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Talbots to Close Mens and Kids Stores

POSTED January 5, 2008

HINGHAM, MA - The Talbots, Inc. announced that after a thorough evaluation of its business, it will exit its Talbots Kids and Talbots Mens concepts by September 2008. The decision is part of Talbots strategic business review that was announced on October 9, 2007, which is expected to be completed in the first quarter of 2008.

The strategic review revealed that these concepts did not demonstrate the potential to deliver acceptable long-term return on investment. The executive management team, with the full support of the Company's Board of Directors, determined that discontinuing these businesses will enable The Talbots, Inc. to redirect resources and capital towards its core businesses, including Talbots Misses, Petites, Womans, Collection, Accessories & Shoes and J. Jill Missy, Petites and Womans.

Trudy Sullivan, The Talbots, Inc. president and Chief Executive Officer, said, "This is a very important strategic move that will greatly contribute to our ability to focus and reinvigorate our core brands and provide sustainable long-term shareholder value. By exiting these concepts, we can focus exclusively on our company's core strength - the age 35 plus female market, where we believe there is significant opportunity for profitable growth in both our Talbots and J. Jill brands."

"I would like to sincerely thank everyone, who over the years invested considerable time and effort in developing Talbots Kids and Mens. Regrettably we must make these difficult decisions that will help grow and improve our core business."

The Talbots, Inc. will close approximately 78 stores throughout the U.S. as a result of this decision, including 66 Talbots Kids and 12 Talbots Mens stores. The closures will impact approximately 800 full- and part-time positions, or approximately 5% of The Talbots Inc. total workforce. The Company is considering ways to offer the affected associates other opportunities, where feasible.

As a result of these actions, the Company currently anticipates total revenue to be impacted by approximately $100 million on an annualized basis. The Talbots, Inc. currently expects that the ongoing operational benefit resulting from these closings would be approximately $13 to $15 million, or $0.15 to $0.18 per diluted share, on an annualized basis.

The Talbots, Inc. anticipates pre-tax expenses associated with the closings of approximately $5 million, or $0.06 per diluted share in the fourth quarter 2007. Virtually all of this charge is related to the non-cash impairment of store level assets. In addition, the Company expects to incur pre-tax expenses of approximately $34 to $42 million, or $0.40 to $0.49 per diluted share in fiscal 2008. The majority of this charge is attributable to lease liabilities and non-cash impairment of store level assets.