Your browser is no longer supported. For the best experience of this website, please upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

Talbots revises supplier terms

US classic womenswear chain Talbots has struck a new payment deal with suppliers as part of a strategy to reverse its declining performance.
At an investor conference call last week the company said the new terms would result in “enhanced financial flexibility and increased operating cash flow”.

The conference call followed the disclosure of a decision by the retailer’s banks to stop supplying Talbots with letters of credit, which resulted in a 40% drop in the retailer’s share price.

Analysts and retail commentators in the US said the move was further evidence of increasingly tighter credit availability in the retail sector.
Talbots’ new supplier deal includes an “open account” arrangement with suppliers, which has extended payment from 22 days to 45 days. The new terms cover suppliers that make up about 75% of the company’s buying from outside the US.

Talbots added that it had secured US$165 million (£83m) of working capital through lines of credit, which would help to fund its turnaround strategy.

The company said it would continue talks with banks to extend its credit lines if necessary, although it stressed it would be unlikely to need it.
During the conference call, the company reiterated its commitment to growing its turnover by 3% for the 2008 financial year.

Earlier this month, Talbots outlined plans to open 35 stores for its Talbots Woman fascia over the next five years, as well as 40 outlet stores in the next three years (Drapers, April 12).

Talbots has about 1,400 Talbots and J Jill stores in the US, Canada and Japan.

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.