Talbots shares fall as analysts stay neutral on stock

Shares of Talbots Inc., the Hingham retailer of women's clothing, fell today, as two analysts reiterated "Neutral" ratings on the women's apparel retailer following credit concerns.

Last week, HSBC and Bank of America said they will either cancel or not renew lines of credit to the retailer. But Talbots said it has cash to fund business initiatives through the end of the year and reiterated fiscal 2008 guidance.

Today Wedbush Morgan Securities analyst Betty Chen said she remains concerned about Talbot's financing capabilities compared with its peers, a "potentially optimistic" three-year turnaround plan and revised merchandising and marketing initiatives that may distance the stores from their core shoppers. She also expressed concern about Talbot's ability to increase earnings in a weak retail environment.

Meanwhile, Lazard Capital Markets analyst Todd Slater said in a client note on Monday that a new merchandising, design and marketing team at Talbots is starting an "achievable" recovery plan.

"While the company is taking proactive and appropriate measures to reconnect with a wider customer base and rebuild its operating margin, the baby-boomer specialty space is oversupplied and this aging demographic is likely to remain financially challenged for the foreseeable future," he wrote.

He said he "remains on the sidelines," until at least the fall, when the company might deliver "hoped-for compelling and iconic product" and kept his "Hold" rating on the stock.

Shares fell 51 cents, or 6 percent, to $8.06 during midday trading on the New York Stock Exchange. The stock has traded between $6.48 and $26.10 during the past 52 weeks. (AP)