8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) September 6, 2011  

THE TALBOTS, INC.

(Exact Name of Registrant as Specified in Charter)

Delaware	1-12552	41-1111318
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

One Talbots Drive, Hingham, Massachusetts	02043
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (781) 749-7600  

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

INFORMATION TO BE INCLUDED IN THE REPORT

Section 2 — Financial Information

Item 2.02 Results of Operations and Financial Condition.

     Attached and being furnished as Exhibit 99.1 is a copy of a press release of The Talbots, Inc. (“Talbots” or the “Company”) dated September 7, 2011, reporting Talbots financial results for the second quarter of fiscal 2011.

     To supplement the Company’s financial results presented in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), the Company uses, and has also included in the attached press release, certain non-GAAP financial measures. These non-GAAP financial measures should not be considered in isolation, or as a substitute for, or superior to, financial measures calculated in accordance with GAAP and are used solely to provide supplemental information together with our reported GAAP amounts. These non-GAAP financial measures may also be calculated differently from similar measures disclosed by other companies.

     To ease the use and understanding of our non-GAAP financial measures, the Company provides a detailed reconciliation of such non-GAAP financial measures and identifies each of the exclusions in arriving at the Company’s adjusted (non-GAAP) amounts.

     In the accompanying press release, the Company includes fiscal 2011 and fiscal 2010 results from continuing operations and operating income which exclude the following special items: impairment and restructuring charges, merger-related costs, costs associated with the store re-image initiative and the impact of a change in tax estimate.

     Management uses these financial measures, together with GAAP results, as an additional tool in assessing the impact and results of the Company’s ongoing strategic initiatives, evaluating historical core operating performance and any potential trends in the Company’s core operating performance, assessing management performance, and assessing operating performance against other companies. Management believes that these financial measures are helpful to investors as an additional tool to further facilitate an investor’s understanding and evaluation of the Company’s operating performance, as these measures identify items which management believes impact comparability and which are not necessarily indicative of ongoing core operating performance.

     Material limitations of these financial measures are: (i) such measures do not reflect actual GAAP amounts and adjust for special items which impact the corresponding GAAP amounts, such as GAAP margins, GAAP income and GAAP earnings per share, as applicable; (ii) such measures may involve actual cash outlays or inflows which impact cash flows; (iii) a majority of merger-related costs reflect actual cash outlays; (iv) impairment charges reflect an actual decrease in the carrying value of one or more assets based on current estimates of the fair value of those assets; (v) charges related to the Company’s store re-image initiative reflect non-cash accelerated depreciation and disposal costs; (vi) the change in tax estimate involves a potential cash liability to be satisfied from future cash flows and (vii) restructuring charges include cash outlays which impact cash flows. All of the above may be material to an investor’s understanding of the Company’s financial position. Management compensates for these limitations by clarifying that these measures are only supplemental to the reported GAAP operating metrics and should not be considered in isolation, and by providing the directly comparable GAAP financial measure.

     Exclusion of items in the Company’s non-GAAP measures should not be considered as an inference that these items are unusual, infrequent or non-recurring.

Section 5 — Corporate Governance and Management

Item 5.02 — Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

     On September 6, 2011, the Company notified Michael Smaldone that he will cease to serve as the Company’s Chief Creative Officer.

Section 9 — Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

99.1	Press Release of The Talbots, Inc. dated September 7, 2011.
99.2	Press Release of The Talbots, Inc. dated September 7, 2011.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	THE TALBOTS, INC.
Dated: September 7, 2011	By:	/s/ Michael Scarpa
		Name:	Michael Scarpa
		Title:	Chief Operating Officer, Chief Financial Officer and Treasurer

EX-99.1

Exhibit 99.1

TALBOTS REPORTS SECOND QUARTER FISCAL 2011 RESULTS

     HINGHAM, MA, September 7, 2011 — The Talbots, Inc. (NYSE:TLB) today reported results for the quarter ended July 30, 2011 and commented on key initiatives and actions as well as third quarter 2011.

     Second quarter loss from continuing operations was $37.4 million, or $0.54 per share, compared to last year’s income from continuing operations of $0.5 million or $0.01 per share.

     Adjusted second quarter loss from continuing operations was $35.5 million, or $0.51 per share, excluding special items of $1.9 million, or $0.03 per share, compared to last year’s adjusted income from continuing operations of $9.8 million, or $0.14 per share. A full reconciliation of GAAP to non-GAAP (“adjusted”) results is included with this release.

