Talbots decreases catalog circ., increases e-mail marketing

The Talbots Inc. will decrease catalog circulation and increase e-mail marketing in 2009, according to the annual report recently filed with SEC by the company.

In 2008, direct marketing represented 16% of total sales while the Internet comprised 68% of total direct marketing sales.

To support the strong performance from its Internet efforts, the company is allocating a portion of its capital budget in 2009 to refresh its e-commerce platform.

The company’s catalog marketing efforts in 2008 were mixed. A 15% increase in catalog circulation for the fall produced a solid increase in response rates, according to the company. However, an inventory miscalculation related to a December sale catalog resulted in Talbots being unable to fulfill approximately 39% of customer demand for the book and contributed to a $17.2 million decline in net sales for the fourth quarter.

In order to manage costs in 2009, Talbots will decrease catalog circulation to approximately 34 million from 55 million in 2008.

Talbots released a strategic plan for long-term growth and significant productivity improvement last spring.

The company eliminated TV and national print advertising in 2008 – a strategy which continues this year – and is redirecting a portion of that budget to enhancing customer outreach efforts through reactivation, prospecting and Web-based marketing. This includes a planned increase in e-mail marketing and a plan to pursue innovative new strategies to increase contact with potential customers.

Earlier this week, Talbots reported a net loss totaling $366.5 million, or $6.85 per share, for the fourth quarter ended January 31. This compares to a net loss totaling $171.4 million, or $3.22 per share, in the previous fourth quarter period.

For the fiscal year, the net loss totaled $560.6 million, or $10.49 per share. This compares with the previous year’s net loss of $188.8 million, or $3.56 per share.

Fourth-quarter direct marketing sales totaled $49.2 million, compared to $66.5 million last year.

For the fiscal year, net sales totaled $1.495 billion compared to $1.708 billion in the previous year. Comparable store sales declined 14.2% during the same period. Direct marketing sales totaled $233.7 million compared with $262.7 million in the previous year.

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