US: Talbots revises payment terms as banks cut credit
Women's wear retailer The Talbots Inc has revised payment terms with its major vendors after two major banks decided to cancel their lines of credit.
In a filing with the Securities and Exchange Commission earlier this week, the Hingham, Massachusetts-based retailer said its existing $135m letter of credit facility with HSBC would be reduced in increments and would not be renewed after 8 August.
It also said Bank of America has cancelled its $130m credit line.
Talbots said yesterday (16 April) that its currently available working capital lines of $165m are "expected to be sufficient" to run the company in 2008.
But it said major vendors, who account for around 75% of Talbots' offshore merchandise purchases, have agreed to "open account" terms with payment in 45 days.
The revised terms extend the settlement period to 45 days from 22 days on letter of credit purchases. This should add $40m to the company's 2008 operating cash flow it said.
Purchases from the remaining smaller vendors will be covered by a $50m letter of credit line - and it is talking with several financial institutions to supply this.
Talbots president and chief executive officer, Trudy F Sullivan, said: "While the credit and financial markets are in a state of considerable flux, we have revised most of our vendor relationships to maximise the company's financial flexibility.
"We are confident in the long-term benefits of these actions as we proceed with the execution of our strategic plan."
Talbots, which operates 1,149 stores under the Talbots name and 273 stores under the J Jill brand, is trying to turn around its operations.
In January, the retailer revealed plans to close 78 children's and men's apparel stores and instead focus on its core middle-aged female customer.
In its fourth quarter to 2 February, the company posted a loss of $171m, with sales down 8% to $587m.
Help test our new apparel sourcing tool.
Women’s wear retailer The Talbots Inc is in the midst of a major turnaround aimed at slashing costs by $100m by the end of next year and restoring its business to profitable growth. Earlier this month...
Falling clothing sales sent retail group Aeon sliding to a first-half net loss of JPY16bn (US$159m), but failed to dent the company's full-year profit hopes....
Footwear manufacturer Steven Madden has agreed a shoe licensing deal with Dualstar Entertainment Group for Elizabeth and James branded footwear....
Women's wear retailer The Talbots Inc has named Sue Walsh as senior vice president of stores for the J Jill brand....
US clothing retailer The Talbots said its net loss for the second quarter was US$25m, compared to $13.3m for the same period last year, as it continued to struggle against restructuring charges....
Footwear, accessories and sportswear maker Kenneth Cole Productions Inc has swung to a second quarter loss, after lower demand from department stores hurt its wholesale business....
Women's wear retailer The Talbots Inc has appointed an executive from its majority shareholder, Japanese retail conglomerate Aeon Co, as non-executive chairman of the board....
Women's wear retailer The Talbots Inc has finalised the terms of a $50m loan from its majority shareholder, the Japanese retail conglomerate Aeon Co Ltd, to support its turnaround plan....
- Unlocks for the future fashion sourcing landscape
- EU eyes mandatory due diligence for apparel supply
- Geo-political uncertainty and how to survive it
- What TTIP might mean for US, EU textiles & apparel
- Where next for Corporate Human Rights Benchmark?
- Li & Fung forms supply chain partnership with PVH
- US Q4 in brief – Finish Line, Oxford Industries
- Sears has "substantial doubt" of future
- Target unveils "ambitious" store re-design plans
- Bangladesh workers call for union registration
- Central and East Europe Report Package
- Central America strategic sourcing review - a focus on Guatemala, El Salvador and Honduras
- Southeast Asia strategic sourcing review – a focus on Cambodia, Vietnam and Myanmar
- When Things Go Wrong - A Practical Guide to Managing Common Problems in Apparel Sourcing
- Outdoor performance apparel 2016: A broader perspective