Exhibit 10.1

     
CONTACT:
  Julie Lorigan
Vice President, Investor Relations
(781) 741-7775
 
   
 
  Margery B. Myers
Vice President,
Corporate Communications and Public Relations
(781) 741-4019
 
   
 
  Stacy Berns/Melissa Jaffin — Investor/Media Relations
Berns Communications Group
(212) 994-4660

TALBOTS ANNOUNCES SECOND QUARTER 2006 SALES RESULTS
-Total Company Comparable Store Sales in Line with Expectations
-Talbots Brand Achieves Strong Sales Trends in June and July
-Company Reconfirms Outlook for Second Quarter
     Hingham, MA, August 3, 2006 — The Talbots, Inc. (NYSE: TLB) today announced
total Company sales for the thirteen weeks ended July 29, 2006 of
$571.4 million. By brand, retail sales were $403.7 million for Talbots compared
to $388.8 million last year, and $73.1 million for J. Jill, which was acquired
effective May 3, 2006. Sales for the J. Jill brand represent approximately 20%
of the total combined company sales volume.
     Total company comparable store sales rose 1.3% for the thirteen-week
period. By brand, comparable store sales for Talbots increased 3.0%. This was
driven by particularly strong selling throughout June and July, which grew a
healthy 6.5% in comp sales for the combined two month period. J. Jill’s
comparable store sales declined 8.2% in the second quarter, below Company
expectations.
     Consolidated direct marketing sales for the thirteen-week period were
$94.6 million, including catalog and Internet. For the Talbots brand, direct
marketing sales for the June and July combined period were also quite strong,
increasing low double digits, while the J. Jill direct business continued to be
difficult.
(continued)

 

--------------------------------------------------------------------------------

 

2
Second Quarter Outlook
     The Company reconfirmed its previously announced outlook for second quarter
loss per diluted share to be in the range of ($0.10) — ($0.08) on a GAAP basis.
This range of loss per share includes acquisition related costs and adjustments
of approximately $0.18 per share.
     Excluding the estimate for costs and adjustments, earnings per diluted
share would be in the range of positive $0.08 to $0.10 per share. Further,
earnings per diluted share excluding approximately $0.03 in stock option expense
for the period would be in the range of positive $0.11 to $0.13 per share for
the combined company, compared to $0.35 reported last year for the Talbots only
brand.
     The Company plans to release its second quarter 2006 operating results on
Wednesday, August 16, 2006 and will provide additional details at that time.
     The Talbots, Inc. is a leading international specialty retailer and
cataloger of women’s, children’s and men’s apparel, shoes and accessories. The
Company currently operates a total of 1,297 stores, in 47 states, the District
of Columbia, Canada and the U.K., with 1,087 stores under the Talbots brand name
and 210 stores 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,” “look,” “believe,”
“anticipate,” “outlook,” “will,” “would,” “would yield,” or similar statements
or variations of such terms. All of the “outlook” information (including future
revenues, future comparable sales, future earnings, future EPS, and other future
financial performance or operating measures) constitutes forward-looking
information.
(continued)

 

--------------------------------------------------------------------------------

 

3
     Our outlook and other forward-looking statements are based on a series of
expectations, assumptions, estimates and projections about our Company which
involve risks and uncertainty, including assumptions and projections concerning
store traffic, levels of store sales including regular-price selling and
markdown selling, and customer preferences. All of our outlook information and
other forward-looking statements are as of the date of this release only. The
Company can give no assurance that such outlook or expectations will prove to be
correct and does not undertake to update or revise any “outlook” information or
any other forward-looking statements to reflect actual results, changes in
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 projected results will not be realized.
     Our forward-looking statements involve substantial known and unknown risks
and uncertainties as to future events which may or may not occur, including the
risk that the J. Jill business will not be successfully integrated, the risk
that the cost savings and other synergies from the transaction may not be fully
realized or may take longer to realize than expected, the risk that the
acquisition will disrupt Talbots or J. Jill’s core business, transaction costs,
the reaction of Talbots and J. Jill customers and suppliers to the transaction,
diversion of management time on merger-related issues, effectiveness of the
Company’s brand awareness and marketing programs, any different or any increased
negative trends in its regular-price or markdown selling, effectiveness and
profitability of new concept, effectiveness of its Internet site, success of our
expected marketing events in driving sales, success of our catalogs in driving
both our direct marketing sales and in driving store traffic, acceptance of the
Company’s fashions including its 2006 seasonal fashions, the Company’s ability
to anticipate and successfully respond to changing customer tastes and
preferences and to produce the appropriate balance of merchandise offerings, the
Company’s ability to sell its merchandise at regular prices as well as its
ability to successfully execute its major sale events including the timing and
levels of markdowns and appropriate balance of available markdown inventory, any
difference between estimated and actual stock option expense, retail economic
conditions including consumer spending, consumer confidence, impact on
discretionary consumer spending of significantly higher gasoline and energy
costs and higher interest rates, and the impact of a continued promotional
retail environment. 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
under “Investor Relations” and you are urged to carefully consider all such
factors.
****************************************************************************
###