Talbots Makes More Promises

Talbots (TLB) announced their losses of approximately $171 million for Q4. This compares poorly to last year Q4, in which it broke even. The year is a wash out. In part, the losses are explained by non cash write downs of $149.9 million, which seems to be attributable to J Jill. Okay, a loss is a loss, but check out this quote from the press release:

"This preliminary charge is greater than the initial estimate provided on February 6,2008, due to more conservative growth and earnings projections for the J. Jill brand, combined with a larger discount rate assigned to forward projections.”

What a difference four weeks can make. Then Management lays this one on you:

“The Company anticipates that impairment testing will be completed in the coming weeks.” Excuse me, this means that there may be more write offs because this announcement is unaudited. If you look at the balance sheet goodwill still clocks in at approximately $114 million. Trademarks are still valued at $139 million. So there is lots of room for further write offs.