<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   ----------

                                    FORM 10-K

(MARK ONE)
[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE 
     ACT OF 1934

FOR THE FISCAL YEAR ENDED January 31, 1998
                          ----------------

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
     EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM _______________ TO _______________


                         COMMISSION FILE NUMBER 1-12552

                                THE TALBOTS, INC.
             ------------------------------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


          Delaware                                              41-1111318
-------------------------------                             -------------------
(STATE OR OTHER JURISDICTION OF                              (I.R.S. EMPLOYER 
 INCORPORATION OR ORGANIZATION)                             IDENTIFICATION NO.)


175 Beal Street, Hingham, Massachusetts                           02043
----------------------------------------                        ----------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                        (ZIP CODE)


REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (781)749-7600
                                                   -------------

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

      TITLE OF EACH CLASS            NAME OF EACH EXCHANGE ON WHICH REGISTERED
      -------------------            -----------------------------------------
         Common Stock                            New York Stock Exchange
         $0.01 Par Value

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:  None.

INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS TO BE
FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE
PRECEDING 12 MONTHS AND (2) HAS BEEN SUBJECT TO THE FILING REQUIREMENTS FOR THE
PAST 90 DAYS. YES [X]  NO [ ]

INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405
OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS
FORM 10-K. [ ]

THE APPROXIMATE AGGREGATE MARKET VALUE OF THE REGISTRANT'S COMMON STOCK HELD BY
NON-AFFILIATES (FOR THIS PURPOSE, DEEMED TO REFER TO ALL PERSONS AND ENTITIES
OTHER THAN EXECUTIVE OFFICERS, DIRECTORS AND 10% OR MORE SHAREHOLDERS) BASED ON
THE CLOSING SALE PRICE ON THE NEW YORK STOCK EXCHANGE COMPOSITE TAPE ON APRIL 2,
1998 WAS APPROXIMATELY $221.8 MILLION.

NUMBER OF SHARES OUTSTANDING OF THE REGISTRANT'S COMMON STOCK AS OF APRIL 2,
1998: 31,805,415

                      DOCUMENTS INCORPORATED BY REFERENCE:

PORTIONS OF THE REGISTRANT'S ANNUAL REPORT TO SHAREHOLDERS FOR THE FISCAL YEAR
ENDED JANUARY 31, 1998 ARE INCORPORATED BY REFERENCE INTO PART II, AND PORTIONS
OF THE REGISTRANT'S PROXY STATEMENT FOR THE 1998 ANNUAL MEETING OF SHAREHOLDERS
ARE INCORPORATED BY REFERENCE INTO PART III.





<PAGE>   2


                                     PART I


ITEM 1. BUSINESS.

GENERAL

         The Talbots, Inc., a Delaware corporation (together with its wholly
owned subsidiaries, "Talbots" or the "Company"), is a leading national specialty
retailer and cataloger of women's and children's classic apparel, accessories
and shoes. Over the past nine years, the Company has implemented an aggressive
store expansion program, with the number of stores increasing from 137 at the
end of 1988 to 603 at the end of 1997. During 1997, Talbots issued 25 separate
catalogs with a combined circulation of approximately 52.0 million. Total net
sales were approximately $1,053.8 million in 1997, of which retail store sales
were approximately $894.6 million and catalog sales were approximately $159.2
million.

         Talbots complies with the National Retail Federation's fiscal calendar.
Where a reference is made in this Part I to a particular year or years, it is a
reference to Talbots 52-week or 53-week fiscal year. For example, "1997" refers
to the 52-week fiscal year ended January 31, 1998, "1996" refers to the 52-week
fiscal year ended February 1, 1997. The last 53-week fiscal year was 1995,
ending February 3, 1996; the next 53-week fiscal year will be fiscal 2000,
ending February 3, 2001.

         Talbots stores and catalogs offer a distinctive collection of classic
sportswear, casual wear, dresses, coats, sweaters, accessories and shoes,
consisting primarily of Talbots own private label merchandise in misses and
petites sizes. Talbots Kids & Babies stores and catalogs offer an assortment of
high quality classic clothing and accessories for infants, toddlers, boys and
girls. Talbots merchandising strategy focuses on achieving a "classic look",
which emphasizes timeless styles. Talbots stores and catalogs offer a variety of
key basic and fashion items and a complementary assortment of accessories and
shoes which enable customers to assemble complete wardrobes. The consistency in
color, fabric and fit of Talbots merchandise allows a customer to create
wardrobes across seasons and years. The Company believes that a majority of its
customers are college-educated and employed, primarily in professional and
managerial occupations, and are attracted to Talbots by its focused
merchandising strategy, personalized customer service and continual flow of high
quality, reasonably priced classic merchandise.

         Talbots has established a market niche as a brand in women's classic
apparel, accessories and shoes. In 1997, approximately 98% of the Company's
merchandise consisted of styles that were sold exclusively under the Talbots
label. Most of this merchandise is manufactured to the specifications of the
Company's technical designers and product developers, enabling Talbots to offer
consistently high quality merchandise that the Company believes differentiates
Talbots from its competitors.


                                        2


<PAGE>   3


         The Company operates its stores and catalogs as an integrated business
and provides the same personalized service to its customers regardless of
whether merchandise is purchased through its stores or catalogs. The Company
believes that the synergy between Talbots stores and catalogs offers an
important convenience to its customers and a competitive advantage to the
Company in identifying new store sites and testing new business concepts.

         The first Talbots store was opened in 1947 in Hingham, Massachusetts by
Rudolph and Nancy Talbot. The first Talbots catalog was issued the following
year with a circulation of approximately 3,000. Additional stores were opened
beginning in 1955, and there was a total of five Talbots stores by 1973, at
which time the Company was acquired by General Mills, Inc. Talbots continued to
expand and grew to 126 stores by June 1988. In June 1988, JUSCO (U.S.A.), Inc.
("JUSCO USA"), a Delaware corporation, acquired Talbots (the "Acquisition").
JUSCO USA is a wholly owned subsidiary of JUSCO Co., Ltd. ("JUSCO"), a Japanese
corporation. On November 18, 1993, the Company effected an initial public
offering of its common stock (the "Offering"), issuing approximately 12.6
million shares of common stock. Subsequent to the Offering, JUSCO USA continues
to own approximately 63.4% of the outstanding common stock of the Company.

         The Company grew significantly after the Acquisition by adding stores
and developing new complementary business concepts that capitalize on the
strength of the Talbots name and its loyal customer base. By January 31, 1998,
the number of stores increased to 603, in 44 states, the District of Columbia,
Canada and the United Kingdom. This number included 374 Talbots Misses stores
(including 19 Misses stores in Canada and five Misses stores in the United
Kingdom), 125 Talbots Petites stores (including one Petites store in Canada), 32
Talbots Accessories & Shoes stores, 60 Talbots Kids stores (40 of which include
a Talbots Babies assortment) and 12 Talbots Outlet stores. Of the Company's
$894.6 million in total retail store sales for fiscal 1997, Talbots Misses
stores accounted for $650.6 million; Talbots Petites, $125.0 million; Talbots
Accessories & Shoes, $16.6 million; and Talbots Kids and Babies, $51.2 million.
The remaining $51.2 million was generated from Talbots Outlet stores.

         Talbots catalog business also has undergone changes. The circulation of
catalogs has been reduced by 33% from 78.1 million catalogs in 1989 to 52.0
million catalogs in 1997. This circulation reduction has been an integral part
of a strategy to better focus the distribution of catalogs to proven customers.

STRATEGY

         The key elements of the Company's strategy are to: (1) maintain its
strong competitive position in the classics niche by providing consistently
classic women's and children's apparel and accessories and shoes, (2) continue
to operate as a predominantly private label retailer, (3) maintain its posture
as a limited promotion retailer, (4) continue to capitalize on its complementary
store and catalog operations, (5) continue to provide superior customer service
and (6) maintain a broad mix of store locations.



                                        3


<PAGE>   4


         MARKET NICHE IN CLASSIC APPAREL. Talbots stores and catalogs offer a
distinctive collection of sportswear, casual wear, dresses, coats, sweaters,
accessories and shoes, consisting primarily of the Company's own private label
merchandise in misses and petites sizes. Talbots offers a variety of key basic
and fashion items and a complementary assortment of accessories and shoes to
enable customers to assemble complete outfits. An important aspect of the
Company's marketing strategy is wardrobing the customer from "head-to-toe." The
Company believes that consistently emphasizing timeless styles helps to create a
loyal customer base and reduces the risk that its apparel, shoes and accessories
will be affected by sudden changes in fashion trends.

