Updated from 12:48 p.m. ESTThe threads keep unraveling at Talbots ( TLB) . Shares of the women's apparel retailer were sliding Friday after the company said its quarter-to-date sales are trending below its expectations -- the latest in a long line of shortfalls. Amid this weakness, Talbots said it will shutter its kids and men's apparel lines to sharpen its focus on its core age 35-plus female market. The step is one of the first major moves made by CEO Trudy Sullivan, who took the helm in August and launched a strategic business review in October. The company plans to close 66 Talbots Kids stores and 12 Talbots Mens stores, resulting in a cut of about 5% of Talbots' total workforce. The move will cut annual revenue by about $100 million, but is expected to yield yearly savings equal to 15 cents to 18 cents a share, Talbots said. The company will record charges, however, of 40 cents to 49 cents a share in fiscal 2008 because of the closures. "This is a very important strategic move that will greatly contribute to our ability to focus and reinvigorate our core brands and provide sustainable long-term shareholder value," said Sullivan in a statement. "By exiting these concepts, we can focus exclusively on our company's core strength -- the age 35 plus female market, where we believe there is significant opportunity for profitable growth in both our Talbots and J. Jill brands."
Richard Jaffe, an analyst for Stifel Nicolaus, commended the move, noting that the men's and kids divisions have significantly underperformed in recent years. "We believe TLB's initiatives are well focused and offer significant opportunity," Jaffe wrote. "However, TLB's real challenge remains -- creating a more broadly appealing assortment and communicating improvement to target customers." Jaffe added that while he recognizes that Talbots still has a lot of opportunity to regain share, leverage costs and improve margins and earnings, "we do not believe that changes are imminent as it will likely take time for changes put in place by Ms. Sullivan and her team and even longer until they have a material impact on results." So far, both the Talbots and J. Jill brands continue to struggle. The company said Friday that each have had below-forecast sales for the key holiday quarter. The chains have been fumbling for the past year with merchandise missteps and trouble bringing in customers. To be sure, many retailers struggled through the holiday period, and women-focused chains like Chico's ( CHS) and Coldwater Creek ( CWTR) have also had ongoing weakness. "We believe that the entire missy sector has had a very challenging holiday season as the missy shopper remains reluctant to spend," wrote Adrienne Tennant, an analyst for Friedman Billings Ramsey, in her research. "Promotions were deep and broad across the entire missy sector, and we believe TLB was forced to promote to keep pace with other missy retailers' promotional levels." Tennant added that although Talbots has said it plans to be much more proactive with its promotions in the future, she still noticed inconsistencies with traffic as well as conversions into sales. Talbots still has to record results for January, which can be a key month as retailers benefit from gift card redemptions. Investors, however, were bracing for the worst. Shares of Talbots recently were down $1.51, or 14%, to $9.17. Even before Friday's decline, the stock had tumbled 60% since the beginning of 2007.