Retailer is reining in expenses, looking for a buyer for J. Jill
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The Talbots Inc. (Hingham, Mass.) will cut 370 positions, about 17 percent of its corporate workforce. The vast majority of the cuts will be at the specialty retailer’s headquarters office.
The reduction is expected to save about $22 million in fiscal year 2009. The cuts are part of a $150 million initiative to rein in expenses, including reducing staff at its stores and call center, suspending matching contributions to retirement plans, eliminating merit raises, and closing 20 underperforming stores. The retailer reported a 24.6 percent drop in sales in its fourth quarter of 2008.
"We are planning very conservatively for fiscal 2009 and at this time expect little to no improvement in the economic climate for the first half of the year," said ceo Trudy Sullivan.
Over the past year, Talbots has closed its men's and kid's divisions and closed stores in the U.K., and it currently is trying to unload J. Jill, only two years after it bought the casual clothing retailer. According to the Boston Globe, the company is saddled with about $426.5 million in debt, more than half from its takeover of J. Jill. It has secured a $200 million loan facility commitment to help pay off its existing acquisition debt.
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