Is Talbots going out of business? Talbots is a women’s clothing retailer and is among those at risk. The company faces industry challenges as many consumers have avoided shopping malls due to the pandemic. According to analysts, Talbots has little cash on hand, and its debts are due soon.
According to a notice filed with the state, Talbots, a Hingham-based women’s clothing retailer, intends to close its Lakeville distribution center. Talbots has over 500 retail locations worldwide. The company informed the state that 277 employees would be laid off in three stages: late July and mid-November.
Let us see in detail how Talbots are doing financially and which Talbots stores are being closed in this article.
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Which Talbot stores are closing?
Talbots said it will close 66 of its kids’ stores and 12 Talbots men’s stores. This affects about 800 full- and part-time jobs or about 5% of the total Talbots working population.
Talbots has stated that it will reallocate assets to its other businesses. According to the company, total revenue would be reduced by approximately $100 million annually. The chain added that it expects to generate operational benefits of $13 million to $15 million per year, or 15 cents to 18 cents per share.
Talbots was purchased by JUSCO Co., Ltd. after General Mills sold its Specialty Retail Division in 1988. Talbots went public in 1993 and is traded on the New York Stock Exchange under the ticker symbol TLB.
Talbots was founded on an inspired commitment to provide women with prompt, timeless style, exceptional quality, and outstanding service. They are the authentic New England lifestyle brand for women who enjoy looking well-dressed, with sizes to fit every body type.
Ann Taylor, Chico’s, Gap Inc., and Ann Inc. are among Talbots’ competitors. Compared to its competitors, Talbots ranks first in customer net promoter scores.
Talbots’ annual revenue is $1.3 billion. Zippia’s data science team discovered the following primary financial metrics after extensive research: Talbots employs 8,737 people and has a revenue-per-employee ratio of $152,340. In 2021, Talbots’ maximum revenue was $1.3 billion.
Is Talbots in financial trouble?
According to the Talbots website, the Lakeville facility serves as the company’s sole distribution center. All products are delivered to the chain’s stores, and customers pass through the 1-million-square-foot facility.
Talbots’ spokesperson stated that the company intends to relocate its satisfaction and distribution operations to other facilities. But they have not provided any further information and declined to comment.
Talbots was founded in 1947. This company went private a decade ago after being purchased by Sycamore Partners, a New York-based private equity firm. These retail brands include Framingham-based Staples, Lane Bryant, Loft, and Ann Taylor.
The brand has long struggled to appeal to younger consumers. But it gained popularity among middle-aged suburban women. Talbots, which manufactures corporate workplace staples, has also faced problems as its buyers began working from home during the pandemic.
Governor Charlie Baker instructed all non-essential stores to go out of business at the pandemic’s start. At that time, Talbots had to close its retail locations and temporarily halt operations at its Lakeville facility. This is the only place in the United States that processes orders for online shoppers. The plant was able to continue producing personal protective equipment.
How is Talbots doing financially?
Talbots was lowered to deep junk territory in January 2021. This was narrated by S&P Global, which is a Rating agency. This indicates that the retailer would be unable to repay its debt.
Talbots’ revenue fell by 40% during the first three quarters of 2020. Thus, it urged the retailer to take extreme action to save money. It delayed payments, denied rent, and reduced its payroll and other expenses, according to S&P Global.
The company’s sales are declining as customers avoid shopping and attending events that require new clothes. In addition, the retailers’ core customers are 55 and older, a population more susceptible to the risk of COVID-19.
Meanwhile, as cash was running out, debt payments towered. Talbots had a $185 million asset-based loan and a $350 million term loan due to maturity in October and November. Thus, Talbot’s ability to refinance the debt appeared increasingly depressing, given its current sales performance.
As part of a private refinancing transaction, Talbots paid back its term loan a year early. S&P Global discontinued its coverage of Talbots in December due to the repayment and a lack of investor interest.
The decision to shut down the brands was made as part of the retailer’s strategic review. This was first announced in October. Talbots stated in its review that the concepts did not prove the capacity to realize an acceptable long-term return on investment.