Talbots says it can finance strategic plan
HINGHAM, Mass. Talbots reported today that it expects arrangements with its major vendors, along with currently available working capital lines, are expected to be sufficient to fund Talbots working capital needs under its 2008 operating plan.
As reported in the Form 8-K, the company’s major vendors, which represent approximately 75% of Talbots offshore merchandise purchases, have agreed to “open account” terms with payment in 45 days. The revised terms extend the settlement period to 45 days from approximately 22 days on letter of credit purchases, which the vompany expects will effectively add approximately $40 million to the company’s 2008 operating cash flow.
Talbots president and ceo, Trudy Sullivan, said, “While the credit and financial markets are in a state of considerable flux, we have an alternate plan in place, and have revised most of our vendor relationships to maximize the company’s financial flexibility and greatly reduce our need for letters of credit. We are confident in the long-term benefits of these actions as we proceed with the execution of our strategic plan.”