Talbots, the Hingham-based women’s clothing retailer, plans to close its Lakeville distribution center and lay off more than 275 people, according to a notice filed with the state.
According to the Talbots website, the Lakeville facility is its only distribution center — all products delivered to the chain’s stores and customers pass through through the 1-million-square-foot facility. A spokesperson for Talbots said the company plans to move its fulfillment and distribution operations “to other facilities,” but did not provide details and declined to comment further.
Talbots has more than 500 retail locations globally. The company told the state that 277 employees would be laid off in three phases, starting at the end of July and ending by mid-November.
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Founded in 1947, Talbots went private a decade ago after being bought by New York private equity firm Sycamore Partners, whose retail brands include Framingham-based Staples, Lane Bryant, Loft, and Ann Taylor.
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The brand, popular among middle-aged suburban women, has long struggled to appeal to younger consumers. Talbots, which makes corporate workplace staples, also has faced challenges during the pandemic as its customers began working from home. And when Governor Charlie Baker ordered all nonessential businesses to close at the start of the pandemic, Talbots not only had to shutter its retail stores, but it had to temporarily pause work at its Lakeville facility, the only location in the United States that processed orders for online customers. (The facility was able to remain open to produce personal protective equipment.)
S&P Global, a ratings agency, downgraded Talbots in January 2021 to deep junk territory, indicating that it believed the retailer would not be able to pay back its debt.
During the first three quarters of 2020, Talbots’ revenue fell by 40 percent, the agency found, promoting the retailer to take “aggressive action” to preserve cash. It delayed payments, withheld rent, and slashed its “payroll and other expenses,” S&P Global said.
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“The company is experiencing sales declines as its customers avoid shopping and attending events requiring new clothes,” the agency said in a press release, adding that the retailers “core customers are 55 years old and older,” a demographic more susceptible to the effects of COVID-19.
Meanwhile, as cash was dwindling, debt payments were looming. The agency said Talbots had a $185 million asset-based loan, as well as a $350 million term loan, set to mature in October and November, respectively. Talbot’s ability to refinance the debt looked “increasingly dim given its current depressed sales performance,” S&P Global said.
At the end of last year, S&P Global said, Talbots repaid its term loan a year early, as part of a private refinancing transaction. S&P Global stopped following Talbots in December because of the refinancing and a “lack of investor interest.”
Stock prices of Massachusetts-based retailers have plunged since the start of the year. Canton-based Destination XL Group, which makes men’s clothing in big and tall sizes, is down more than 30 percent, Framingham-based TJX Cos., which owns the T.J. Maxx and Marshalls stores, is down 25 percent, and Quincy-based women’s retailer J.Jill is down nearly 15 percent.
Anissa Gardizy can be reached at anissa.gardizy@globe.com. Follow her on Twitter @anissagardizy8 and on Instagram @anissagardizy.journalism.
