Talbots Picks Printer, Amends Merger Agreement, Gives Guidance
Talbots has selected Quad/Graphics to exclusively provide printing services for all of its catalogs. The new, multi-million dollar agreement calls for Quad/Graphics to provide premedia services, printing and distribution capabilities.
During its fiscal 2008 year (the most recent full year on record), the company issued 22 separate Talbots brand catalogs across all business concepts with a circulation of approximately 55 million. The company announced plans to cut catalog circulation down to 34 million in 2009, but has not release final figures yet, according to documents filed with the Securities and Exchange Commission.
Quad’s Premedia Solutions Center in Braintree, MA (near Talbots’ Hingham, MA headquarters) will hand premedia production for the catalogs. Printing will take place at a Lomira, WI-based plant.
Quad has worked with Talbots since 1997, but until this agreement shared printing responsibilities with another company.
Talbots also announced guidance for its fourth quarter, which ended Jan. 30. While final figures are not available, Talbots indicated its fourth-quarter revenue would be 4% below fourth-quarter 2008’s level – an improvement over the 6%-8% decline it had originally predicted. Direct marketing revenue was expected to be stronger than in the previous year, growing 11% above fourth-quarter 2008’s level.
In fourth-quarter 2008, Talbots generated $327.9 million in sales and recorded a net loss of $361.5 million. Roughly $230 million of its fourth-quarter loss was from discontinued operations.
Separately, the company has modified the stock exchange ratio under which it will acquire in BPW Acquisition. It had previously said it would give 0.9853 shares of Talbot stock for every share of BPW held by stakeholders. Under the new agreement, the new ratio will be based on the average price of Talbots’ stock, divided by $11.25.