Talbots Cuts Corporate Staff in New Cost-Reduction Program
Hingham, Mass. The Talbots announced Thursday that it has implemented a new $150 million expense-reduction program to better position the company for the future. The program includes the reduction of approximately 370 corporate-level positions across all locations, representing approximately 17% of the chain’s corporate headcount. The move is expected to result in savings of approximately $22 million in fiscal 2009.
Talbots president and CEO Trudy F. Sullivan said: “We remain confident in our strategic plan and in the long-term value of our franchise. In that regard, today we are announcing two key initiatives that will help facilitate the successful implementation of our strategy and better position Talbots to emerge a stronger company when the economy improves and consumer spending returns. Specifically, we are refinancing for longer term liquidity and restructuring for near-term productivity.”
The company has also reduced its planned capital expenditures, net of construction allowances, for fiscal 2009 to approximately $23 million. Its 2009 planned capital expenditures will support the rollout of its new upscale outlet stores, the platform refresh of its e-commerce site and renovation and refurbishment of some of its existing store base.
Talbots said it has identified approximately 20 underperforming Talbots stores that it plans to close in fiscal 2009. Many of the locations have leases that will expire or otherwise terminate in fiscal 2009.
In related news, Talbots announced that Aeon Co., Ltd., which through its wholly owned subsidiary is the company’s majority shareholder, has committed to provide Talbots a $200 million unsecured term loan facility, maturing at Talbots option for a period of up to three years from closing, to pay in full the company’s existing acquisition debt.
The chain said that the new $200 million term loan facility agreement, when closed, will be used to repay all of the outstanding indebtedness under the agreement related to its acquisition of J.Jill in 2006. The new loan facility is in addition to Talbots’ existing working-capital borrowing capacity of $215 million, of which $200 million has been committed.
Talbots also announced that in light of the deteriorating economic environment, it has implemented a new $150 million expense-reduction program to better position the company for the future. These include a reduction of approximately 370 corporate level positions across all locations, representing approximately 17% of the company’s corporate headcount, expected to result in savings of approximately $22 million in fiscal 2009.