Talbots' Q4 loss worse than expected, shares fall

By Alexandria Sage

SAN FRANCISCO (Reuters) - Talbots Inc's (TLB.N) deeper-than-expected quarterly loss and staid sales projections sent its shares diving 15 percent after the closing bell on Monday, overshadowing news of a new $150 million loan facility that the women's apparel retailer says will boost liquidity.

The new facility, secured through majority owner Aeon Co Ltd (8267.T) of Japan, will help the company "navigate through these most turbulent times", Chief Executive Trudy Sullivan said in a statement.

Loss-making Talbots, trying to engineer a turnaround through cost-cuts and new designs, also said it had signed a letter of intent with Li & Fung Ltd (0494.HK) to explore the possibility of enlisting the Hong Kong-based sourcing giant as its primary sourcing agent.

That should simplify sourcing, reduce operating costs and potentially cut the cost of goods, Talbots said.

The company posted a net loss in the fourth quarter of $366.5 million, or $6.85 share, compared with a loss of $171.4 million, or $3.22 per share, a year earlier.

Excluding a $66 million tax-related charge, as well as restructuring and asset impairment charges, its quarterly loss per share was $1.17. Analysts, on average, expected a loss of 66 cents per share, according to Reuters Estimates.

Sales fell 16 percent to $327.9 million, the company said.

REJUVENATION 101