         TALBOTS PRIVATE LABEL. The clothing assortment under the Talbots
private label was approximately 98% in 1997. Sales of private label merchandise
generally provide the Company with a higher gross margin than it believes would
be obtained on other merchandise and establishes Talbots identity as a brand of
women's classic apparel.

         The Company believes that the quality and value of its classic
merchandise are key competitive factors. Most of Talbots merchandise is
manufactured to the specifications of the Company's technical designers and
product developers, enabling Talbots to offer consistently high quality
merchandise that the Company believes differentiates Talbots from its
competitors. The Company continually monitors the production of its domestic and
overseas manufacturers to ensure that all apparel is of consistent fit and high
quality.

         LIMITED PROMOTION RETAILER. The Company positions itself as a limited
promotion retailer. Talbots typically holds only four sale events a year in its
women's apparel stores, consisting of two end-of-season clearance sales and two
mid-season sales. Talbots Kids & Babies stores currently hold six sale events,
consisting of four in-season sales and two end-of-season clearance sales. All
mid-season and end-of-season store sale events are held in conjunction with
catalog sales events. No other major promotional sale events are typically held.
The Company believes that its strategy of limiting its promotional events has
reinforced the integrity of its regular prices.

         COMPLEMENTARY STORE AND CATALOG OPERATIONS. The Company's strategy is
to operate its stores and catalogs as an integrated business and to provide the
same personalized service to its customers regardless of whether merchandise is
purchased through its stores or catalogs. The Company believes that the synergy
between Talbots stores and catalogs offers an important convenience to its
customers, provides a competitive advantage to the Company and is an important
element in identifying new store sites.

         Talbots catalogs provide customers with a broader selection of
merchandise, sizes and colors than its stores. In each of its United States
stores, Talbots offers a "Red Line" phone which connects the store customer
directly to a catalog telemarketing sales associate. This service can be used by
store customers to order a particular size or color of an item that is a
catalog-only item or that is sold out in the store. A reduced shipping and
handling charge is provided to customers who use the "Red Line" phone service.
In addition to providing customers the convenience of ordering Talbots
merchandise, the Company generally uses its catalogs to communicate its classic



                                        4


<PAGE>   5


image, to provide customers with fashion guidance in coordinating outfits and to
generate store traffic. Catalog merchandise can be easily returned or exchanged
at any Talbots store or returned to the Company by mail.

         The Company believes that its catalog operations provide Talbots with a
competitive advantage. The customer database compiled through Talbots catalog
operations provides important demographic information and serves as an integral
part of the Company's expansion strategy by helping to identify markets with the
potential to support a new store. Although the addition of stores in areas where
the catalog has been successful has resulted in slightly lower catalog sales in
such areas, such lower catalog sales have been more than offset by the
significantly higher sales generated in these areas by the opening of new
stores.

         CUSTOMER SERVICE. The Company believes that it provides store and
catalog customers an extraordinarily high level of customer service. The Company
is committed to constantly improving customer service by enhancing its training
programs to ensure that sales associates are knowledgeable about all Talbots
merchandise, that they are up to date with fashion trends and that they are able
to make appropriate wardrobing suggestions to customers.

         BROAD MIX OF STORE LOCATIONS. The Company believes that providing a
broad mix of store locations helps insulate it from changes in customer shopping
patterns and allows it to offer locations that are convenient and consistent
with its image. As of January 31, 1998, the Company had 42% of its stores in
malls, 34% in specialty centers, 13% in village locations, 7% as freestanding
stores and 4% in urban locations.

MERCHANDISING

         The Company's merchandising strategy focuses on achieving a "classic
look," which emphasizes timeless styles. Talbots stores and catalogs offer a
distinctive collection of classic sportswear, casual wear, dresses, coats,
sweaters, accessories and shoes, consisting primarily of private label
merchandise made exclusively for Talbots in misses and petites sizes. Talbots
stores and catalogs offer a variety of key basic and fashion items and a
complementary assortment of accessories and shoes which enable customers to
assemble complete outfits. Sales associates are trained to assist customers in
merchandise selection and wardrobe coordination, helping them achieve the
Talbots look from "head-to-toe". The consistency in color, fabric and fit of
Talbots merchandise also allows a customer to create wardrobes across seasons
and years.

         PRIVATE LABEL MERCHANDISE DESIGN AND PURCHASING. Talbots private label
merchandise is designed through the coordinated efforts of the Company's
merchandising and manufacturing team, which consists of the New York-based
Talbots product development office, the technical testing and design staff, the
buying staff, the production planning staff and a Hong Kong-based product
sourcing office. Styles for Talbots private label merchandise are developed
based upon prior years' sales history and current fashion trends for each of the
Company's two main seasons, spring and fall.



                                        5


<PAGE>   6



         The New York-based Talbots merchandise development office oversees the
conceptualization of Talbots product. This initial product determination
concerns styling, color, and fabrication recommendations. The development
process begins approximately nine months before the expected in-house delivery
date of the merchandise.

         The Company's Hingham-based buying staff is responsible for the
quantification of specific merchandise and departmental needs and plans. These
plans are used to place specific item orders on styles developed in conjunction
with the product development office and with the various merchandise vendors.

         In conjunction with the merchandise developed by the product managers
and the buying organization, the Company's Hingham-based technical testing and
design staff works to determine the technical specifications of all
private-label merchandise. In addition to preparing the initial specifications,
this group also reviews the first fit sample and, together with the product
manager, the pre-production samples of each item to ensure that specifications
and quality standards are met.

         SOURCING. In 1997, Talbots purchased approximately 50% of its
merchandise directly from off-shore vendors, and the remaining 50% through
domestic-based vendors. During the year, the Company's Hong Kong office
accounted for approximately 67% of Talbots total direct off-shore sourcing, with
the remaining 33% being handled through various agents.

         Approximately 34% of Talbots merchandise is currently sourced through
Hong Kong. Sovereignty over Hong Kong was transferred effective July 1, 1997
from the United Kingdom to the People's Republic of China. The agreement
provides that the social and economic systems in Hong Kong will remain a matter
of the people of Hong Kong's choice for 50 years after June 30, 1997. The
Company has not experienced any material difficulties as a result of this
transfer of power.

         In order to diversify the Company's Far East sourcing operations,
additional overseas sourcing offices have been established in Jakarta, Indonesia
and Bangkok, Thailand. Under the terms of an agreement between the Company and
Eralda Industries ("Eralda"), a long time supplier of the Company, Eralda will
serve as the Company's exclusive agent and has established these offices to
serve the Company in this capacity.

         In addition to the Company's office in Hong Kong, which deals with
local manufacturers, and the sourcing arrangement with Eralda, Talbots utilizes
agents in Japan, Korea, Singapore, Israel, Italy, Portugal and Turkey plus
domestic resources to source its merchandise. The Company analyzes its overall
distribution of manufacturing to assure that no one company or country is
responsible for a disproportionate amount of Talbots merchandise. Directly
sourced merchandise is currently manufactured to its specifications by
independent foreign factories located primarily in Hong Kong, other Asian
countries such as Macao, China, Thailand, Korea and Indonesia, and Europe.



                                        6


<PAGE>   7


         The Company's domestic vendors include those who either manufacture
their own merchandise or supply merchandise manufactured by others, as well as
vendors that are both manufacturers and suppliers. In 1997, certain divisions of
The Kellwood Company accounted for an aggregate of approximately 6% of the total
merchandise purchased by Talbots. Most of Talbots Hong Kong and other foreign
vendors manufacture their own merchandise. The Company believes that, consistent
with the retail apparel industry as a whole, many of its domestic vendors import
a portion of their merchandise from abroad.

         The Company typically transacts business on an order-by-order basis and
does not maintain any long-term or exclusive commitments or arrangements to
purchase from any vendor. The Company believes that it has good relationships
with its vendors and that, as the number of Talbots stores increases, there will
be adequate sources to produce a sufficient supply of quality goods in a timely
manner and on satisfactory economic terms. The Company does business with most
of its vendors in United States currency and has not experienced any material
difficulties as a result of any foreign political, economic or social
instabilities.

EXPANSION

         An important aspect of the Company's business strategy has been an
expansion program designed to reach new and existing customers through the
opening of new stores. The Company has grown significantly over the past ten
years, with the number of stores increasing from 109 at the end of 1987 to 603
at the end of 1997. During that time, store net sales increased from
approximately $205.0 million in 1987 to approximately $894.6 million in 1997.
From the end of 1996 to the end of 1997, the number of Talbots stores increased
from 535 to 603.