     Trudy F. Sullivan, Talbots President and Chief Executive Officer, commented, “As expected, our second quarter results reflect high levels of promotional and markdown activity. While we remain confident in our long-term strategic direction, in the near-term we are focused on delivering a more compelling, balanced merchandise assortment and driving improved top-line sales. We announced separately this morning that we have made a change in our leadership team with respect to the oversight of creative and design which we believe will facilitate improvements to the direction of our merchandise and our overall brand positioning.”

Second Quarter 2011 Operating Results:

• Operating loss was approximately $34.0 million, compared to prior year’s operating income of $8.7 million.

• Adjusted operating loss, excluding special items of $1.9 million, was $32.1 million, a decrease of $44.6 million, compared to prior year’s adjusted operating income of $12.5 million.

• Net sales decreased 9.9% to $271.1 million, compared to $300.7 million in the same period last year.

• Consolidated comparable sales decreased 10.4%, which includes Internet, catalog and red-line sales. Consolidated comparable sales exclude stores scheduled to close under the Company’s store rationalization plan.

• Store sales decreased 9.1% to $228.0 million, compared to $250.8 million in the same period last year. Comparable store sales decreased 11.1% in the second quarter of 2011, excluding stores scheduled to close under the Company’s store rationalization plan.

• Direct marketing sales, including Internet, catalog and red-line, decreased 13.6% in the quarter to $43.1 million, compared to $49.9 million in the same period last year.

• Cost of sales, buying and occupancy as a percent of net sales increased 1,150 basis points to 76.6% compared to 65.1% last year. This increase was due to a 950 basis point deterioration in merchandise margin, resulting from higher levels of markdown and promotional activity, as well as a 200 basis point deterioration in buying and occupancy costs as a percent of net sales.

• Selling, general & administrative (SG&A) expenses as a percent of net sales increased 460 basis points to 35.6%, reflecting a $3.3 million increase in SG&A expenses over the prior year period. This dollar increase was due primarily to an increase in marketing spend over last year and a decrease in finance charge income from Talbots credit card compared to the prior year period.

• Total inventory increased 25.8% to $163.9 million, compared to $130.3 million in the same period last year, due mainly to lower than anticipated sales volume and the earlier timing of fall receipts compared to a year ago.

• Total outstanding debt was $83.9 million, an increase of $46.5 million compared to $37.4 million in the same period last year.

• In the second quarter, the Company opened 7 Talbots upscale outlets, closed 9 Talbots stores and ended the period with 566 stores, including 39 Talbots upscale outlet stores.

First Half of Fiscal 2011 Operating Results:

• Loss from continuing operations for the twenty-six weeks ended July 30, 2011 was $36.4 million, or $0.53 per share, compared to last year’s loss from continuing operations of $6.6 million, or $0.10 per share.

• Adjusted loss from continuing operations for the twenty-six week period ended July 30, 2011, excluding special items of $6.3 million, or $0.09 per share, was $30.1 million, or $0.44 per share, compared to last year’s adjusted income from continuing operations of $31.5 million, or $0.50 per share.

• Operating loss was $30.9 million, a decrease of $42.5 million, compared to prior year’s operating income of $11.6 million.

• Adjusted operating loss, excluding special items of $6.3 million, was $24.5 million, a decrease of $68.7 million, compared to prior year’s adjusted operating income of $44.1 million.

• For the twenty-six week period, total net sales decreased 7.9% to $572.4 million, compared to $621.4 million in the same period last year.

• Consolidated comparable sales decreased 8.9%, which includes Internet, catalog and red-line sales. Consolidated comparable sales exclude stores scheduled to close under the Company’s store rationalization plan.

• Store sales decreased 7.8% to $468.8 million, compared to $508.4 million in the same period last year. Comparable store sales decreased 9.6% for the twenty-six week period.

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• Direct marketing sales decreased 8.2% for the twenty-six week period to $103.6 million, compared to last year’s sales of $113.0 million.

Key Initiatives Update:

Store Rationalization Plan

     The Company closed 9 stores during the second quarter and has closed 15 in the first six months of the fiscal year as part of its accelerated store rationalization plan. The Company expects to close approximately 110 stores in total, including 15 to 20 consolidations, through fiscal 2013. Approximately 83 stores are expected to close in fiscal 2011, approximately 25 stores are planned for closure in fiscal 2012 and approximately two stores are planned to close in fiscal 2013.

