Once considered a preppy, New England retailer, Talbots has evolved into the source for simple, elegant wardrobe staples.
As other retailers embraced fleeting fads and desperate discounts to combat flat apparel sales last year, customers were returning to the reliable red door in droves, boosting comparable store sales by 9.5%.
The Hingham, Mass.-based retailer is employing savvy database marketing to elicit similar customer response as it forges ahead with specialty stores selling kids wear, intimate apparel, accessories and shoes.
Talbots has been building its reputation slowly, while using very little traditional advertising along the way.
The 400-unit retailer channels its brand image to customers largely through an extensive catalog operation that generates 20% of sales.
"We have not used TV at all," said Mary Pasciucco, senior VP-catalog development and advertising. "We've looked into it, along with other media, but we don't feel it's appropriate."
The retailer does run print ads, created in-house, twice a year in fashion magazines.
Stores and catalogs are inextricably linked. Customers are encouraged to use in-store red phones to order catalog merchandise not available in stores. And many women come to the stores wanting a look they've ripped from the catalog, Talbots says.
The retailer's 25 catalogs serve not only as the premiere marketing tool but as the compass for store expansion.
Talbots this year employs its database of 7 million catalog and store customers to pick locations for 65 new stores, including five accessories and shoes units.
"The database tells us where our catalog customers live so we can put stores in a good site and have immediate constituents," said Ron Ramsayer, senior VP-direct marketing. Once catalog sales within a ZIP code reach $150,000, Talbots can move in with a store, counting on sales of at least $1 million.
"Because their database is so developed, they know a lot more about their customer than stores with a more transient base," said Fred Marx, president of consultancy Marx Layne & Co., Farmington Hills, Mich. "They pay a lot more attention to buying patterns."
Customers have come to depend on the retailer for a head-to-toe Talbots look, Mr. Ramsayer said.
New specialty stores were designed to fortify that look, rather than cannibalizing sales from the regular "misses" stores.
The Talbots Superstore in St. Louis is one way to promote the total Talbots look. The petites and intimates formats are packaged alongside a regular Talbots, making up the chain's best-performing unit, according to company reports.
The specialty store strategy appears to be working. Comparable store sales rose across all store formats last year, up 9.1% in misses stores, 15.5% in petites and 11% in kids.
Sales haven't always been so healthy. In the late '80s Talbots strayed from its commitment to timeless clothing, offering colors and styles too trendy for its older clientele.
The misstep led to losses of $7 million in 1990.
With the help of merchandising veteran Clark Hinkley, hired from Dayton Hudson Corp. as chief operating officer in 1987, Talbots has refocused on its key customers-women ages 25 to 65.
The retailer is careful not to radically alter its merchandise from year to year, allowing customers to mix new pieces with clothing already hanging in their closets.
Converting to almost 100% private-label merchandise, from 25% in 1987, has helped Talbots offer this seamless look while boosting the retailer's margins, analysts say.
An aversion to discounting hasn't hurt Talbots' margins, either. Unlike most retailers, where red-lining is an everyday practice, Talbots holds only four sales each year.
In recent years, the classically American retailer has begun to look abroad for growth, beginning in familiar territory like Canada and the U.K.
The marketer has opened 12 stores in Canada but faces a tougher audience in England, said Neil Kennedy, vice chairman of Bates Europe, who spoke of Talbots' European expansion at the Retail Advertising Conference earlier this year.
Working with Bates, Talbots last fall plotted its grand opening in a market already weary of the U.S. retail invasion, Mr. Kennedy said.
The English somewhat resented the onslaught of chains like The Gap and Safeway, and they looked down upon catalog shopping, he added.
But one of Talbots' traits seems to hold promise: English retailer Marks & Spencer offers the classic example of a chain commanding tremendous customer loyalty while using absolutely no advertising, Mr. Kennedy said.
Talbots says sales at its London-area Kingston store have exceeded expectations but considers the unit still in test; the retailer is reticent about future European expansion.
For now, the U.S. market holds plenty of opportunity for the retailer.
"The '80s were so label-conscious-first everything had to be Ralph Lauren, then Donna Karan," Mr. Marx said. "Talbots is really coming into its own now, with customers so much more relaxed about their apparel."
Headquarters: Hingham, Mass.
1994 sales: $706.4 million
Leadership: Arnold B. Zetcher, president-CEO; Mary R. Pasciucco, senior VP-catalog development and advertising; Ronald L. Ramseyer, senior VP-direct marketing.
Marketing budget: Undisclosed. Almost exclusively devoted to catalogs.
Recent successes: Classic clothing styles helped Talbots outpace the apparel industry last year with comparable store sales gains of 9.5%; Talbots Petites and Talbots Kids stores and catalogs continue to expand customer base; all stores now carry almost 100% Talbots private label merchandise, boosting profits and enhancing brand image.
Challenges for 1995 and beyond: Oversee launch of two new store concepts-Talbots Intimates and Talbots Accessories & Shoes-and a line of clothing for infants and toddlers. Establish critical mass in new markets like Canada and England.
Source: Advertising Age and company reports