending in 2009 because it expects consumers to keep a tight
hold on spending into next year. The company posted a quarterly
drop for sales at stores open at least a year of 19 percent and
slashed its third-quarter earnings forecast.[ID:nN06301403]
Talbots pulled its financial forecast altogether after
reporting a 13.9 percent drop in quarterly same-store sales.
[ID:nN06438772]. It now plans to sell the J. Jill brand it
bought a little more than two years ago, and instead focus on
its namesake brand.
"Talbots has decided to sell the J. Jill brand, but we fear
there will be no buyers," Credit Suisse analyst Paul Lejuez said
in a research note. "In addition, the core Talbots business
continues to struggle, making a turnaround look unlikely."
Womens' apparel retailers have struggled for more than a
year due to a U.S. economic slowdown, often performing worse
than the wider retail sector. Those trends have intensified
since September, when a financial crisis erupted and threatened to
plunge the global economy into deep recession.
Many of their shoppers have cut spending on themselves
before sacrificing purchases for their families, while a lack
of compelling fashion in some stores kept others away.
AnnTaylor shares fell 25 percent to $9.02, while Talbots lost
10 percent to $6.79.
AnnTaylor said it now expects break-even earnings in the
quarter, excluding one-time items, down from its August
forecast of 50 cents to 55 cents a share. Analysts on average
forecast earnings of 46 cents a share, according to Reuters
"Although we had suspected that comps were weak (as they
have been across the women's sector), the third-quarter
earnings revision was somewhat shocking," Lejuez said, adding
that the fourth quarter will also be "very challenging."
The company, which is already in the midst of a
reorganization with plans to close 117 stores and cut up to 13
percent of headquarters staff, said it would eliminate
additional jobs and make other cost cuts.
Talbots, which is majority owned by Japan's Aeon Co (8267.T),
pulled its previous forecast for the second half of its fiscal
year, saying it was no longer applicable, given the current
economic environment and the plan to sell J. Jill.
(Editing by Phil Berlowitz)