     The 110 stores that have closed or are planned for closure contributed approximately $24.2 million in sales and $1.4 million in operating loss in the second quarter of 2011, including $1.0 million in restructuring charges. This compares to last year’s second quarter contribution of approximately $22.8 million in sales and approximately $1.6 million in operating income. There were no restructuring charges attributable to these stores in the second quarter of 2010.

Capital and Expense Management

     As an extension of the existing strategic partnership with Li & Fung, the Company’s exclusive global apparel sourcing agent, Talbots has entered into an arrangement under which the Company will have the ability to extend payment terms for an additional 30 days for merchandise purchases sourced by Li & Fung up to $50 million at any time. Beginning September 1, 2011, this arrangement is expected to remain in effect through February 2012, with an option to renew for an additional six months, subject to the approval of both parties. In connection with this exclusive sourcing arrangement, Li & Fung will also open letters of credit on behalf of Talbots for certain of its future merchandise purchases.

     Additionally, the Company has reduced its expected capital expenditures for fiscal 2011 to approximately $47 million, versus its previously planned $60 million. Talbots will also maintain close scrutiny of operating costs and will continue to pursue opportunities to lower expenses. These actions have been implemented as part of the Company’s actions to enhance its working capital, improve its cost structure and increase its financial flexibility.

Third Quarter 2011 Comments

     Third quarter-to-date sales and customer traffic continue to trend negative, with top-line sales to date down approximately 8% compared to the same period last year. The Company expects high levels of promotional and markdown activity to continue throughout the third quarter, resulting in an expected increase in cost of sales, buying and occupancy as a percent of net sales of approximately 600 to 800 basis points compared to the same period last year. Selling, general and administrative expenses on a dollar basis are expected to decrease slightly compared

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to the prior year third quarter, including planned incremental marketing investments offset by cost reductions in other areas.

     Ms. Sullivan concluded, “While sales quarter-to-date remain under pressure, thus far in September our sales trends have meaningfully improved versus August and we are seeing better performance in those key merchandise categories where we focused on making adjustments to the product design. Looking ahead to the back half of the year, we anticipate challenging market conditions may persist given the uncertain economic environment and inflationary pressures. However, we continue to be focused on our key strategic initiatives and are taking aggressive action to execute against our long-term plan.”

     The above outlook is based on the Company’s internal assumptions and estimates, is subject to its accompanying forward-looking statement and is not a guarantee of future performance or financial condition.

Conference Call Details

     As previously announced, Talbots will host a conference call today September 7, 2011, at 10:00 a.m. local time to discuss second quarter 2011 results. To listen to the live call, please dial (866) 336-2423, passcode “TLB” or log on to www.thetalbotsinc.com/ir/ir.asp. The call will be archived on its web site www.thetalbotsinc.com for a period of twelve months. In addition, an audio replay of the call will be available shortly after its conclusion and archived through September 9, 2011. This archived call may be accessed by dialing (855) 859-2056; passcode 90524899.

     The Talbots, Inc. is a leading specialty retailer and direct marketer of women’s apparel, shoes and accessories. At the end of the second quarter 2011, the Company operated 566 Talbots stores in 46 states and Canada. Talbots brand on-line shopping site is located at www.talbots.com.

CONTACT:	The Talbots, Inc.
	Julie Lorigan
	Senior Vice President, Investor and Media Relations
	(781) 741-7775
	FD
	Leigh Parrish, Evan Goetz
	Investor and Media Relations
	(212) 850-5651, (212) 850-5639

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Forward-looking Information

     This Press Release contains forward-looking information within the meaning of The Private Securities Litigation Reform Act of 1995. These statements may be identified by such forward-looking terminology as “expect,” “achieve,” “plan,” “look,” “projected,” “believe,” “anticipate,” “outlook,” “will,” “would,” “should,” “intend,” “potential” or similar statements or variations of such terms. All of the information concerning our future liquidity, future net sales, margins and other future financial performance and results, achievement of operating plan or forecasts for future periods, sources and availability of credit and liquidity, future cash flows and cash needs, success and results of strategic initiatives and other future financial performance or financial position, as well as our assumptions underlying such information, constitute forward-looking information. Our forward-looking statements are based on a series of expectations, assumptions, estimates and projections about the Company, are not guarantees of future results or performance and involve substantial risks and uncertainty, including assumptions and projections concerning our internal operating plan, regular-price, promotional and markdown selling, operating cash flows, liquidity and sources and availability of credit for all forward periods. Our business and our forward-looking statements involve substantial known and unknown risks and uncertainties, including the following risks and uncertainties:

