Is Talbots (TLB) Going Bankrupt?

Jun 8, 2011
J. Webster
Comments Off on Is Talbots (TLB) Going Bankrupt?

Update: Talbots is up 15% has CNBC says Golden Gate Capital and TPG are among the firms weighing bids for the troubled retailer.

Talbots’ stock is getting slammed, crushed, smashed, whichever adjective you prefer – it hasn’t been a good year for this clothing store. This is the store that says clothes for older women, sort of classy but casual, think Hilary Clinton’s pant suit. The stock is down 45% just this week and then 80% for the year. Either they’re destined for bankruptcy or their going to mount an amazing comeback. They are closing stores they aren’t profitable and not losing nearly as much money as a year ago, but it might be too late for TLB. The consumer is struggling and costs are rising for the company.

This from InvestorGuide.com:

Talbots traditionally specializes in apparel for middle-aged to senior women, but has recently attempted to expand its product line to appeal to young adults. This ill-advised venture, which should have been released under a different label, has apparently failed as the company reported a 6% decrease in sales to $301.3 million with same-store sales including e-commerce and direct marketing sales dropping 7.7%. However, Talbots eked out a meager profit of one cent per share, or $739,000, an improvement over the loss of $4.4 million, or 8 cents per share, that it posted a year earlier.

One Yahoo Finance message boarder said this was the stocks’ low for the year:

Re: 2.43 was the year’s low folks.
They are pedaling as hard and as fast as you can imagine…turnarounds take time…but they are doing what they need to do.

My relative there actually called me from overseas to tell me to just hang in there knowing that I’ve bought a boatload in the past 2 days…this was a gross overreaction to Trudy’s not so careful expressions about next quarter…a LOT is happening there and they are shedding losers, upgrading stores AND merchandise and basically doing what any sound management team would be doing with their business. SO HANG IN THERE…I do believe $2.43 was THE BOTTOM!!!

What do you think? Is this a company that can comeback from the brink and it’s time to stick your head out? What do they sell that other stores don’t? Can’t you just buy these types of clothes at Macy’s or Nordstrom?

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