         In addition to expanding its core Misses business, the Company has
introduced complementary new business concepts, Talbots Petites, Talbots Kids &
Babies and Talbots Accessories & Shoes.

         In 1984, Talbots began offering merchandise in petites sizes in its
catalogs, and in 1985, the Company opened its first Talbots Petites store.
During 1989, Talbots stores began to carry a selection of Talbots Petites
merchandise, and the Company opened three additional Talbots Petites stores in
1990 as the beginning of its strategy to expand Talbots Petites business. At
January 31, 1998, 125 Talbots Petites stores were open, and virtually every item
of women's apparel in the catalog was offered in both misses and petites sizes.

         In 1989, the Company presented Talbots Kids merchandise in a separate
catalog dedicated to apparel for boys and girls. The first Talbots Kids store
opened in 1990. During 1995, Talbots expanded the Talbots Kids merchandise by
offering an assortment for infants and toddlers, Talbots Babies. By the end of
1997, 60 Talbots Kids stores were open, 40 of which included a Babies
assortment. The Company will continue to position Talbots Kids & Babies as a
brand that offers a complete assortment of high quality classic children's
clothing and accessories.




                                        7


<PAGE>   8


         In 1991, the Company introduced Talbots Intimates, an assortment of
classic sleepware, loungewear and daywear. The Company currently operates
Intimates collections in 48 Misses stores.

         During 1994, Talbots introduced Talbots Accessories and Shoes in two
catalogs devoted to the category. A limited collection of the merchandise
continues to be offered in each Misses catalog and in selected stores. The
Company opened five Talbots Accessories and Shoes stores in September 1995 and
at the end of 1997 it operated 32 stores.

         The Company currently anticipates opening approximately 35 new stores
(including Misses, Petites, Accessories & Shoes and Outlet stores) in 1998.* The
Company's ability to continue to expand will be dependent upon general economic
and business conditions affecting consumer confidence and spending, the
availability of desirable locations and the ability to negotiate acceptable
lease terms for new locations. The ability of the Company to open additional
stores (and the mix of such openings) will be dependent upon similar factors as
well as the performance of Talbots existing stores at such locations and the
availability of suitable space. The Company will also consider opening such
stores in established Talbots markets where a Misses store is not located,
thereby broadening the growth potential for each concept.

STORES

         Misses stores generally range in size from 3,500 to 6,500 gross square
feet, with a typical store averaging approximately 5,000 gross square feet.
Talbots Petites stores generally measure 2,500 gross square feet, and Talbots
Kids & Babies stores measure approximately 3,100 gross square feet. Talbots
Accessories & Shoes stores generally measure 1,900 gross square feet. Flagship
stores are Misses stores which are utilized to generate greater awareness of
Talbots merchandise in major metropolitan locations, including Boston, New York
City, Washington D.C., Chicago, San Francisco and Toronto, and generally are
larger than the average Misses store. Approximately 75% of the floor area of all
Talbots stores is devoted to selling space (including fitting rooms), with the
balance allocated to stockroom and other non-selling space.

         In certain markets, the Company has created Talbots "superstores" by
placing two or more other Talbots concepts in close proximity to a Misses store.
Together, these stores feature at least three of Talbots business
concepts--Misses, Petites, Kids & Babies and/or Accessories & Shoes--in order to
create a one-stop shopping environment. At January 31, 1998, the Company
operated 59 "superstores."

         The Company utilizes Talbots Outlet stores, which are separate from its
retail stores, to provide for the controlled and effective clearance of store
and catalog merchandise remaining from each sale event. The Company uses Talbots
Outlet stores only for the sale of past season and "as is" merchandise. The
Company does not purchase merchandise specifically for Talbots Outlet stores.
Merchandise in Talbots Outlet stores is sold at significant markdowns from
original retail prices. At January 31, 1998, the Company operated 12 Talbots
Outlet stores.



                                        8


<PAGE>   9


         Talbots stores are distinguished by a signature red door created for
each of the business concepts. Each interior is designed to have a gracious and
comfortable residential feel. This interior design theme is consistently used in
all Talbots Misses and Talbots Petites stores to promote familiarity, ease of
shopping and cost savings in the design and construction of new stores. Talbots
Kids & Babies, and Talbots Accessories & Shoes also have their respective
signature red doors and interior design themes. Talbots Kids & Babies stores are
designed to create a light atmosphere and Talbots Accessories & Shoes are
designed to reflect the atmosphere of a traditional carriage house. Management
provides guidelines for merchandise display to the stores throughout the year.

TALBOTS CATALOG

         Since 1948, the Company has used its catalog to offer customers
convenience in ordering Talbots merchandise. In 1997, the Company distributed 25
separate catalogs with a combined circulation of approximately 52.0 million,
including catalogs sent to stores for display and general distribution. During
1997, catalog sales represented approximately 15.1% of total Company sales.
Catalog circulation has included: base catalogs offering the broadest assortment
of Talbots merchandise; specialty catalogs such as the Classics That Work series
featuring career clothing; Talbots Kids & Babies catalogs; Talbots Accessories &
Shoes catalogs; and sale catalogs. In addition to providing customers
convenience in ordering Talbots merchandise, the Company generally uses its
catalogs to communicate its classic image, to provide customers with fashion
guidance in coordinating outfits and to generate store traffic. During 1997, the
Company discontinued its international catalogs. In conjunction with the
Company's store strategy to incorporate intimate apparel into its Misses and
Petites assortment, the Company added more intimate apparel pages to its base
catalogs, and discontinued the distribution of separate catalogs dedicated to
intimate apparel.

         The Company utilizes computer applications which employ mathematical
models to improve the efficiency of its catalog mailings through refinement of
its customer list. A principal factor in improving customer response has been
the Company's development of its own list of active customers. The Company
routinely updates and refines this list prior to individual catalog mailings by
monitoring customer interest as reflected in criteria such as the frequency and
dollar amount of purchases as well as the last date of purchase.

         The Company attempts to make catalog shopping as convenient as
possible. It maintains a toll-free number, accessible 24 hours a day, seven days
a week (except Christmas Day), to accept requests for catalogs and to take
customer orders. It maintains telemarketing centers in Knoxville, Tennessee and
Hingham, Massachusetts which, linked by computer and telephone, are designed to
provide uninterrupted service to customers. Telephone calls are answered by
knowledgeable sales associates located at the telemarketing centers who utilize
on-line computer terminals to enter customer orders and to retrieve information
about merchandise and its availability. These sales associates also suggest and
help to select merchandise and can provide detailed information regarding size,
color, fit and other merchandise features. In both the



                                        9


<PAGE>   10


Hingham and Knoxville telemarketing centers, sales associates are able to refer
to current catalog items in a sample store, thereby allowing them to view
merchandise as they assist customers.

         The Company employs advanced technology to process orders. Sales
associates enter orders on-line into a computerized inventory control system
which systematically updates Talbots customer list and permits the Company to
measure the response to individual merchandise and catalog mailings. Sales and
inventory information is available to the Company's Hingham-based buying staff
the next day. The Company has achieved efficiencies in order entry and
fulfillment which permit the shipment of most orders the following day.

INVENTORY CONTROL AND MERCHANDISE DISTRIBUTION

         The Company uses a centralized distribution system, under which all
merchandise is received, processed and distributed through its catalog and store
distribution center in Lakeville, Massachusetts. Merchandise received at the
distribution center is promptly inspected, assigned to individual stores, packed
for delivery and shipped to the stores. Talbots ships merchandise to its stores
virtually every business day, with each store generally receiving merchandise
twice a week. The Company believes that its strong store and catalog synergy
coupled with its central distribution system allows it to move merchandise
between the stores and catalog to better take advantage of sales trends.

         In June, 1995, the Company completed a $7.0 million expansion of its
distribution center in Lakeville, Massachusetts, by adding an additional 124,260
square feet to support its expansion plans. Additional mezzanine level space was
added in 1996 and 1997 to further support the Company's growth. Plans are
currently under way to expand its Hingham corporate offices and its Lakeville
distribution center. The Company currently anticipates that the Lakeville
expansion, which is not expected to be completed before 1999, will total
approximately 100,000 square feet.

MANAGEMENT INFORMATION SYSTEMS

         Talbots management information systems and electronic data processing
systems are located at the Company's Systems Center in Tampa, Florida. These
systems consist of a full range of retail, financial and merchandising systems,
including credit, inventory distribution and control, sales reporting, accounts
payable, merchandise reporting and distribution.

         All Talbots stores have point-of-sale terminals that transmit
information daily on sales by item, color and size. Talbots stores are equipped
with bar code scanning programs for the recording of store inventories, price
changes, receipts and transfers. The Company evaluates this information,
together with weekly reports on merchandise statistics, prior to making
merchandising decisions regarding reorders of fast-selling items and the
allocation of merchandise.




                                       10


<PAGE>   11


         Also, sales associates can locate merchandise no longer available in
their store at any Talbots location with a single phone call, 24 hours a day,
seven days a week (except Christmas day).

SEASONALITY

         Historically, catalog sales had been higher during the first and third
quarters due to the timing of catalog circulation and the placement of customer
orders early in the season. However, as shopping patterns have changed and
customers are buying closer to time of need, the difference in catalog sales
between the third and fourth quarters has diminished. Retail store sales
typically peak in the fourth quarter due to the holiday season and the impact of
new stores opened during the year. From a total Company perspective, the highest
sales are in the fourth quarter.

COMPETITION

         The women's retail apparel industry is highly competitive. The Company
believes that the principal bases upon which it competes are quality, value and
service in offering classic apparel to build "head-to-toe" wardrobes through
both stores and catalogs.

         Talbots competes with certain departments of national specialty
department stores such as Lord & Taylor, Saks Fifth Avenue and Nordstrom as well
as strong regional department store chains such as Macy's, Marshall Field and
Dillard's. The Company believes that it competes with these department stores by
offering a focused merchandise selection, personalized service and convenience.
Talbots also competes with other specialty retailers such as The Limited, Ann
Taylor, Eddie Bauer and The Gap, and with catalog companies such as L.L. Bean,
Lands' End and Spiegel. The Company believes that its focused merchandise
selection in classic apparel, consistent private label merchandise, superior
customer service, store site selection resulting from the synergy between its
stores and catalog operations, and the availability of its merchandise in
extended misses sizes and petites sizes, distinguish it from other specialty
retailers.

EMPLOYEES

         At January 31, 1998, Talbots had approximately 8,300 employees, of whom
approximately 2,100 were full-time salaried employees, approximately 1,200 were
full-time hourly employees and approximately 5,000 were part-time hourly
employees. The Company believes that its relationship with its employees is
good.

SUBSEQUENT EVENT

         In April 1998, the Company obtained additional long-term financing to
increase from $50 million to $100 million its revolving credit agreements.




                                       11


<PAGE>   12


EXECUTIVE AND OTHER OFFICERS OF THE COMPANY

         The following table sets forth certain information regarding the
executive and other officers of the Company as of April 15, 1998:

Name                         Age   Position
----                         ---   --------

Arnold B. Zetcher            57    President and Chief Executive Officer
Mark Shulman                 49    Executive Vice President, Chief Operating 
                                     Officer and Chief Merchandising Officer
J. Bruce Ash                 49    Senior Vice President, Management Information
                                     Systems
Harold Bosworth              49    Senior Vice President, General Manager,
                                     Talbots Kids
Paul V. Kastner              46    Senior Vice President, International and 
                                     Strategic Planning
Edward L. Larsen             53    Senior Vice President, Finance, Chief 
                                     Financial Officer and Treasurer
Michele M. Mandell           50    Senior Vice President, Stores
Richard T. O'Connell, Jr.    47    Senior Vice President, Legal and Real Estate,
                                     and Secretary
Mary R. Pasciucco            44    Senior Vice President, Catalog Development 
                                     and Advertising
Bruce C. Soderholm           55    Senior Vice President, Operations
Stuart M. Stolper            58    Senior Vice President, Human Resources
Sandy F. Katz                50    Vice President, Audit and Control
Judy O'Keefe                 54    Vice President, Merchandise Administration
Bruce Lee Prescott           42    Vice President, Customer Service and 
                                     Telemarketing
Deborah Martin               48    Vice President, Product Development
Lucy Main Tweet              45    Vice President, Manufacturing
John L. Florio               42    Director of Legal Services and Assistant 
                                     Secretary


         Mr. Zetcher joined Talbots as President in 1987. He has been President
and Chief Executive Officer and a member of the Board of Directors since 1988.
Mr. Zetcher was Chairman and Chief Executive Officer of John Breuner Company, a
home furnishings division of BATUS in San Francisco, California, and prior to
that, Chairman and Chief Executive Officer of Kohl's Food Stores, another BATUS
division, in Wisconsin and Illinois. Mr. Zetcher also served as Chairman and
Chief Executive Officer of Bonwit Teller in New York, a high quality specialty
apparel chain, and served in various capacities during his ten years with
Federated Department Stores.

         Mr. Shulman joined the Company in October 1997 as Executive Vice
President, Chief Operating Officer and Chief Merchandising Officer and was
elected a Director of the Company. Mr. Shulman formerly was President and Chief
Executive Officer of Younkers Department Stores, a division of Proffitt's, Inc.,
was Executive Vice President of Stage Stores, Inc. from 1994 to 1997 and was
President of the Leslie Fay Dress Division from 1993 to 1994. Mr. Shulman also



                                       12


<PAGE>   13


previously served as President and Chief Executive Officer of Henri Bendel, Inc.
and as President and Chief Executive Officer of Ann Taylor Stores.

         Mr. Ash has been Senior Vice President, MIS since 1988. He joined
Talbots in 1988 as Vice President, MIS. Prior to that time, he was Vice
President, MIS at Filene's Department Stores in Boston.

         Mr. Kastner joined Talbots in 1988 as Director, Business Planning and
Analysis and became Vice President, New Business Ventures and Strategic
Planning, Assistant Treasurer and Assistant Secretary in 1989. In 1994, Mr.
Kastner was promoted to the position of Senior Vice President, International and
Strategic Planning. Prior to joining Talbots, he was Director of Research and
Merchandise Information with John Breuner Company in California.

         Mr. Bosworth joined the Company in June 1997 as Senior Vice President
and General Manager for Talbots Kids. From 1988 to 1997, Mr. Bosworth served as
Senior Vice President, Retail, of Ermengildo Zegna; and Senior Vice President
and General Merchandise Manager at the I. Magnin/Bullick's Wilshire division of
R.H. Macy, where he was responsible for numerous merchandising areas, including
children's. He also served in various capacities from 1972 to 1988 at J.W.
Robinson's, a division of Associated Dry Goods; The Broadway, a division of
Carter Hawley Hale; and Jordan Marsh, a division of Allied Stores.

         Mr. Larsen became Senior Vice President, Finance, Chief Financial
Officer and Treasurer of Talbots in 1991. From 1989 to 1991, Mr. Larsen was Vice
President and Chief Financial Officer of Lillian Vernon Corporation. From 1977
to 1988, he held various positions with General Mills, Inc., including from 1985
to 1988 the position of Vice President and Group Controller of the Specialty
Retailing Group at General Mills, Inc.

         Ms. Mandell has been Senior Vice President, Stores since 1992. She
joined Talbots in 1983 as Store Manager, became District Manager in 1984 and
served as Regional Director from 1985 until 1992. From 1971 to 1983 she held
management and buying positions for Price's of Oakland in Pittsburgh,
Pennsylvania and A.E. Troutman Co. in Indiana, Pennsylvania.

         Mr. O'Connell joined Talbots in 1988 as Vice President, Legal and Real
Estate and Secretary, and became Senior Vice President, Legal and Real Estate
and Secretary in 1989. Prior to joining Talbots, he served as Vice President,
Group Counsel of the Specialty Retailing Group at General Mills, Inc.

         Ms. Pasciucco has been Senior Vice President, Catalog Development and
Advertising since 1989. From 1985 until 1989, she served as Vice President,
Catalog Development, and from 1982 until 1985, she served as Director, Catalog
Development.

         Mr. Soderholm has been Senior Vice President, Operations since 1989. He
joined Talbots in 1976 as Director of Operations and served as Vice President,
Operations from 1980 to 1989.



                                       13


<PAGE>   14


         Mr. Stolper joined Talbots in 1989 as Vice President, Human Resources
and assumed the position of Senior Vice President, Human Resources and Assistant
Secretary later that year. From 1988 to 1989, he served as Vice President,
Administration at JUSCO USA. Prior to that time, he was Vice President, Human
Resources of the Specialty Retailing Group at General Mills, Inc.

         Mr. Katz joined Talbots in 1989 as Vice President, Audit and Control.
From 1988 to 1989, Mr. Katz was President of SFK & Associates, a consulting
firm, and from 1984 to 1988, he was Director, Loss Prevention of the Specialty
Retailing Group at General Mills, Inc.

         Ms. O'Keefe joined Talbots in 1989 as Director, Merchandise
Administration. In 1994, she was promoted to the position of Vice President,
Merchandise Administration. Prior to joining Talbots, Ms. O'Keefe held various
merchandising positions at Dayton Hudson Department Store where she was employed
for nearly 20 years.

         Mr. Prescott joined Talbots in 1987 as Manager, Direct Marketing
Fulfillment. In 1988, he was promoted to the position of Director of Marketing
Fulfillment and in 1991 became Director, Customer Service and Telemarketing. In
1994, he was promoted to the position of Vice President, Customer Service and
Telemarketing. From 1976 to 1987, he was employed by Johnny Appleseed's serving
as manager of catalog operations and supervising retail distribution and
customer service.

         Ms. Main Tweet joined Talbots in 1993 as Vice President, Manufacturing.
From 1991 to 1993, Ms. Main Tweet was Vice President, Sourcing for Crystal
Brands Women's Wear Group. From 1990 to 1991, Ms. Main Tweet was Director,
Production for J. Crew, Inc., and from 1988 to 1990 she was Vice President,
Production for Bernard Chaus, Inc.

         Ms. Martin joined Talbots in April 1998 as Vice President, Product
Development. From 1992 to 1997 Ms. Martin was Senior Vice President,
Ready-To-Wear Product Development, for Macy's Product Development Office. She
has also held various positions at specialty retailers Henri Bendel, Bergdorf
Goodman, and Barney's from 1971 to 1992.

         Mr. Florio joined Talbots in 1990 as Director of Legal Services and
Assistant Secretary. From 1985 to 1990, he was Counsel for Corporate Property
Investors, a New York-based nationwide commercial real estate investment and
development firm.



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

*This Annual Report on Form 10-K contains forward-looking information within the
meaning of The Private Securities Litigation Reform Act of 1995. The statements
may be identified by an "asterisk" ("*") or such forward-looking terminology as
"expect", "look", "believe", "anticipate", "may", "will" or similar statements
or variations of such terms. Such forward-looking statements involve certain
risks and uncertainties including levels of sales, effectiveness of the
Company's brand awareness and marketing programs, store traffic, acceptance of
Talbots fashion and expansion plans, appropriate balance of merchandise
offerings and responsiveness of the Company's core customers, and timing and
levels of markdowns, and, in each case, actual results may differ materially
from such forward-looking information.


                                       14


<PAGE>   15


Certain other factors that may cause actual results to differ from such
forward-looking statements are set forth in this Annual Report on Form 10-K or
are included in the Company's Current Report on Form 8-K dated October 30, 1996
filed with the Securities and Exchange Commission (a copy of which may also be
obtained from the Company at 781-741-4500) as well as other periodic reports
filed by the Company with the Securities and Exchange Commission and you are
urged to consider such factors. The Company assumes no obligation for updating
any such forward-looking statements.



                                       15


<PAGE>   16


ITEM 2. PROPERTIES.

         The table below presents certain information relating to the Company's
properties at January 31, 1998:

<TABLE>
<CAPTION>

    Location                 Gross Square Feet    Primary Function              Interest
    --------                 -----------------    ----------------              --------

<S>                               <C>           <C>                           <C>       
Hingham, Massachusetts            214,000       Company headquarters          Own (42 acres)
Lakeville, Massachusetts          764,745       Distribution center           Own (85 acres)
Knoxville, Tennessee               23,595       Telemarketing                 Lease
Tampa, Florida                     29,250       Systems center                Lease
New York, New York                 20,500       Product development office    Lease
Hong Kong                          10,455       Merchandising and sourcing    Lease
Ontario, Canada                     1,119       Canadian regional office      Lease
London, U.K.                        1,093       U.K. management office        Lease

Stores throughout the U.S.,
   Canada and U.K.                              Retail stores                 Own and lease(a)

</TABLE>

----------
(a)   Talbots owns the property for eight of its 603 stores.


         Except for retail store space, the Company believes that its operating
facilities and sales offices are adequate and suitable for its current needs. To
address expected future office and distribution space needs, the Company plans
to initiate expansions of its Hingham, Massachusetts offices and its Lakeville,
Massachusetts distribution facility in fiscal 1998. Talbots long-term expansion
program, if successful, may require additional office and distribution space to
service such facilities in the future.

         At January 31, 1998, Talbots operated 603 stores, all but eight of
which were leased. The leases typically provide for an initial term of between
ten and fifteen years, with renewal options permitting the Company to extend the
term for between five and ten years thereafter. The Company generally has been
successful in renewing its store leases as they expire. Under most leases, the
Company pays a fixed annual base rent plus a contingent rent ("percentage rent")
based on the store's annual sales in excess of specified levels. The percentage
rent payment is typically 4% to 5% of annual sales in excess of the applicable
threshold. In a majority of leases negotiated since 1987, Talbots has a right to
terminate earlier than the specified expiration date if certain sales levels are
not achieved; such right is usually exercisable after five years of operation.
Most leases also require Talbots to pay real estate taxes, insurance and
utilities and, in shopping center locations, to make contributions toward the
shopping center's common area operating costs and marketing programs. The
Company has many lease arrangements that provide for an increase in annual fixed
rental payments during the lease term. At January 31, 1998, the current terms of



                                       16


<PAGE>   17


Talbots store leases (assuming solely for this purpose that the Company
exercises all lease renewal options) were as follows:


<TABLE>
<CAPTION>
          Years Lease                                          Number of
          Terms Expire                                      Store Leases(a)
          ------------                                      ---------------

          <S>                                                    <C>  
          1998-1999.............................................   10
          2000-2002.............................................   20
          2003-2005.............................................   55
          2006 and later........................................  388

</TABLE>

---------- 
(a) Certain leases have more than one store included within the leased premises.


ITEM 3. LEGAL PROCEEDINGS.

         Talbots is a party to certain legal actions arising in the normal
course of its business. Although the amount of any liability that could arise
with respect to these actions cannot be accurately predicted, in the opinion of
the Company any such liability will not have a material adverse effect on the
financial position, results of operations or liquidity of Talbots.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         No matters were submitted to a vote of security holders during the
fourth quarter of fiscal 1997.



                                       17


<PAGE>   18


                                     PART II


ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
        MATTERS.

         Information concerning the market in which the Company's common stock
was traded in 1997 and the approximate number of record holders of common stock
and certain other information called for by this Item 5 are set forth under the
captions "Selected Quarterly Financial Data" on page 34 and "Market for
Registrant's Common Stock and Related Shareholder Matters" on page 36 of Talbots
Annual Report to Shareholders for the fiscal year ended January 31, 1998 and is
incorporated herein by reference.

         At April 2, 1998, approximately 63.4% of Talbots common stock was held
by JUSCO USA.


ITEM 6. SELECTED FINANCIAL DATA.

         The information called for by this Item 6 is set forth under the
caption "Five Year Financial Summary" on page 12 of Talbots Annual Report to
Shareholders for the fiscal year ended January 31, 1998 and is incorporated
herein by reference.


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

         The information called for by this Item 7 is set forth under the
caption "Management's Discussion and Analysis of Financial Condition and Results
of Operations" on pages 13 to 17 of Talbots Annual Report to Shareholders for
the fiscal year ended January 31, 1998 and is incorporated herein by reference.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Not applicable.





                                       18


<PAGE>   19


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

         The report of independent auditors, the consolidated financial
statements of Talbots, the notes to consolidated financial statements, and the
supplementary financial information are set forth on pages 18 to 34 of Talbots
Annual Report to Shareholders for the fiscal year ended January 31, 1998 and are
incorporated herein by reference.


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

         Not applicable.



                                       19


<PAGE>   20


                                    PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

         Information concerning Talbots directors under the caption "Election of
Directors" on pages 2 to 4 of Talbots Proxy Statement for Talbots 1998 Annual
Meeting of Shareholders, and the information concerning Talbots executive and
other officers set forth in Part I, Item 1 above under the caption "Executive
and other Officers of the Company," are incorporated herein by reference.


ITEM 11. EXECUTIVE COMPENSATION.

         The information set forth under the caption "Executive Compensation" on
pages 5 to 10 of Talbots Proxy Statement for Talbots 1998 Annual Meeting of
Shareholders, the information concerning director compensation under the caption
"Director Compensation; Attendance; Committees" on page 4 of Talbots Proxy
Statement for Talbots 1998 Annual Meeting of Shareholders, and the information
under the caption "Compensation Committee Interlocks and Insider Participation"
on pages 13 to 14 of Talbots Proxy Statement for Talbots 1998 Annual Meeting of
Shareholders, are each incorporated herein by reference. The information
included under "Executive Compensation--Report on Compensation of Executive
Officers" and "Executive Compensation--Performance Graph" is not incorporated in
this Item 11.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         The information set forth under the caption "Beneficial Ownership of
Common Stock" on pages 15 to 16 of Talbots Proxy Statement for Talbots 1998
Annual Meeting of Shareholders is incorporated herein by reference.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         The information set forth under the caption "Executive
Compensation--Certain Transactions with Related Parties" on pages 14 to 15 of
Talbots Proxy Statement for Talbots 1998 Annual Meeting of Shareholders is
incorporated herein by reference.



                                       20


<PAGE>   21


                                     PART IV


ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

  (a)(1) FINANCIAL STATEMENTS: The following Independent Auditor's Report and
         Consolidated Financial Statements of Talbots are incorporated herein by
         reference to pages 18 to 33 of Talbots Annual Report to Shareholders
         for the fiscal year ended January 31, 1998:

                  Consolidated Statements of Earnings for the Fifty-Two Weeks
                  Ended January 31, 1998, the Fifty-Two Weeks Ended February 1,
                  1997 and the Fifty-Three Weeks Ended February 3, 1996

                  Consolidated Balance Sheets at January 31, 1998 and February
                  1, 1997

                  Consolidated Statements of Cash Flows for the Fifty-Two Weeks
                  Ended January 31, 1998, the Fifty-Two Weeks Ended February 1,
                  1997 and the Fifty-Three Weeks Ended February 3, 1996

                  Consolidated Statements of Stockholders' Equity for the
                  Fifty-Two Weeks Ended January 31, 1998, the Fifty-Two Weeks
                  Ended February 1, 1997 and the Fifty-Three Weeks Ended
                  February 3, 1996

                  Notes to Consolidated Financial Statements

                  Independent Auditor's Report

  (a)(2) FINANCIAL STATEMENT SCHEDULES: The document and schedule listed below
         are filed as part of this Form 10-K:

                                                              Page in Form 10-K
                  Independent Auditor's Report on
                  Financial Statement Schedule                       F-1

                  Schedule II -- Valuation and Qualifying
                  Accounts and Reserves                              F-2


                  All other financial statement schedules have been omitted
                  because the required information is either presented in the
                  consolidated financial statements or the notes thereto or is
                  not applicable, required or material.




                                       21


<PAGE>   22



  (a)(3) The following Exhibits are filed as part of, or incorporated by
         reference into, this Annual Report:

EXHIBIT


(3)      ARTICLES OF INCORPORATION AND BY-LAWS.

         3.1      Certificate of Incorporation, as amended, of Talbots.(1)

         3.2      By-laws of Talbots.(1)

(4)      INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING
         INDENTURES.

         4.1      Form of Common Stock Certificate of Talbots.(1)

(10)     MATERIAL CONTRACTS.

         10.1     Stockholders Agreement, dated as of November 18, 1993, between
                  Talbots and JUSCO USA.(2)

         10.2     Revolving Credit Agreement, dated as of January 25, 1994
                  between Talbots and The Dai-Ichi Kangyo Bank, Limited.(2)

         10.3     Revolving Credit Agreement, dated as of January 25, 1994
                  between Talbots and The Bank of Tokyo Trust Company.(2)

         10.4     Revolving Credit Agreement, dated as of January 25, 1994
                  between Talbots and The Norinchukin Bank.(2)

         10.5     Revolving Credit Agreement, dated as of January 25, 1994
                  between Talbots and The Daiwa Bank, Limited.(2)

         10.6     Revolving Credit Agreement, dated as of January 25, 1994
                  between Talbots and The Sakura Bank, Limited.(2)

         10.7     Letter Agreement, dated as of January 31, 1994, concerning
                  various credit facilities, between Talbots and The First
                  National Bank of Boston.(2)

         10.8     Letter Agreement, dated as of September 26, 1994, concerning
                  various credit facilities, between Talbots and The First
                  National Bank of Boston.(4)

         10.9     Letter of Credit Agreement, dated as of August 10, 1993,
                  between Talbots and The First National Bank of Boston.(1)



                                       22


<PAGE>   23


         10.10    Request for Extension dated December 20, 1996, relating to the
                  Revolving Credit Agreement, from Talbots to The Dai-Ichi
                  Kangyo Bank, Limited, together with a Confirmation of
                  Extension letter dated January 28, 1997 from The Dai-Ichi
                  Kangyo Bank, Limited to Talbots.(7)

         10.11    Request for Extension dated December 28, 1994, relating to the
                  Revolving Credit Agreement, from Talbots to The Daiwa Bank,
                  Limited, together with an acceptance letter dated January 27,
                  1995 from The Daiwa Bank, Limited to Talbots.(4)

         10.12    Request for Extension dated December 20, 1996, relating to the
                  Revolving Credit Agreement, from Talbots to The Norinchukin
                  Bank, together with an Acceptance of Extension letter dated
                  January 17, 1997 from The Norinchukin Bank to Talbots.(7)

         10.13    Request for Extension dated December 20, 1996, relating to the
                  Revolving Credit Agreement, from Talbots to The Sakura Bank,
                  Limited, together with an acceptance letter dated January 24,
                  1997 from The Sakura Bank, Limited to Talbots.(7)

         10.14    Request for Extension dated December 20, 1996, relating to the
                  Revolving Credit Agreement, from Talbots to The Bank of
                  Tokyo-Mitsubishi Trust Company, together with an Acceptance of
                  Extension letter dated January 27, 1997 from The Bank of Tokyo
                  Trust Company to Talbots.(7)

         10.15    Trademark Purchase and License Agreement, dated as of November
                  26, 1993, between JUSCO (Europe) B.V. and The Classics
                  Chicago, Inc.(2)

         10.16    Management Service Agreement, effective as of February 1,
                  1990, by and between Talbots Japan Co., Ltd. and Talbots.(1)

         10.17    Services Agreement, dated as of November 18, 1993, between
                  Talbots Japan Co., Ltd. and Talbots.(2)

         10.18    Stock Purchase Agreement, dated as of November 26, 1993,
                  between Talbots and JUSCO.(2)

         10.19    License Agreement, dated as of November 26, 1993, between The
                  Classics Chicago, Inc., Talbots, Talbots International
                  Retailing Limited, Inc., Talbots (Canada), Inc. and Talbots
                  (U.K.) Retailing Limited.(2)




                                       23


<PAGE>   24


         10.20    Tax Allocation Agreement, dated as of November 18, 1993,
                  between JUSCO USA, Talbots, Talbots International Retailing
                  Limited, Inc., Talbots (U.K.) Retailing Limited and The
                  Classics Chicago, Inc.(2)

         10.21    The Talbots, Inc. Pension Plan for Salaried Employees, as
                  amended and restated January 1, 1989, including amendments
                  through January 1, 1994.(4)

         10.22    The Talbots, Inc. Retirement Savings Voluntary Plan, as
                  amended and restated, effective as of November 1, 1993.(4)

         10.23    Agreement, dated as of November 26, 1993, between JUSCO
                  (Europe) B.V. and Talbots concerning the termination of the
                  License Agreement, effective as of June 26, 1988, between
                  JUSCO Europe and Talbots.(2)

         10.24    Services Agreement, dated as of October 29, 1989, between
                  Talbots and JUSCO USA.(1)

         10.25    Share Purchase Agreement dated as of February 21, 1995 between
                  Talbots and JUSCO USA.(3)

         10.26    Second Extension of Share Repurchase Program, dated as of May
                  23, 1997, between Talbots and JUSCO USA.(5)

         10.27    First Amendment to the Revolving Credit Agreement dated as of
                  January 25, 1994 between Talbots and The Dai-Ichi Kangyo Bank,
                  Ltd. dated November 21, 1995.(6)

         10.28    First Amendment to the Revolving Credit Agreement dated as of
                  January 25, 1994 between Talbots and The Norinchukin Bank
                  dated November 21, 1995.(6)

         10.29    First Amendment to the Revolving Credit Agreement dated as of
                  January 25, 1994 between Talbots and The Sakura Bank, Ltd.
                  dated November 21, 1995.(6)

         10.30    First Amendment to the Revolving Credit Agreement dated as of
                  January 25, 1994 between Talbots and The Bank of Tokyo Trust
                  Co. dated November 21, 1995.(6)

         10.31    Termination Agreement dated as of November 27, 1995 between
                  Talbots and The Daiwa Bank, Ltd., New York Branch.(6)