• the ability to successfully increase our customer traffic and the success and customer acceptance of our merchandise offerings in our stores, on our website and in our catalogs;

• the risks associated with our efforts to successfully implement, adjust as appropriate and achieve the benefits of our current strategic initiatives including store segmentation, store re-imaging, store rationalization, enhanced marketing, information technology reinvestments, upscale outlet expansion and any other future initiatives that we may undertake;

• the ability to achieve our operating plan and strategic plan for operating results, working capital and cash flows;

• the ability to access on satisfactory terms, or at all, adequate financing and other sources of liquidity, as and when necessary, to fund our continuing operations, working capital needs, strategic initiatives and other cash needs, and to obtain further increases in our Credit Facility or obtain other or additional credit facilities or other internal or external liquidity sources if cash flows from operations or other capital resources are not sufficient for our cash requirements at any time or times;

• the satisfaction of all borrowing conditions under our Credit Facility including accuracy of all representations and warranties, no defaults or events of default, absence of material adverse effect or change and all other borrowing conditions;

• the risks associated with our efforts to maintain our traditional customer and expand to attract new customers;

• the risks associated with competitive pricing pressures and the current increased promotional environment;

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• the risks associated with our on-going efforts to adequately manage the increase in various input costs, including increases in the price of raw materials, higher labor costs in countries of manufacture and any significant increases in the price of fuel, which impacts our freight costs;

• the continuing material impact of the U.S. economic environment on our business, continuing operations, liquidity and financial results, including any negative impact on consumer discretionary spending, substantial loss of household wealth and savings and continued high unemployment levels;

• the ability to continue to purchase merchandise on open account purchase terms at existing or future expected levels and with acceptable payment terms and the risk that suppliers could require earlier or immediate payment or other security due to any payment concerns;

• the ability to attract and retain talented and experienced executives that are necessary to execute our strategic initiatives;

• the ability to accurately estimate and forecast future regular-price, promotional and markdown selling and other future financial results and financial position;

• the risks associated with our appointment of an exclusive global merchandise buying agent, including that the anticipated benefits and cost savings from this arrangement may not be realized or may take longer to realize than expected and the risk that upon any cessation of the relationship, for any reason, we would be unable to successfully transition to an internal or other external sourcing function;

• the risks and uncertainties in connection with any need to source merchandise from alternate vendors;

• any impact to or disruption in our supply of merchandise;

• the ability to successfully execute, fund and achieve the expected benefits of our supply chain initiatives;

• any significant interruption or disruption in the operation of our distribution facility or the domestic and international transportation infrastructure;

• the risk that estimated or anticipated costs, charges and liabilities to settle and complete the transition and exit from and disposal of the J. Jill business, including both retained obligations and contingent risk for assigned obligations, may materially differ from or be materially greater than anticipated;

• any future store closings and the success of and necessary funding for closing underperforming stores;

• the ability to reduce spending as needed;

• any negative publicity concerning the specialty retail business in general or our business in particular;

• the risk of impairment of goodwill and other intangible or long-lived assets;

• the risk associated with our efforts in transforming our information technology systems to meet our changing business systems and operations;

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• the risks associated with any further decline in our stock price, including satisfaction of NYSE continued listing criteria which requires the average closing price of our common stock to be greater than $1.00 over 30 consecutive trading days and minimum levels of market capitalization; and

• the risks and uncertainties associated with the outcome of current and future litigation, claims, tax audits and tax and other proceedings and the risk that actual liabilities, assessments or other financial impact will exceed any estimated, accrued or expected amounts or outcomes.

     All of our forward-looking statements are as of the date of this Press Release only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of or any material adverse change in one or more of the risk factors or risks and uncertainties referred to in this Press Release or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the SEC could materially and adversely affect our continuing operations and our future financial results, cash flows, available credit, prospects and liquidity. Except as required by law, we do not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking statements occurring after the date of this Press Release, even if such results, changes or circumstances make it clear that any forward-looking information will not be realized. Any public statements or disclosures by us following this Press Release which modify or impact any of the forward-looking statements contained in this Press Release will be deemed to modify or supersede such statements in this Press Release.

