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An Analysis and Comparison Between Talbots Inc. and Chico's Fas, Inc.

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A Brief Summary of the Businesses
The purpose of this term paper is to discuss the similarities and differences between Talbots Inc. ("Talbots") and Chico's FAS Inc. ("Chico's"). This paper will detail the nature of each company's respective business, past financial performance, and expected future outlook. The paper is divided into two sections. The first section will discuss each company's history, business structure, and future plans independently from each other. The second section will discuss several important financial ratios and provide a detailed analysis comparing the two companies. By the end of this analysis, the reader will have a better understanding of these two retailers and the industry in which they operate. Chico's …show more content…

Talbots' stores and catalogues offer the option to mix and match clothing with accessories, enabling the customer to complete their wardrobe. Talbots has two reportable segments, including the retail segment and direct marketing segment (i.e., the internet and catalogue sales). Each segment requires a different marketing and management strategy. The retail segments (based on television and printed advertisements) revenue is driven primarily by the in-store sales of women, children and men's clothing and accessories. The direct marketing segments (based on online advertising and mailings) revenue is driven primarily by its approximately 25 catalogue mailings per year and online, via the website. Talbots currently circulates 48 million catalogues per year. As of January 28, 2006, Talbots employed 11,600 people and operated a total of 1,082 stores (as compared to 1,049 stores in FY 2004).
Based on Talbots filing of the 10-K, net sales in FY 2005 were $1,808,606 compared to $1,697,843 in FY 2004, an increase of 6.5%. Operating income was $152,148 in FY 2005, compared to $142,115 in FY 2004, an increase of 7.1%. Cash flow from operations was 12% of sales, or $211,438 for FY 2005, compared to $155,223 for FY 2004. Total revenues for the year rose 7% to approximately $1.8 billion. Comparable store sales also grew at a modest 2.6%. Comparable store sales were positive in each of the first seven months of FY 2005, driven by a healthy sales performance across the U.S..

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