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Troubled Talbots Draws Private Equity Interest

By Galen Moore, Boston Business Journal
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BOSTON (CBS) – The New York private equity firm Sycamore Partners has taken a 9.9 percent stake in troubled women’s clothing retailer The Talbots Inc., the companies disclosed Monday.

Sycamore paid $21.6 million for its share of the company, according to a regulatory filing. As of Friday’s close, Talbots had a market cap of about $244.6 million. Sycamore’s move sent the company’s stock up more than 10 percent, Monday, to a mid-morning high of $3.83.

Sycamore managing director Stefan L. Kaluzny is leading the deal, according to the filing.

Sycamore noted in the filing that it may purchase additional shares in Talbots.

Lisa van der Pool of the Boston Business Journal reports

In any case, the private equity firm’s managers “expect to engage in discussions with management, the board, other stockholders of the Issuer and other relevant parties, concerning the business, assets, capitalization, financial condition, operations, management, strategy and future plans of the Issuer,” according to the filing.

As of Friday’s close, shares in Hingham-based Talbots had lost 60 percent of their value since Jan. 1, on a string of bad news.

The company’s share price dropped 39 percent on one day in June, when Talbots issued negative guidance indicating its efforts to re-vamp itself with a trendier brand would not likely arrest slumping sales in the most recent quarter.

According to a report in the Wall Street Journal, the move makes Sycamore the second-largest shareholder in Talbots, behind OppenheimerFunds.

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