     In addition to the information set forth in this Press Release, you should carefully consider the risk factors and risks and uncertainties included in our Annual Report on Form 10-K for the fiscal year ended January 29, 2011 and other periodic reports filed with the SEC.

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THE TALBOTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Amounts in thousands except per share data

	Thirteen Weeks Ended					Twenty-Six Weeks Ended
	July 30,			July 31,		July 30,			July 31,
	2011			2010		2011			2010
Net sales	$	271,092		$	300,742	$	572,402		$	621,403
Costs and expenses
Cost of sales, buying and occupancy		207,702			195,777		401,667			376,622
Selling, general and administrative		96,411			93,075		196,222			201,214
Restructuring charges		1,005			112		3,270			5,071
Impairment of store assets		—			—		1,217			6
Merger-related costs		—			3,050		885			26,863
Operating (loss) income		(34,026	)		8,728		(30,859	)		11,627
Interest
Interest expense		2,571			6,370		4,615			14,805
Interest income		19			21		35			42
Interest expense, net		2,552			6,349		4,580			14,763
(Loss) income before taxes		(36,578	)		2,379		(35,439	)		(3,136	)
Income tax expense		776			1,858		1,007			3,439
(Loss) income from continuing operations		(37,354	)		521		(36,446	)		(6,575	)
Income (loss) from discontinued operations, net of taxes		21			420		(148	)		3,148
Net (loss) income	$	(37,333	)	$	941	$	(36,594	)	$	(3,427	)
Basic (loss) earnings per share:
Continuing operations	$	(0.54	)	$	0.01	$	(0.53	)	$	(0.10	)
Discontinued operations		—			—		—			0.05
Net (loss) earnings	$	(0.54	)	$	0.01	$	(0.53	)	$	(0.05	)
Diluted (loss) earnings per share:
Continuing operations	$	(0.54	)	$	0.01	$	(0.53	)	$	(0.10	)
Discontinued operations		—			—		—			0.05
Net (loss) earnings	$	(0.54	)	$	0.01	$	(0.53	)	$	(0.05	)
Weighted average shares outstanding:
Basic		69,074			68,338		68,891			63,105
Diluted		69,074			69,520		68,891			63,105

THE TALBOTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
Amounts in thousands

	July 30,		January 29,		July 31,
	2011		2011		2010
Cash and cash equivalents	$	7,128	$	10,181	$	4,650
Customer accounts receivable, net		136,732		145,472		155,606
Merchandise inventories		163,922		158,040		130,344
Other current assets		54,721		37,419		57,474
Total current assets		362,503		351,112		348,074
Property and equipment, net		180,561		186,658		195,004
Goodwill		35,513		35,513		35,513
Trademarks		75,884		75,884		75,884
Other assets		18,292		19,349		19,527
Total Assets	$	672,753	$	668,516	$	674,002
Accounts payable	$	112,535	$	91,855	$	80,153
Accrued liabilities		117,388		137,824		147,487
Revolving credit facility		83,898		25,516		37,365
Total current liabilities		313,821		255,195		265,005
Deferred rent under lease commitments		84,863		93,440		103,588
Deferred income taxes		28,456		28,456		28,456
Other liabilities		94,414		107,839		112,810
Stockholders’ equity		151,199		183,586		164,143
Total Liabilities and Stockholders’ Equity	$	672,753	$	668,516	$	674,002

THE TALBOTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Amounts in thousands

