With retail sales coming in higher than expected for March, will Talbots (TLB) benefit from the upswing when it reports its numbers for the first quarter later today? March retail sales not only came in higher, numbers for February also were revised upward. These numbers suggest the consumer is spending more than economists thought.
Talbots continues to struggle though, and the retailer in February said it was cutting 370 corporate jobs, or 17 percent of that workforce. It also said it would continue to cut hourly store jobs and take other steps as part of its $150 million planned cost cuts. We'll see if this cutting binge helped improve its numbers later today.
In addition to cost cutting, Talbot's created a new position of executive vice president for finance. Benedetta Casamento was offered the position. She came to Talbot after nine years at Liz Claiborne (LIZ), where she recently served as president of the Liz Claiborne, Claiborne and Monet brands. She follows Trudy Sullivan, who took over as Talbots chief executive in mid 2007. Sullivan also moved to Talbots from Claiborne.
The market appears to expect good news. The stock price has climbed from $3.26 on April 7 to $4.30 today. We'll know the verdict after market close today.
Update: Along with its quarter and fiscal year end results ended January 31, 2009, Talbots announced that Aeon Co., Ltd.,has provided Talbots a new $150 million secured revolving loan facility. This new loan supplements the Company's existing $215 million committed working capital facilities. The Company also announced that it is in discussions and has signed a non-binding letter of intent with Li & Fung Limited, the global sourcing and trading firm based in Hong Kong, to mutually explore a potential relationship for Li & Fung Limited to become Talbots primary global sourcing agent.
Fourth quarter net loss from continuing operations was $136.3 million or $2.55 per share, including special items, compared to last year's net loss of $10.3 million or $0.19 per share. Special items include:
* A total restructuring charge of $7.6 million, or $0.14 per share, the vast majority of which is severance related to the Company's recent downsizing;
* A non-cash charge of $0.3 million, or $0.01 per share, related to asset impairments.
Excluding these special items, the Company's fourth quarter adjusted net loss from continuing operations was $128.4 million or $2.40 per share compared to last year's adjusted net loss of $7.1 million or $0.13 per share on a comparable basis.