Ailing Talbots Inc. yesterday confirmed it is hunting for a new chief executive to replace Trudy F. Sullivan, who has failed to revive the troubled Hingham brand after arriving with high hopes from Liz Claiborne more than four years ago.
Sullivan, a Wellesley native, plans to retire when a successor is identified, but no later than this June. She signed a separation agreement on Sunday that calls for a cash
severance of $5 million, accelerated vesting of stock options, 24 months of continued vesting of restricted stock, additional bonus money, and continued medical, dental, disability, and life insurance.
Sullivan’s “successor will inherit from her an extraordinary brand and a strong operating foundation from which Talbots will complete its transformation and sustainably create superior shareholder value,’’ Gary M. Pfieffer, chairman of the Talbots board of directors, said in a statement.
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The news came just days after the chain reported another disappointing quarter of losses and unveiled a $50 million cost-cutting initiative that involves shedding about 100 jobs at the corporate headquarters, shutting more shops, and suspending its advertising campaign.
Retail analysts said it is no surprise that Talbots has decided to look for a new chief executive, and some industry insiders have suggested that the classic clothier may have waited too long, given years of poor performance.
Talbots is likely to scout outsiders at rival brands such as Ralph Lauren, Eileen Fisher, and Ann Taylor, according to retail analysts, and the company will probably consider seasoned insiders like Lori Wagner, Talbots’ chief marketing officer who previously worked at Cole Haan, Kenneth Cole, and J.Crew.
A Talbots spokeswoman declined to comment beyond yesterday’s press release.
Either way, industry observers believe that Talbots requires new leadership to help fix missteps in recent years, such as introducing different looks that alienated core shoppers and failed to attract younger consumers.
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Jill Avery, a marketing professor at Simmons School of Management who specializes in brand management, said Talbots needs a chief executive who knows how to connect with customers and can keep up with changing fashion and needs of consumers.
“Talbots has lost touch with the customer,’’ Avery said. “The new leader needs to be someone who is customer-centric and focused on understanding consumers, their behaviors, and then align that with Talbots’ product line, store design, and marketing messages.’’
Marshal Cohen, chief retail analyst with NPD Group, a market research firm in New York, said the next leader should have strong merchant talent, deep consumer awareness, and a good grasp on how to communicate change inside and outside the organization. Talbots has a strong brand heritage, he said, and has not outlived its relevancy.
“Talbots was not nimble enough or quick enough to change. The woman who is 40 years old doesn’t dress like she is 40, she dresses like she is 25,’’ Cohen said. “Talbots needs to become a brand, not just a retailer.’’
Sullivan, who began her retail career at Jordan Marsh in Boston, joined Talbots with the mission to help turn around the beleaguered brand. At the time of Sullivan’s appointment in 2007, some analysts questioned whether she had what it takes, given that she oversaw Liz Claiborne as the brand continued its long decline.
Since her arrival, Sullivan has closed hundreds of stores, including the men’s and children’s divisions, and sold off J. Jill three years after Talbots acquired the Quincy merchant. Efforts to shake up the merchandise have faltered and Talbots posted an annual loss in three of the past four years.
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Shares of Talbots have tumbled significantly during the past year, but inched up 2 percent to close at $1.57 yesterday.
Jenn Abelson can be reached at abelson@globe.com. Follow her on Twitter @jennabelson.