Private Equity Firm Makes Bid For Talbots

By Salon Staff

Published December 7, 2011 12:45AM (EST)

PORTLAND, Ore (AP) — Private-equity firm Sycamore Partners has offered to buy struggling women's clothing chain Talbots Inc. for $3 per share — nearly double its closing price on Tuesday.

Sycamore is the largest stockholder of the women's clothing chain with a stake of 9.9 percent. In a regulatory filing Tuesday, the firm said that it is frustrated with the company's "rapidly deteriorating situation" during the critical holiday shopping season and decided quick action was needed.

Excluding the shares Sycamore holds, the deal would be worth roughly $205.2 million.

A Talbots representative was not immediately available to comment on the offer. The company sells its traditionally-styled clothing at 551 stores in the U.S. and Canada.

The bid comes on the heels of Talbots' announcement Monday that it is seeking a new chief executive and that its president and CEO Trudy Sullivan plans to retire as soon as a successor is named.

Talbots has struggled for some time, posting an annual loss in three of the past four years. It lost $22 million in its most recent quarter, its third loss in the past four quarters. As it announced that loss last week, Talbots laid out plans to cut jobs, close stores, trim employees' hours, suspend national advertising and TV campaigns and reduce inventory.

Sycamore said it is concerned about the company's results and multi-year stock price decline. The shares have plunged more than 80 percent this year alone.

Talbots has met with Sycamore, but the firm said Talbots managers have rebuffed attempts to discuss any "value-enhancing transaction." The firm also criticized the retailer for announcing Sullivan's retirement without identifying a replacement.

The shares closed Tuesday at $1.56, down a penny, but they rose $1.14, more than 73 percent, to $2.70 after hours on the news. Talbots is based in Hingham, Mass.

Salon Staff

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