* Says got $200 mln loan from shareholder to repay debt
* Aims to cut 370 jobs, close 20 stores, shave staff hours
* Sees cost-cuts saving it $150 mln
* Says Q4 sales fell 23 pct; sees Q4 net loss below view
* Shares jump as much as 16 percent
(Adds byline, outlook, background)
By Martinne Geller
NEW YORK, Feb 5 Talbots Inc TLB.N said it got
a $200 million loan and announced a cost-savings program on
Thursday that includes closing stores and cutting jobs, sending
shares up as much as 16 percent.
The apparel retailer, which caters to women over 35, also
said its fourth-quarter net loss will be "significantly below"
Wall Street expectations, which, according to Reuters
Estimates, were for a loss of 32 cents, excluding items.
Even after bold moves including closing some businesses,
shaking up its management team and revamping its classic
styles, the company said quarterly sales fell 23 percent,
leading gross margins to contract. It sees the weakness
"We are planning very conservatively for fiscal 2009 and at
this time expect little to no improvement in the economic
climate for the first half of the year," said Chief Executive
Trudy Sullivan in a statement.
Talbots said sales for its fourth quarter, which ended on
Jan. 31, slid to $328 million from $428 million a year ago, as
sales at stores open at least a year fell 24.6 percent.
The company said it plans to save $150 million by cutting
370 corporate jobs, or 17 percent of its corporate headcount,
reducing the hours of workers in its stores and call centers
and suspending its matching contributions to employees' 401(k)
Talbots said it expects to incur a $6.2 million charge in
the fourth quarter related to the job cuts.
ANOTHER BOOST FROM JAPAN
Talbots said it will use its new unsecured loan from Aeon
Co Ltd (8267.T), Japan's second-largest retailer and its
majority shareholder, to pay off debt related to its 2006
acquisition of the J. Jill chain.
The loan, which adds to Talbots' existing working capital
borrowing capacity of $215 million, will contain no financial
covenants and will have no scheduled amortization. It is
expected to close during the current first quarter.
Talbots also said its other outstanding loans will now be
guaranteed by Aeon, which last month warned it may post its
first annual net loss in 7 years, hit by flagging sales,
accounting changes and a write-down at Talbots.
Talbots, which has been trying to improve sales at its
namesake stores, put the J. Jill chain up for sale in November.
It said on Thursday that the process was "moving forward".
Last April the ailing company said two banks had decided to
stop providing it with letters of credit used to back financing
for merchandise bought overseas. In June, Talbots said Aeon had
agreed to provide it with a $50 million credit facility to aid
its turnaround plan.
Shares were up 19 cents, or 9 percent, at $2.30 on the New
York Stock Exchange after rising as high as $2.45 earlier in
(Reporting by Martinne Geller, editing by Maureen Bavdek, Dave
Zimmerman and Gunna Dickson)