A New Case to Oust Talbots' CEO

Trudy F. Sullivan is still the CEO of The Talbots (NYSE: TLB). The retailer continues to be one of the least successful in its sector. Sullivan has overstayed whatever welcome she ever had. It is time for the board to fire her.

Sullivan has run Talbots since August 2007. The company’s shares have fallen from $25 to under $2 in the past five years. Talbots has shown obvious signs over that period that Sullivan’s vision for the retailer’s store configurations and products has not worked.

Talbots just posted a third-quarter loss from continuing operations of $22.1 million, or $0.32 per share, compared to last year’s income from continuing operations of $17.0 million, or $0.24 per share. The company said comparable-store sales were down another 4% in November. It is the most recent in a series of months in which same-store sales have fallen, and that series goes back nearly three years. Talbots says it is in the process of “refurbishing” stores. The results so far are dismal. Talbots also has tried to improve results through shuttering its weakest stores. Thirty-five have been closed this year.

Even beyond losses and store closures, the most damning factor about Talbots’ financial results is that sales continue to fall. They dropped from $300 million in the third quarter of last year to $279 million. Talbots revenue is down enough so that it cannot cut its way to profitability.

Sullivan has been in her jobs for four years — and four holiday seasons. There is powerful proof that she has done nothing to improve the company’s prospects. As a matter of fact, they are getting worse.

Douglas A. McIntyre