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While Talbots has seen sales and earnings slump in the last few years, which it blames partly on the struggling economy, it managed to eke out a sales gain in fiscal year 2003 of 2 percent, to $1.6 billion, though net income dropped 13 percent to $14.7 million. Sales, however, have jumped 600 percent from $1 billion in 1996 to 2003’s $1.6 billion, according to annual reports. In one of Talbots best years, the company showed why it has had staying power: In fiscal year 2000, sales jumped 21.9 percent to $1.6 billion over 1999, while net earnings skyrocketed 97 percent to $115.2 million. The company had double-digit comps each month of 2000 except for two clearance months.
For Chico’s, defining its core customer has been an evolution. The company, which was formed 21 years ago, first started selling Mexican folk art and cotton sweaters. It has evolved to the 418-store specialty retail powerhouse it is today, having posted seven consecutive years of double-digit same-store sales gains at year-end 2003.
Silva, who currently prefers Chico’s over Talbots, cited Chico’s friendly associates who understand what she wants or needs and who treat her the same whether she’s in Boston or Chicago. Chico’s executives were unavailable for comment.
Sensing that its core consumer would like more, Chico’s is carving out even a larger niche. The company is in the process of rolling out 10 Soma by Chico’s intimate apparel test stores for the same age group. The move demonstrates another essential part of really knowing the core shoppers — anticipating what they’ll want to buy in the future.
“Thinking three to five years out is vital,” said David Wolfe, creative director at the Doneger Group, a New York-based retail consultancy. “But it’s counterintuitive to the retail tradition. Usually, they’re looking at yesterday and seeing what sold…building their future on the past, instead of projecting.”