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A makeover for Talbots

Stodgy fashions. Mixed messages. A corny red door. Industry specialists give their advice for restyling the Hingham retailer.

Bill Brett for the Boston Globe

Talbots was founded in 1947 in Hingham and became known for signature items such as classic blazers and pearls.

After spending the better part of a decade trying to engineer a turnaround, Talbots has yet to find the mix of fashion, marketing, and identity that drove its earlier success.

Known for classic tailored suits, houndstooth prints, and red doors, Talbots’ attempts to lure younger consumers with fresh looks have largely backfired, alienating its core customers of older, professional women while failing to gain new shoppers. As a result, the Hingham-based retailer has posted losses in three of the past four quarters; shed more than two-thirds of its stock value in the last year; launched a $50 million cost-cutting initiative that includes layoffs and store closings; and moved to jettison another chief executive.

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Talbots, in short, is a company in need of a makeover, analysts say. And with a New York buyout firm launching a takeover bid last week, it may get one soon.

The Globe recently asked fashion designers and retail analysts to offer advice on reviving the Talbots’ brand, once synonymous with career women with conservative tastes, but today viewed as a brand that has lost its identity. These specialists, including fashion design professors, store owners, and Wall Street analysts, offered a wide array of suggestions, such as expanding into activewear and other clothing to become a lifestyle brand; creating a wholesale business; and closing all stores to focus on online and catalog sales.

They agreed that it’s not too late for Talbots, with 551 stores and more than $1 billion in sales, to avoid the fate of another storied local brand, Filene’s Basement. But time is running short. Filene’s Basement, cast off as irrelevant years ago because of its small size, poor strategy, and more agile rivals, is being liquidated and will shutter its shops for good over the next several weeks.

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“To the casual observer, Talbots seems well-positioned for success,’’ said Jay Calderin, founder and executive director of Boston Fashion Week. “They make a quality, well-priced product. Their collections incorporate enough current trends. Multiple distribution points are positioned carefully throughout the country.’’

But, Calderin added: “The trouble is that all of this is simply not enough anymore.’’

Talbots declined to comment.

Talbots was founded in 1947 by Nancy and Rudolph Talbot, who opened their first store in a charming white clapboard house in Hingham. The retailer, which catered to older women, became known for signature items such as classic blazers, white shirts, ballet flats, and, of course, pearls.

But through the decades, the Talbots look became stodgy and uninspired, according to analysts. The business extended into children’s and men’s clothing as a way to boost sales but these divisions did not live up to expectations. Talbots, again looking for growth, acquired the Quincy retailer J. Jill in 2006, but that turned out to be another misstep and the marriage fell apart within three years.

In 2007, Talbots turned to Trudy F. Sullivan, a retail veteran and Wellesley native, who left Liz Claiborne to take the job.

But sales continued their decline, plunging more than 40 percent between 2007 and 2010. Talbots recently disclosed plans to hunt for a new chief executive; Sullivan is expected to be gone by June.

During her tenure, Sullivan shuttered the men’s and children’s divisions, sold off J. Jill, and shook up the merchandise to feature trendier looks to appeal to younger shoppers. But the strategy failed: the new products alienated core customers and Talbots could not shed its old-fashioned reputation to lure younger consumers.

“Talbots needs a chief executive with deep current understanding of the needs of younger, more affluent working women,’’ said Michael J. Silverstein, senior partner and managing director of the Boston Consulting Group.

Talbots, however, needs more than just a new chief executive, according to some observers. It could also use an entirely new game plan.

Retail analysts and fashion designers say Talbots should look at other brands, such as Burberry, which took advantage of its legacy while repositioning itself to reflect the tastes and styles of modern consumers. For example, Burberry, founded in 1856, incorporated the lining in its classic trench coat into new styles for shirts, accessories, and even bathing suits.

The British luxury retailer reported that revenues rose 30 percent in the six months ended in September, compared with the same period a year earlier.

That Talbots still has value as a company and brand was perhaps illustrated by the unsolicited takeover bid by Sycamore Partners, a private equity firm in New York.

Sycamore, launched by retail veterans several months ago, took a nearly 10 percent stake in Talbots in August, and on Tuesday offered $3 a share for the brand.

The bid seems paltry, but it represents a 92 percent premium to the $1.56 closing stock price on the day the offer was made. Talbots’ stock traded above $50 a share in 2001. It closed at $2.83 Friday.

Retail and fashion specialists said the Tallbots brand and its reputation for timeless, quality apparel, still has staying power.

If the Sycamore offer is accepted, the buyout firm would spend about $200 million for a company with five times that amount in annual revenues.

“This is a severely depressed valuation,’’ said Jennifer Black, president of Jennifer Black & Associates, a retail consultancy in Oregon, “but a savvy move by Sycamore Partners nonetheless.’’

Jenn Abelson can be reached at abelson@globe.com. Follow her on Twitter @jennabelson.
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