Talbots Gets New $50 Million Credit Facility
Hingham, Mass. The Talbots Inc. said Wednesday that its majority shareholder, Aeon Co., has agreed to provide the retailer with a $50 million unsecured subordinated term loan to support its turnaround plan.
The facility, which matures Jan. 28, 2012, will increase the company's total working-capital borrowing capacity to $215 million.
"While we believe we had in place sufficient liquidity to fund the turnaround of our business, this new credit facility will provide us with an additional level of assurance and even greater flexibility to weather the current uncertainty in the credit markets," said president and CEO Trudy F. Sullivan.
Last week, Talbots said it will cut 129 jobs in its corporate offices, affecting about 9% of its employees there. The company also eliminated its post of COO, currently held by Philip Kowalczyk.
Talbots has a goal of reducing costs by a total of $100 million by the end of the next fiscal year.
Sullivan noted that the company is experiencing improving sales trends at both of the company's brands, and remains on track to meet its 2008 earnings-per-share guidance.