Talbots still has too many shops: shortseller

December 8, 2009

KRAVETZApparel retailer Talbots announced a deal that will reduce its debt by about $330 million through its purchase of a blank check company.

The company, which caters to older women, has suffered since it bought trendier retailer J. Jill in 2006 for $517 million. But it resold it this year to private equity firm Golden Gate for $75 million.

 Shawn Kravetz, who is president of Esplanade Capital,  which focuses on consumer and retail stocks, had this to say about the J. Jill acquisition at the Reuters Investment Outlook Sumit:
“It will go down as being one of worst acquisitions in the history of retail.”

On the news of Tuesday’s deal:
“Talbot’s was in a turnaround before it was in fashion. ” “If the global financial crisis had lasted just another week or two, and they hadn’t effectively been bailed out but one of their investors, they might have gone away.”

On the number of Talbots stores:
“We could easily live with many fewer Talbots stores– if given a blank check, I am sure Talbots would be delighted to close a lot of them.”

(PHOTO: Reuters)

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