The Talbots, Inc. (TLB) today announced results for the third quarter ended November 1, 2008. In addition, the Company announced it has secured agreements from Mizuho Corporate Bank, Ltd and Sumitomo Mitsui Banking Corporation to convert their existing uncommitted working capital lines to committed working capital lines.

Third quarter net loss from continuing operations was $14.8 million or $0.28 per diluted share compared to last year’s net loss of $0.9 million or $0.02 per share on a comparable basis. The Company results from continuing operations include its core Talbots Misses, Petites, Womans, Collection, and Accessories & Shoes concepts.

Trudy F. Sullivan, President and Chief Executive Officer of The Talbots Inc., commented, “Our third quarter results reflect the impact of the deteriorating macro-economic conditions that started in mid-September. While we have had positive customer response to our reinvigorated Talbots brand merchandise and marketing efforts, this was not enough to offset a steep decline in consumer traffic and spending that we and most others across our entire industry have experienced.

“In the near-term, we continue to tightly control our inventory and significantly cutback discretionary spending, both of which drive further improvements in working capital as we focus on enhancing our cash flow to best manage the business.”

The Company has also announced that with the help of Aeon, its majority shareholder, it has been in negotiations to convert its uncommitted working capital lines to committed working capital lines. After a review of Talbots strategic plan, including the decision to sell the J. Jill brand, Mizuho Corporate Bank, Ltd and Sumitomo Mitsui Banking Corporation have agreed to convert their existing uncommitted $75 million and $50 million working capital lines of credit facility to committed lines, respectively, subject to the completion of due diligence and applicable loan documentation. Similar discussions are currently underway with the other lender banks, who have indicated their support of this direction.

Ms. Sullivan commented, “This is a great step forward for Talbots as it serves to stabilize our liquidity during these most difficult and uncertain times, enabling us to focus on implementing the key strategic initiatives that will drive improved performance of our business.”

Third Quarter Highlights

• Continued emphasis on inventory management results in total inventory down 23% at end of third quarter.
• Improved merchandise operating gross margin of approximately 100 basis points over last year.
• Completed the closing of non-core Talbots Kids/Mens/U.K. businesses.

• Gained positive momentum with each new monthly merchandise delivery throughout the quarter as measured by improving sell through performance. This trend continues into November, particularly with regards to the gift giving assortment.
• Positive consumer response to innovative marketing initiatives during the quarter resulted in healthy reactivation of lapsed customers.
• Company to exclusively focus on core Talbots brand business and pursue sale of J. Jill brand – retains Moelis & Company as financial advisor.

Sales Results

Total sales from continuing operations for the thirteen weeks ended November 1, 2008 were $357 million, versus last year’s sales of $414 million. Retail store sales were $303 million compared to $345 million last year.

Comparable store sales declined 13.9% for the thirteen-week period.

Direct marketing sales for the thirteen-week period were $54 million, including catalog and Internet, compared to $69 million last year. This year-over-year decline was primarily due to a change in catalog circulation strategy. Specifically, the Company shifted the mailing of its key holiday/gift catalog into November this year versus October last year, which is expected to benefit fourth quarter direct sales.

PRELIMINARY RESULTS FROM DISCONTINUED OPERATIONS

Preliminary third quarter loss from discontinued operations was $152.4 million or $2.85 per diluted share, compared to last year’s loss of $8.5 million, or $0.16 per share on a comparable basis. (See Attached Exhibit I).

During the third quarter the Company completed the closing of its Talbots Kids, Mens and UK operations and it made the decision to sell its J. Jill brand. As a result, all of these businesses have been reclassified to discontinued operations for the quarter and all prior periods.

In connection with the decision to pursue the sale of the J. Jill brand business, the Company is in the process of valuing J. Jill’s assets and liabilities and has recorded a preliminary non-cash impairment charge related to the write-down of the J. Jill tangible and intangible assets of approximately $138 million after tax or approximately $2.57 per share. The assets and liabilities are stated at fair value and are included in the balance sheet as assets and liabilities held for sale.

OUTLOOK FOR CONTINUING OPERATIONS

Ms. Sullivan continued, “We expect the environment to remain difficult and volatile for the balance of this year. Therefore, we do not feel it is appropriate to comment on our outlook for fourth quarter and full year 2008 results until we are further into the period.”

“We just completed our first quarter delivering merchandise and creative under the leadership of our new design, product and marketing teams. And we have further sharpened our focus on our core business with our recent decision to pursue the sale of J. Jill. We are making solid steady progress in executing our strategic three-year turnaround plan and remain confident in the steps we are taking to position our Company for near and long term improvement and profitable growth,” concluded Ms. Sullivan.

Additional Disclosures

The Talbots, Inc. is in compliance with the covenants of its acquisition term loan agreement for third quarter fiscal 2008.

Talbots announced its plans to pursue the sale of the J. Jill brand on November 6, 2008. This will enable the Company to focus management resources and capital exclusively on its core Talbots business, which it believes is the right strategic decision to drive long-term increased shareholder value.

The Company does not intend to update its progress or disclose developments with respect to the sale of the J. Jill brand unless or until a definitive transaction is entered into.

Conference Call Details

As previously announced, Talbots will host a conference call today, November 25, 2008 at 10:00 a.m. local time to discuss third quarter 2008 results. To listen to the live call, please dial 866-336-2423, passcode “TLB” or log on to www.thetalbotsinc.com/ir/ir.asp. The call will be archived on its web site www.thetalbotsinc.com for a period of twelve months. In addition, an audio replay of the call will be available shortly after its conclusion and archived until November 28, 2008. This call may be accessed by dialing (800) 642-1687; passcode 74610685.

The Talbots, Inc. is a leading specialty retailer and direct marketer of women’s apparel, shoes and accessories. The Company currently operates stores in 878 locations in 47 states, the District of Columbia, and Canada, with 595 locations under the Talbots brand name and 283 locations under the J. Jill brand name. Both brands target the age 35 plus customer population. Talbots brand on-line shopping site is located at www.talbots.com and the J. Jill brand on-line shopping site is located at www.jjill.com.

The foregoing contains forward-looking information within the meaning of The Private Securities Litigation Reform Act of 1995. These statements may be identified by such forward-looking terminology as "expect," "achieve," "plan," "look," "believe," "anticipate," "outlook," "will," "would," "should," "guidance," or similar statements or variations of such terms. All of the information concerning our financial outlook (including future profitability, future comparable stores sales, future earnings and other future financial performance or operating measures), future credit facilities, future merchandise purchases, future cash needs, and other future financial performance or financial position constitutes forward-looking information.

Our forward-looking statements are based on a series of expectations, assumptions, estimates and projections about our Company, are not guarantees of future results or performance and involve substantial risks and uncertainty, including assumptions and projections concerning our internal plan including our budget for regular-price and markdown selling and operating cash flow for forward periods. All of our forward-looking statements are as of the date of this release only. The Company can give no assurance that such expectations or forward-looking statements will prove to be correct. Actual results may differ materially from our forward-looking statements. The Company does not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections, or other circumstances occurring after the date of this release, even if such results, changes or circumstances make it clear that any forward-looking information will not be realized.

Any public statements or disclosures by us following this release which modify or impact any of the forward-looking statements contained in or accompanying this release will be deemed to modify or supersede such statements in or accompanying this release.

Our forward-looking statements involve substantial known and unknown risks and uncertainties as to future events which may or may not occur, including the following risks: the Company’s decision concerning and the risks and uncertainties associated with the decision to pursue a sale or disposition of the J. Jill brand business including the timing, consideration which may be received or other terms of any such sale or distribution; the impact of the continued significant deterioration in the U.S. economic environment, including continued negative impact on consumer discretionary spending, the disruption and significant tightening in the U.S. credit and lending markets, recessionary pressures, increasing unemployment and fluctuations in energy prices and in the value of the U.S. dollar; significant impact of global financial crisis in the retail/consumer industry including bankruptcies and governmental actions; the success and customer acceptance of our new merchandise offerings including our winter and other seasonal fashions and merchandise offerings; our ability to accurately estimate and forecast future regular-price and markdown selling and operating cash flow; achieving the Company's sales plan for the balance of the year, achieving the Company's operating cash flow plan for the year; successfully executing the Company's strategic initiatives, including supply chain initiatives, anticipated lower inventory levels, expected operating expense and other cost reductions, the success of the new promotional cadence for the Talbots brand, reduced markdown exposure and improved gross margins, the successful closing of underperforming stores; continued ability to purchase merchandise on open account purchase terms at expected levels; obtaining letter of credit facilities for merchandise purchases from vendors who require such facilities; the Company's credit facilities and its ability to have access on satisfactory terms to adequate credit and sources of liquidity necessary to fund its operations and to obtain any necessary increases in its credit facilities as may be needed from time to time; the satisfactory completion of due diligence and loan documentation for conversion of the Mizuho Corporate Bank and Sumitomo Mitsui Banking Corporation working capital facilities to committed facilities; the Company's ability to reduce spending as needed; and the Company's ability to continue to satisfy its financial covenants under its existing debt agreements. In each case, actual results may differ materially from such forward-looking information.

Certain other factors that may cause actual results to differ from such forward-looking statements are included in the Company's periodic reports filed with the Securities and Exchange Commission and available on the Talbots website at www.thetalbotsinc.com under "Investor Relations" and you are urged to carefully consider all such factors.