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To: Glenn Petersen who wrote (2384)	1/30/2012 11:03:55 AM
From: Glenn Petersen	Read Replies (1) \| Respond to of 3862

Talbots Considers Sycamore’s Lifeline By EVELYN RUSLI DealBook New York Times January 20, 2012, 10:39 am Talbots may find a home with Sycamore Partners after all. The troubled retail chain has agreed to open its books to the private equity firm, as it considers a possible sale, according to a filing disclosed on Monday. The move comes about one month after Talbots officially rebuffed a $212 million buyout bid by Sycamore, deeming it too low. On Dec. 20, the company said it was exploring its strategic options, effectively putting itself up for sale. Those options now appear limited. Amid deteriorating sales, Talbots seems to be warming to the idea of finally selling itself to Sycamore, one of its largest investors with a 9.9 percent stake. Talbots, according to the filing, will provide Sycamore with “certain confidential information regarding the business, operations, strategy and prospects.” Founded in 1947, the Hingham, Mass.-based retailer carved a niche in the fashion industry, by offering classic pieces, like blouses and pencil skirts, for a mature clientele. But in recent years, the chain has fallen out of favor with fashion analysts, which have criticized the brand for its dowdy style and its failure to appeal to younger generations. The company has also struggled to reshuffle its management team. Last year, Talbots ousted its chief creative officer and announced the retirement of its chief executive, Trudy Sullivan. It has yet to announce replacements for those positions but it has hired Spencer Stuart to lead its C.E.O. search. “As one of Talbots’ largest shareholders, we are concerned by the company’s rapidly deteriorating performance,” Stefan Kaluzny, a Sycamore managing director said in a letter to Talbots in December. “Nonetheless, we believe that Talbots has significant potential and remains a premier, storied brand.” At the time of the letter, Sycamore offered $3 per share but said it was willing to consider upping its offer if it had access to more information. Talbots has a strong presence in North America with some 551 stores in the United States and Canada. But its sales have been weak compared with many competitors, in an already challenging economic environment. It reported losses in the third and second quarter, recording a loss of $22.1 million, or 32 cents a share in the third quarter. With losses mounting, Sycamore has questioned its access to liquidity. As of December 2011, Talbots had used up more than half of a $200 million credit line. Shares of Talbots were relatively flat in early trading on Monday. dealbook.nytimes.com