Talbots shares fall on weak 1st-quarter sales forecast

Stock Market Predictions

(Global Markets) - Shares of Talbots Inc (TLB.N) fell as much as 12 percent after the ailing retailer forecast lower-than-expected first-quarter revenue.

The company's shares fell to a low of $2.77, making it the biggest percentage loser on New York Stock Exchange on Friday. The stock was later trading at $2.82.

The women's clothing retailer, once a popular destination for its classic fashions, has been consistently lagging peers Ann Inc (ANN.N) and Chico's FAS Inc (CHS.N) and has been clearing out excess inventory by offering heavy discounts and higher promotions.

On Thursday, Talbots said it planned to close 110 stores this fiscal year.

"I think they've lost some of their core customers, so yes, I think these sales trends will continue in the future," analyst Margaret Whitfield of Sterne, Agee & Leach told Global Markets.

Talbots has put itself up for sale and is also currently looking for a replacement for Chief Executive Trudy Sullivan who has unsuccessfully tried to shed the chain's stodgy pearls-and-classics image and boost sagging sales with new store formats, cost cuts and by chasing younger shoppers.

The women's retailer, currently exploring strategic options opened its books to Sycamore Partners in January in an effort to get the private equity firm to raise its original buyout offer, which the retailer had snubbed.

"They are in a very tough spot if you look at the balance sheet. I'm expecting that an offer will come in and they will be bought out," Whitfield added.

(Reporting by Juhi Arora in Bangalore; Editing by Sreejiraj Eluvangal)