Private Equity Buyout Might be Talbots’ Last Chance

Elaine Misonzhnik / Retail Traffic

In December, Talbots rejected a $3 per share unsolicited buyout proposal from Sycamore Partners, a New York-based private equity firm, because its executives felt the bid undervalued the company. Facing plummeting sales and a large debt load, however, Talbots needs a savior with deep pockets to revamp its image and help it hold its own against competitors including Ann Taylor, Chico’s and Coldwater Creek.

On Jan. 20, several news outlets reported that Talbots started actively soliciting bids for the company, with frequent retail buyers Golden Gate Capital and Texas Pacific Group (TPG) singled out as potential bidders. Talbots declined to comment on the matter.

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The only thing that Talbots’ has to appeal to potential buyers right now is “a low stock price, because it’s going to take a lot to reposition” the chain, according to Jeff Green, president of Jeff Green Partners, a Phoenix-based retail real estate consulting firm.

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