	Twenty-Six Weeks Ended
	July 30,			July 31,
	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(36,594	)	$	(3,427	)
(Loss) income from discontinued operations		(148	)		3,148
Loss from continuing operations		(36,446	)		(6,575	)
Depreciation and amortization		28,021			31,490
Stock-based compensation		5,149			7,755
Amortization of debt issuance costs		1,100			1,996
Impairment of store assets		1,217			6
Gift card breakage income		(295	)		—
Deferred and other items		(7,411	)		(3,198	)
Changes in:
Customer accounts receivable		8,789			8,013
Merchandise inventories		(5,717	)		12,442
Accounts payable		16,755			(24,184	)
Accrued liabilities		(19,036	)		4,075
All other working capital		(31,189	)		(21,255	)
Net cash (used in) provided by operating activities		(39,063	)		10,565
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment		(19,162	)		(5,935	)
Proceeds from disposal of property and equipment		24			15
Cash acquired in merger with BPW Acquisition Corp.		—			332,999
Net cash (used in) provided by investing activities		(19,138	)		327,079
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on revolving credit facility		938,100			684,338
Payments on revolving credit facility		(879,718	)		(646,973	)
Payments on related party borrowings		—			(486,494	)
Payment of debt issuance costs		—			(5,993	)
Payment of equity issuance costs		—			(3,594	)
Proceeds from warrants exercised		—			19,042
Proceeds from options exercised		1			414
Purchase of treasury stock		(2,267	)		(1,800	)
Net cash provided by (used in) financing activities		56,116			(441,060	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH		378			333
CASH FLOWS FROM OPERATING ACTIVITIES OF DISCONTINUED OPERATIONS		(1,346	)		(5,042	)
NET DECREASE IN CASH AND CASH EQUIVALENTS		(3,053	)		(108,125	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		10,181			112,775
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	7,128		$	4,650

SEC Regulation G

THE TALBOTS, INC. AND SUBSIDIARIES

Reconciliation of GAAP (loss) income from continuing operations to
non-GAAP (“adjusted”) (loss) income from continuing operations (unaudited)
Amounts in thousands except per share amounts

	For the 13 weeks ended						For the 13 weeks ended
	July 30, 2011						July 31, 2010
(Loss) income from continuing operations	$	(37,354	)	$	(0.54	)	$	521	$	0.01
Restructuring charges		1,005			0.02			112		—
Merger-related costs		—			—			3,050		0.04
Store re-image initiative (a)		886			0.01			577		0.01
Change in tax estimate (b)		—			—			5,546		0.08
Adjusted (loss) income from continuing operations	$	(35,463	)	$	(0.51	)	$	9,806	$	0.14

	For the 26 weeks ended						For the 26 weeks ended
	July 30, 2011						July 31, 2010
Loss from continuing operations	$	(36,446	)	$	(0.53	)	$	(6,575	)	$	(0.10	)
Restructuring charges		3,270			0.05			5,071			0.08
Impairment of store assets		1,217			0.02			6			—
Merger-related costs		885			0.01			26,863			0.42
Store re-image initiative (a)		959			0.01			577			0.01
Change in tax estimate (b)		—			—			5,546			0.09
Adjusted (loss) income from continuing operations	$	(30,115	)	$	(0.44	)	$	31,488		$	0.50

Reconciliation of GAAP operating (loss) income to non-GAAP (“adjusted”) operating (loss) income (unaudited)
Amounts in thousands

	For the 13 weeks ended			For the 13 weeks ended
	July 30, 2011			July 31, 2010
Operating (loss) income	$	(34,026	)	$	8,728
Restructuring charges		1,005			112
Merger-related costs		—			3,050
Store re-image initiative (a)		886			577
Adjusted operating (loss) income	$	(32,135	)	$	12,467

	For the 26 weeks ended			For the 26 weeks ended
	July 30, 2011			July 31, 2010
Operating (loss) income	$	(30,859	)	$	11,627
Restructuring charges		3,270			5,071
Impairment of store assets		1,217			6
Merger-related costs		885			26,863
Store re-image initiative (a)		959			577
Adjusted operating (loss) income	$	(24,528	)	$	44,144

(a)	Costs incurred related to the store re-image initiative include accelerated depreciation of leasehold improvements and other costs associated with property disposed of under the program.
(b)	In the second quarter of 2010, the Company changed its estimate related to certain previously existing uncertain tax positions (FIN 48 liabilities), based on new information. The tax and interest expense recorded represents the Company’s best estimate of potential exposure.

