TrafficCourt

Talbot's Debt Trouble

Talbots Inc., the women's clothing chain that lost half its market value in 2007, fell the most in more than 14 years in New York trading after two banks canceled $265 million in letters of credit to the retailer.

Talbots plunged $3.85, or 30 percent, to $9 at 2:20 p.m. in New York Stock Exchange composite trading, the biggest drop since its initial share sale in November 1993, after saying yesterday that HSBC Holdings Plc and Bank of America Corp. ended the agreements.

Losing the letters of credit means most suppliers in Asia won't ship goods to Talbots without up-front cash payments, said consultant Michael Appel of Quest Turnaround Advisors LLC. The retailer, which imports most its clothes, had $25.5 million in cash at the end of February, down from $35.9 million a year earlier, according to data compiled by Bloomberg.

Link.

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish