Talbots to cut jobs, COO leaving company
CHICAGO (Reuters) - Women's apparel retailer Talbots Inc TLB.N said on Thursday it would cut 9 percent of its workforce, including the job of chief operating officer, as it streamlines its operations amid falling sales.
Talbots' shares rose more than 4 percent.
The company said Chief Operating Officer Philip Kowalczyk will leave Talbots in early July as part of the job cuts, which Talbots said would save it about $14 million annually.
The company said in February that its goal is to cut total costs by at least $100 million by the end of fiscal year 2009.
Severance and other costs associated with the job cuts are expected to be about $5.9 million, Talbots said. About $2.1 million of that sum was included in a first-quarter charge recorded by the company and the rest will be recorded in the second quarter, Talbots said.
Talbots, which is majority-owned by Japan's Aeon Co Ltd (8267.T), has seen sales fall due to a combination of fashion and merchandising mistakes and a weak economy that has been particularly hard on women's apparel retailers.
In April, two major banks said they would no longer make letters of credit available to Talbots, though the company said arrangements with its major vendors and available working capital lines should provide enough funds for the current year's working capital needs.
Talbots shares were up 35 cents to $8.16 on Thursday on the New York Stock Exchange.