THE TALBOTS, INC. AND SUBSIDIARIES
Additional Store Metrics

Store Count (unaudited)

	July 31,
	2010		Openings		Closings			January 29, 2011		Openings		Closings			Conversions			July 30, 2011
Retail		537		—		(16	)		521		—		(15	)		—			506
Upscale Outlets		22		7		(1	)		28		13		—			(2	)		39
Surplus Outlets		21		—		(2	)		19		—		—			2			21
Total		580		7		(19	)		568		13		(15	)		—			566

Total Store Selling Square Footage (unaudited)
Amounts in thousands

	July 31,		January 29,		July 30,
	2010		2011		2011
Retail		2,951		2,870		2,818
Upscale Outlets		81		101		133
Surplus Outlets		165		149		157
Total		3,197		3,120		3,108

EX-99.2

Exhibit 99.2

TALBOTS ANNOUNCES CHIEF CREATIVE OFFICER CHANGE

     HINGHAM, MA, September 7, 2011 — The Talbots, Inc. (NYSE:TLB) today announced that Mr. Michael Smaldone, Chief Creative Officer, has departed the Company, effective immediately.

     Trudy F. Sullivan, Talbots President and Chief Executive Officer, commented, “While we have made progress in executing our brand vision and product design, customer acceptance needs to improve. Therefore, I have determined it is necessary for us to bring in new creative leadership. The creative process is a team effort, and we are confident in the ability of our strong bench of experienced and talented designers and merchants to continue to move forward during this transition period. We believe the action we have taken will enable us to strengthen the execution of our brand and merchandise initiatives going forward.”

     The Company has an active search for a replacement underway. Ms. Sullivan will assume the chief creative responsibilities while the search is completed. During the transition, the Company’s Senior Vice President of Design will report directly to Ms. Sullivan.

     “We thank Michael for his commitment and passion during his time at the Company,” concluded Ms. Sullivan.

     The Company also separately reported results for the quarter ended July 30, 2011 and commented on key initiatives and third quarter 2011. As previously announced, Talbots will host a conference call today September 7, 2011, at 10:00 a.m. local time to discuss second quarter 2011 results. Details regarding the call are included in the second quarter results release.

     The Talbots, Inc. is a leading specialty retailer and direct marketer of women’s apparel, shoes and accessories. At the end of the second quarter 2011, the Company operated 566 Talbots stores in 46 states and Canada. Talbots brand on-line shopping site is located at www.talbots.com.

CONTACT:	The Talbots, Inc.
	Julie Lorigan
	Senior Vice President, Investor and Media Relations
	(781) 741-7775
	FD
	Leigh Parrish, Evan Goetz
	Investor and Media Relations
	(212) 850-5651, (212) 850-5639

Forward-looking Information

     This Press Release contains forward-looking information within the meaning of The Private Securities Litigation Reform Act of 1995. These statements may be identified by such forward-looking terminology as “expect,” “achieve,” “plan,” “look,” “projected,” “believe,” “anticipate,” “outlook,” “will,” “would,” “should,” “intend,” “potential” or similar statements or variations of such terms. All of the information concerning our future liquidity, future net sales, margins and other future financial performance and results, achievement of operating or financial plan or forecasts for future periods, sources and availability of credit and liquidity, future cash flows and cash needs, success and results of strategic initiatives and other future financial performance or financial position, as well as our assumptions underlying such information, constitute forward-looking information. Our forward-looking statements are based on a series of expectations, assumptions, estimates and projections about the Company, are not guarantees of future results or performance and involve substantial risks and uncertainty, including assumptions and projections concerning our internal operating or financial plan, regular-price, promotional and markdown selling, operating cash flows, liquidity and sources and availability of credit for all forward periods. Our business and our forward-looking statements involve substantial known and unknown risks and uncertainties, including the ability to successfully increase our customer traffic and the success and customer acceptance of our merchandise offerings in our stores, on our website and in our catalogs; the ability to attract and retain talented and experienced executives that are necessary to execute our strategic initiatives; the risks associated with our efforts to maintain our traditional customer and expand to attract new customers; the continuing material impact of the U.S. economic environment as well as the risks and uncertainties included under “Risk Factors” and “Forward-looking Information” in our Annual Report on Form 10-K for the fiscal year ended January 29, 2011 and other periodic reports filed with the SEC which are incorporated herein. Our Annual Report on Form 10-K and other periodic reports are available at the Investor Relations section of our Website at www.thetalbotsinc.com.

     All of our forward-looking statements are as of the date of this Press Release only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of or any material adverse change in one or more of the risk factors or risks and uncertainties referred to in this Press Release or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the SEC could materially and adversely affect our continuing operations and our future financial results, cash flows, available credit, prospects and liquidity. Except as required by law, the Company does not undertake to publicly update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.

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