         10.32    HongkongBank Letter of Credit Service Agreement, dated as of
                  April 19, 1996 together with a Continuing Commercial Letter of
                  Credit and Security Agreement dated May 15, 1996 and a Hexagon
                  Customer Agreement, dated


                                       24


<PAGE>   25


                  May 15, 1996, between Talbots and The Hongkong and Shanghai
                  Banking Corporation Limited.(7)

         10.33    Amendment to License Agreement, dated January 29, 1997, among
                  The Classics Chicago, Inc., Talbots, Talbots International
                  Retailing Limited, Inc., Talbots (Canada), Inc., and Talbots
                  (U.K.) Retailing, Ltd.(7)

         10.34    Third Amendment to the Revolving Credit Agreement between
                  Talbots and The Sakura Bank, Limited, New York Branch, dated
                  as of January 28, 1998.(9)

         10.35    Revolving Credit Agreement between Talbots and The Dai-Ichi
                  Kangyo Bank, Limited, dated as of April 14, 1998.(9)

         10.36    Credit Agreement between Talbots and The Bank of
                  Tokyo-Mitsubishi, Ltd., New York Branch, dated as of April 17,
                  1998.(9)

         10.37    Fourth Amendment to the Revolving Credit Facility between
                  Talbots and The Sakura Bank, Limited, New York Branch, dated
                  as of April 17, 1998.(9)

         10.38    Third Amendment Agreement between Talbots and The Norinchukin
                  Bank, New York Branch, dated as of April 17, 1998.(9)
         
         10.39    Third Amendment to the Revolving Credit Agreement between 
                  Talbots and The Dai-Ichi Kangyo Bank, Limited, dated as of
                  April 17, 1998.(9)

         MANAGEMENT CONTRACTS AND COMPENSATORY PLANS AND ARRANGEMENTS.

         10.40    Contract between Masaharu Isogai and Talbots, dated as of
                  November 18, 1993.(2)

         10.41    Talbots Phantom Stock Plan, effective as of January 29, 
                  1989.(1)

         10.42    Amendment No. 1 to the Talbots Phantom Stock Plan, dated as of
                  November 18, 1993.(2)

         10.43    The Talbots, Inc. Supplemental Retirement Plan, effective as
                  of June 27, 1988.(1)

         10.44    The Talbots, Inc. Supplemental Savings Plan (amended and
                  restated as of January 1, 1993).(1)

         10.45    The Talbots, Inc. Deferred Compensation Plan (amended and
                  restated as of January 1, 1993).(1)



                                       25


<PAGE>   26


         10.46    The Talbots, Inc. Supplemental Benefits Trust Agreement, dated
                  as of November 18, 1993, between Talbots and State Street Bank
                  and Trust Company.(2)

         10.47    The Talbots, Inc. 1993 Executive Stock Based Incentive 
                  Plan.(2)

         10.48    Employment Agreement, dated as of October 22, 1993, between
                  Arnold B. Zetcher and Talbots1 as amended by Amendment No. 1
                  dated May 11, 1994.(4)

         10.49    Amendment No. 1 to The Talbots, Inc. Supplemental Retirement
                  Plan, dated as of November 18, 1993.(2)

         10.50    Amendment No. 1 to The Talbots, Inc. Supplemental Savings
                  Plan, dated as of November 18, 1993.(2)

         10.51    Amendment No. 1 to The Talbots, Inc. Deferred Compensation
                  Plan, dated as of November 18, 1993.(2)

         10.52    Employment Agreement, dated as of October 22, 1993, between
                  Clark Hinkley and The Talbots, Inc.(2) as amended by Amendment
                  No. 1 dated May 11, 19944 and as supplemented by Agreement and
                  Release dated as of November 30, 1997.(9)

         10.53    Change in Control Agreements, dated as of November 11, 1993,
                  between Talbots and each of J. Bruce Ash, Edward Larsen,
                  Michele Mandell, Richard T. O'Connell, Bruce Soderholm, Stuart
                  Stolper, Paul Kastner, Sandy Katz and Lucy Main Tweet.(2)

         10.54    Change in Control Agreements, dated August 22, 1994, between
                  Talbots and each of Judith O'Keefe and Bruce Prescott.(4)

         10.55    Employment Agreement, dated as of October 27, 1997, between
                  the Company and Mark Shulman.(8)

(11)     STATEMENT RE COMPUTATION OF PER SHARE EARNINGS

         11.1     Incorporated by reference to footnote 11 "Reconciliation of
                  Basic to Diluted Net Income Per Share" on page 31 of Talbots
                  Annual Report to Shareholders for the fiscal year ended
                  January 31, 1998.

(13)     ANNUAL REPORT TO SECURITY HOLDERS

         13.1     Excerpts from the 1997 Annual Report of Talbots incorporated
                  by reference.



                                       26


<PAGE>   27


(21)     SUBSIDIARIES.

         21.1     List of subsidiaries of Talbots.(1)

(23)     CONSENTS OF EXPERTS AND COUNSEL.

         23.1     Independent Auditors' Consent of Deloitte & Touche LLP.


(27)     FINANCIAL DATA SCHEDULES.

         27.1     Amended and Restated Financial Data Schedule for the quarter
                  ended May 4, 1996, submitted to the Securities and Exchange
                  Commission in electronic format.

         27.2     Amended and Restated Financial Data Schedule for the
                  twenty-six weeks ended August 3, 1996, submitted to the
                  Securities and Exchange Commission in electronic format.

         27.3     Amended and Restated Financial Data Schedule for the
                  thirty-nine weeks ended November 2, 1996, submitted to the
                  Securities and Exchange Commission in electronic format.

         27.4     Amended and Restated Financial Data Schedule for the year
                  ended February 1, 1997, submitted to the Securities and
                  Exchange Commission in electronic format.

         27.5     Restated Financial Data Schedule for the quarter ended May 3,
                  1997, submitted to the Securities and Exchange Commission in
                  electronic format.

         27.6     Amended and Restated Financial Data Schedule for the
                  twenty-six weeks ended August 2, 1997, submitted to the
                  Securities and Exchange Commission in electronic format.

         27.7     Amended and Restated Financial Data Schedule for the
                  thirty-nine weeks ended November 1, 1997, submitted to the
                  Securities and Exchange Commission in electronic format.

         27.8     Financial Data Schedule for the year ended January 31, 1998,
                  submitted to the Securities and Exchange Commission in
                  electronic format.


----------

     (1)  Incorporated by reference to the exhibits filed with Talbots
Registration Statement on Form S-1 (No. 33-69082), which Registration Statement
became effective November 18, 1993.



                                       27


<PAGE>   28


    (2)   Incorporated by reference to the exhibits filed with Talbots Current
Report on Form 8-K dated April 25, 1994.

    (3)   Incorporated by reference to the exhibits filed with Talbots Current
Report on Form 8-K dated February 21, 1995.

    (4)   Incorporated by reference to the exhibits filed with Talbots Current
Report on Form 8-K dated April 27, 1995.

    (5)   Incorporated by reference to the exhibits filed with Talbots Current
Report on Form 8-K dated May 23, 1997.

    (6)   Incorporated by reference to the exhibits filed with Talbots Current
Report on Form 8-K dated November 21, 1995.

    (7)   Incorporated by reference to the exhibits filed with Talbots Current
Report on Form 8-K dated April 30, 1997.

    (8)   Incorporated by reference to the exhibits filed with Talbots Current
Report on Form 8-K dated October 27, 1997.

    (9)   Incorporated by reference to the exhibits filed with Talbots Current
Report on Form 8-K dated November 30, 1997.

(b)      REPORT ON FORM 8-K: Reports on Form 8-K filed during the fourth quarter
         of fiscal 1997:

                  (I)      Current Report on Form 8-K dated October 27, 1997 and
                           filed December 15, 1997 concerning an employment
                           agreement between Talbots and Mark Shulman.

With the exception of the information incorporated by reference to the Annual
Report to Shareholders in Items 5, 6, 7 and 8 of Part II and Item 14 of Part IV
of this Annual Report, Talbots 1997 Annual Report to Shareholders is not to be
deemed filed as part of this Annual Report.



                                       28


<PAGE>   29


                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.


