The Talbots Inc. secured a new $75 million term loan, boosting its liquidity as the retailer searches for a replacement for president and chief executive officer Trudy Sullivan and considers its strategic options, which could include a sale of the firm.
The new term loan was led by Wells Fargo Bank and is secured by a first lien on some of the retailer’s real estate and on its intellectual property, equipment and fixtures, as well as a second lien on the rest of its assets. It carries an interest rate equal to 10 percent plus the London Interbank Offered Rate. Talbots also amended its $200 million secured revolving credit facility with GE Capital.
“These transactions enhance the company’s liquidity, and provide Talbots with greater financial flexibility to support the board’s evaluation of a full range of strategic alternatives,” said Sullivan, who is leading the firm until a successor is found. “We are pleased to have the continued support of GE Capital, as well as this new commitment led by Wells Fargo.”
In December, Talbots turned down a takeover offer from Sycamore Partners, which owns 9.9 percent of its stock, and said it would look into strategic alternatives with the help of Perella Weinberg Partners.
“The board has not set a definitive timetable for the completion of its evaluation and the company stated that there can be no assurance of any transaction as a result of the board’s review,” Talbots said.
Talbots has 517 stores across 46 states.