Talbots 3Q loss widens on closings, less traffic

Talbots Inc., the Hingham-based retailer known for its women's clothing, said today that its third-quarter loss widened on the closing of some units, along with softer traffic and consumer spending.

For the period ended Nov. 1, Talbots reported a loss of $167.2 million, or $3.13 per share, compared with a loss of $9.4 million, or 18 cents per share, a year earlier.

Excluding $152.4 million, or $2.85 per share, related to the closing of Talbots Kids, Men's, and UK businesses, and the decision to sell J. Jill, the company posted a loss of $14.8 million, or 28 cents per share, compared with a loss of $893,000, or 2 cents per share.

Analysts predicted a loss of 22 cents per share, on average, according to a Thomson Reuters survey. Analysts' estimates typically exclude one-time items.

(The photo at right was taken from Talbots' website.)

Quarterly sales dropped to $357.3 million, down 14 percent from $414 million in the previous year. Wall Street forecast sales of $357 million.

Same-store sales sagged 13.9 percent. Same-store sales, or sales at stores open at least a year, is a key indicator of retailer performance since it measures growth at existing stores rather than newly opened ones.

Talbots said it would not provide a fourth-quarter or full-year forecast until more time has passed due to the likelihood of ongoing struggles in the retail market.

Retailers have been squeezed as consumers pull back on spending due to the continued housing slump, rising food prices, diminishing credit and increased unemployment.

The women's specialty retailer also announced that it has locked up deals with lenders to convert $125 million in uncommitted working capital to committed working capital. Talbots said it is in talks with other lenders on similar transactions.

In premarket trading, Talbot shares added 8 cents to $2.20. Talbot shares trade on the New York Stock Exchange.

Talbots also said today that it has locked up deals with two lenders to convert uncommitted working capital to committed working capital lines.

The women's specialty retailer said Mizuho Corporate Bank Ltd. and Sumitomo Mitsui Banking Corp. have agreed to convert a total of $125 million in uncommitted working capital.

"This is a great step forward for Talbots as it serves to stabilize our liquidity during these most difficult and uncertain times, enabling us to focus on implementing the key strategic initiatives that will drive improved performance of our business," chief executive Trudy Sullivan said in a statement.

The company also said it is in talks with other lenders on similar transactions. (AP)