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Ugliness at Talbots

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December 07, 2011 – Comments (10) | RELATED TICKERS: TLB.DL

Wow. Interesting week for Talbots.

Awful quarter reported last week (not shocking, of course); Trudy Sullivan's finally on the way out (well, at some point between now and the next six months) but with a sweet goodbye package that shafts shareholders; and now Sycamore's offer to buy the company. HOWEVER, I think investors ought not be so gleeful about an offer that wrapped in prose like this (linking to letter from the SEC filing).

That's putting $3 lipstick on this retail stock pig, ha. Seriously, read the letter, it's a nice litany of how screwed up this company is. And the statement that Talbots' board has "rebuffed" these guys, well, good luck to the people who were buying up shares today on this news. Any thoughts?

10 Comments – Post Your Own

#1) On December 07, 2011 at 10:00 PM, materialsman92 (35.15) wrote:

Yes I agree a crazy week. I find it unlikely that Talbots shareholders would accept a $3 buyout as most believe a turn around is still possible, albeit difficult considering the company has failed for the past 3-4 years and the company was valued at $1 billion at the beginning of the year now to be around 1/5 of that. I think it shareholders might be willing to accept a buyout in the neighborhood of around $5 a share.  

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#2) On December 08, 2011 at 12:06 PM, TMFLomax (50.55) wrote:

I find it interesting if its shareholders think a turnaround is still possible... this company has struggled for a LONG time, and I have a feeling the drubbing its brand has taken over many, many years may make it beyond hope. Obviously some people feel differently; clearly Sycamore, for one, thinks the situation is fixable. But man, I couldn't help but wonder about Sycamore's comment about how, if it was allowed to look at the books, it might offer a higher premium -- I find that rather astounding. (I've been a bear on TLB for a long time, though... so of course I find that astounding, ha.)

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#3) On December 08, 2011 at 12:41 PM, materialsman92 (35.15) wrote:

Here's a good article I read today about Talbots the lawyers on the case about the possible breaches of feduciary duty probably have a lot of these things on their minds.

 http://seekingalpha.com/article/312529-why-i-have-contempt-for-talbots-management-and-board?source=yahoo 

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#4) On December 08, 2011 at 2:41 PM, materialsman92 (35.15) wrote:

See I knew it (from the Wall Street Journal) :

 

Talbots Largest Shareholder Not a Fan of Sycamore's Offer 

A portfolio manager at OppenheimerFunds, Talbots’s biggest shareholder, is speaking out against the nearly $210 million takeover offer made by 10% owner Sycamore Partners.

The fund company owns nearly a 12% stake and Mitch Williams, portfolio manager of the Oppenheimer Value Fund, calls the bid a “very opportunistic” effort to pick up Talbots’s assets on the cheap.

With CEO Trudy Sullivan poised to leave, Williams tells Dow Jones the women’s apparel retailer can get back on track, again catering to its historical middle-aged-to-older clientele base. “That customer segment is very underserved in retail.”

 

 

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#5) On December 08, 2011 at 2:58 PM, TMFLomax (50.55) wrote:

Thanks for the heads up on these articles. But man, I totally disagree that "that customer segment is very underserved in retail." There are quite a few competitors for TLB's demographic and on top of that TLB has consistently missed the mark in providing merch they want. Interesting if that's the reason Oppenheimer thinks this is an undervalued company; I think that manager may be missing the plot.

This situation should definitely get more interesting. I never thought TLB was a good stock, but it has definitely been interesting to watch the events associated with it.

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#6) On December 08, 2011 at 3:03 PM, materialsman92 (35.15) wrote:

Yea no problem TMFLomax

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#7) On December 08, 2011 at 11:50 PM, materialsman92 (35.15) wrote:

I just discovered Talbots on Facebook and I was shocked to see that they have over 160k likes/followers. If you go to Talbot's profile pictures on Facebook and read some of the comments you will quickly see that some of these people still love the brand. There is still some positive view toward Talbots which gives it an edge if it can reinvigorate its styling which is why so many loyal customers have left.

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#8) On December 09, 2011 at 12:57 PM, TMFLomax (50.55) wrote:

materialsman92

Fascinating... I'll have to go check that out on Facebook! Maybe customers would be willing to come back if it gets it act together to a greater extent than I realized. As always, it should be interesting to watch what happens.

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#9) On January 20, 2012 at 4:27 PM, materialsman92 (35.15) wrote:

TMFLomax

Someone else thinks the company is a value play at current levels.  

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#10) On January 20, 2012 at 4:29 PM, TMFLomax (50.55) wrote:

Interesting... I guess we'll see what happens, although I usually take takeover speculation with a giant grain of salt. Thanks for alerting me, I hadn't caught that news today!

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