912263--4/17/2008--TALBOTS

related topics

{product, market, service}

{stock, price, operating}

{customer, product, revenue}

{debt, indebtedness, cash}

{competitive, industry, competition}

{stock, price, share}

{acquisition, growth, future}

{system, service, information}

{personnel, key, retain}

{operation, natural, condition}

{cost, operation, labor}

The Company expects to purchase a substantial part of its merchandise inventory going forward through open account purchase terms from its vendors, without the use of letter of credit facilities, which in the past have been used for these purchases. The Company s capital resources required to fund its working capital requirements, capital expenditures, debt service and operations are dependent upon cash flows from operations, cash on hand, credit extended from merchandise vendors, and availability under its credit facilities, and these cash resources may be negatively impacted by many factors, some of which are beyond the control of the Company. The successful and timely execution of the Company s strategic plan is critical to the Company s short- term and long- term profitability. The success of the business depends on the Company s ability to respond to constantly changing fashion trends and consumer demands. The Company incurred substantial debt to finance the J. Jill acquisition. The Company s business may not generate significant cash flow to meet these obligations and the debt agreement restrictions may limit the Company s activities. The Company may not be able to maintain proper inventory levels. The retail apparel industry is highly competitive. The Company may not be able to successfully reposition J. Jill s operations. The Company cannot assure that its change in growth strategy will result in improved profitability. Talented personnel are critical to the Company s success. The Company cannot assure that the current management team or the additions to the Company s executive leadership team will result in increased profitability for the Company. The Company experiences fluctuations in comparable store sales results. The Company experiences fluctuations in operating results. If the Company fails to maintain the value of its brands, sales are likely to decline. The Company cannot assure that Internet sales will continue to achieve sales and profitability growth. The Company could be adversely affected if any of its distribution centers are shut down. The Company s overseas merchandise purchasing strategy makes it vulnerable to a number of risks. A major failure of the Company s information systems could harm the business. The Company has experienced significant variability between its expectations and outlook for sales and profitability and its actual results. The market price of the Company s common stock is volatile. Greater level of returns than anticipated could adversely affect the Company s operations. The Company cannot provide assurance that it will continue to pay dividends.

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912263--4/17/2008--TALBOTS_INC