Dated: May 1, 1998

           THE TALBOTS, INC.
           (Registrant)


           By /s/ Edward Larsen
              ------------------------------------------  
              Edward L. Larsen
              Senior Vice President, Finance, Chief
              Financial Officer and Treasurer (Principal
              Financial and Accounting Officer)

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated as of May 1, 1998:



/s/ Arnold B. Zetcher                                 /s/ Masaharu Isogai
----------------------------------                    -------------------------
Arnold B. Zetcher                                     Masaharu Isogai
President and Chief Executive                         Director
Officer and Director




                                                      /s/ Elizabeth T. Kennan
----------------------------------                    -------------------------
Takuya Okada                                          Elizabeth T. Kennan
Chairman of the Board of                              Director
Directors




----------------------------------                    -------------------------
Eiji Akiyama                                          Motoya Okada
Director                                              Director



/s/ Mark Shulman                                      /s/ Mark H. Willes
----------------------------------                    -------------------------
Mark Shulman                                          Mark H. Willes
Officer and Director                                  Director





<PAGE>   30
                                  EXHIBIT INDEX

EXHIBIT

(3)      ARTICLES OF INCORPORATION AND BY-LAWS.

         3.1      Certificate of Incorporation, as amended, of Talbots.(1)

         3.2      By-laws of Talbots.(1)

(4)      INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING
         INDENTURES.

         4.1      Form of Common Stock Certificate of Talbots.(1)

(10)     MATERIAL CONTRACTS.

         10.1     Stockholders Agreement, dated as of November 18, 1993, between
                  Talbots and JUSCO USA.(2)

         10.2     Revolving Credit Agreement, dated as of January 25, 1994
                  between Talbots and The Dai-Ichi Kangyo Bank, Limited.(2)

         10.3     Revolving Credit Agreement, dated as of January 25, 1994
                  between Talbots and The Bank of Tokyo Trust Company.(2)

         10.4     Revolving Credit Agreement, dated as of January 25, 1994
                  between Talbots and The Norinchukin Bank.(2)

         10.5     Revolving Credit Agreement, dated as of January 25, 1994
                  between Talbots and The Daiwa Bank, Limited.(2)

         10.6     Revolving Credit Agreement, dated as of January 25, 1994
                  between Talbots and The Sakura Bank, Limited.(2)

         10.7     Letter Agreement, dated as of January 31, 1994, concerning
                  various credit facilities, between Talbots and The First
                  National Bank of Boston.(2)

         10.8     Letter Agreement, dated as of September 26, 1994, concerning
                  various credit facilities, between Talbots and The First
                  National Bank of Boston.(4)

         10.9     Letter of Credit Agreement, dated as of August 10, 1993,
                  between Talbots and The First National Bank of Boston.(1)

         10.10    Request for Extension dated December 20, 1996, relating to the
                  Revolving Credit Agreement, from Talbots to The Dai-Ichi
                  Kangyo Bank, Limited,



<PAGE>   31


                  together with a Confirmation of Extension letter dated January
                  28, 1997 from The Dai-Ichi Kangyo Bank, Limited to Talbots.(7)

         10.11    Request for Extension dated December 28, 1994, relating to the
                  Revolving Credit Agreement, from Talbots to The Daiwa Bank,
                  Limited, together with an acceptance letter dated January 27,
                  1995 from The Daiwa Bank, Limited to Talbots.(4)

         10.12    Request for Extension dated December 20, 1996, relating to the
                  Revolving Credit Agreement, from Talbots to The Norinchukin
                  Bank, together with an Acceptance of Extension letter dated
                  January 17, 1997 from The Norinchukin Bank to Talbots.(7)

         10.13    Request for Extension dated December 20, 1996, relating to the
                  Revolving Credit Agreement, from Talbots to The Sakura Bank,
                  Limited, together with an acceptance letter dated January 24,
                  1997 from The Sakura Bank, Limited to Talbots.(7)

         10.14    Request for Extension dated December 20, 1996, relating to the
                  Revolving Credit Agreement, from Talbots to The Bank of
                  Tokyo-Mitsubishi Trust Company, together with an Acceptance of
                  Extension letter dated January 27, 1997 from The Bank of Tokyo
                  Trust Company to Talbots.(7)

         10.15    Trademark Purchase and License Agreement, dated as of November
                  26, 1993, between JUSCO (Europe) B.V. and The Classics
                  Chicago, Inc.(2)

         10.16    Management Service Agreement, effective as of February 1,
                  1990, by and between Talbots Japan Co., Ltd. and Talbots.(1)

         10.17    Services Agreement, dated as of November 18, 1993, between
                  Talbots Japan Co., Ltd. and Talbots.(2)

         10.18    Stock Purchase Agreement, dated as of November 26, 1993,
                  between Talbots and JUSCO.(2)

         10.19    License Agreement, dated as of November 26, 1993, between The
                  Classics Chicago, Inc., Talbots, Talbots International
                  Retailing Limited, Inc., Talbots (Canada), Inc. and Talbots
                  (U.K.) Retailing Limited.(2)

         10.20    Tax Allocation Agreement, dated as of November 18, 1993,
                  between JUSCO USA, Talbots, Talbots International Retailing
                  Limited, Inc., Talbots (U.K.) Retailing Limited and The
                  Classics Chicago, Inc.(2)

         10.21    The Talbots, Inc. Pension Plan for Salaried Employees, as
                  amended and restated January 1, 1989, including amendments
                  through January 1, 1994.(4)



<PAGE>   32


         10.22    The Talbots, Inc. Retirement Savings Voluntary Plan, as
                  amended and restated, effective as of November 1, 1993.(4)

         10.23    Agreement, dated as of November 26, 1993, between JUSCO
                  (Europe) B.V. and Talbots concerning the termination of the
                  License Agreement, effective as of June 26, 1988, between
                  JUSCO Europe and Talbots.(2)

         10.24    Services Agreement, dated as of October 29, 1989, between
                  Talbots and JUSCO USA.(1)

         10.25    Share Purchase Agreement dated as of February 21, 1995 between
                  Talbots and JUSCO USA.(3)

         10.26    Second Extension of Share Repurchase Program, dated as of May
                  23, 1997, between Talbots and JUSCO USA.(5)

         10.27    First Amendment to the Revolving Credit Agreement dated as of
                  January 25, 1994 between Talbots and The Dai-Ichi Kangyo Bank,
                  Ltd. dated November 21, 1995.(6)

         10.28    First Amendment to the Revolving Credit Agreement dated as of
                  January 25, 1994 between Talbots and The Norinchukin Bank
                  dated November 21, 1995.)(6)

         10.29    First Amendment to the Revolving Credit Agreement dated as of
                  January 25, 1994 between Talbots and The Sakura Bank, Ltd.
                  dated November 21, 1995.(6)

         10.30    First Amendment to the Revolving Credit Agreement dated as of
                  January 25, 1994 between Talbots and The Bank of Tokyo Trust
                  Co. dated November 21, 1995.(6)

         10.31    Termination Agreement dated as of November 27, 1995 between
                  Talbots and The Daiwa Bank, Ltd., New York Branch.(6)

         10.32    HongkongBank Letter of Credit Service Agreement, dated as of
                  April 19, 1996 together with a Continuing Commercial Letter of
                  Credit and Security Agreement dated May 15, 1996 and a Hexagon
                  Customer Agreement, dated May 15, 1996, between Talbots and
                  The Hongkong and Shanghai Banking Corporation Limited.(7)

         10.33    Amendment to License Agreement, dated January 29, 1997, among
                  The Classics Chicago, Inc., Talbots, Talbots International
                  Retailing Limited, Inc., Talbots (Canada), Inc., and Talbots
                  (U.K.) Retailing, Ltd.(7)




<PAGE>   33


         10.34    Third Amendment to the Revolving Credit Agreement between
                  Talbots and The Sakura Bank, Limited, New York Branch, dated
                  as of January 28, 1998.(9)

         10.35    Revolving Credit Agreement between Talbots and The Dai-Ichi
                  Kangyo Bank, Limited, dated as of April 14, 1998.(9)

         10.36    Credit Agreement between Talbots and The Bank of
                  Tokyo-Mitsubishi, Ltd., New York Branch, dated as of April 17,
                  1998.(9)

         10.37    Fourth Amendment to the Revolving Credit Facility between
                  Talbots and The Sakura Bank, Limited, New York Branch, dated
                  as of April 17, 1998.(9)

         10.38    Third Amendment Agreement between Talbots and The Norinchukin
                  Bank, New York Branch, dated as of April 17, 1998.(9)

         10.39    Third Amendment to the Revolving Credit Agreement between 
                  Talbots and The Dai-Ichi Kangyo Bank, Limited, dated as of
                  April 17, 1998.(9)          

         MANAGEMENT CONTRACTS AND COMPENSATORY PLANS AND ARRANGEMENTS.

         10.40    Contract between Masaharu Isogai and Talbots, dated as of
                  November 18, 1993.(2)

         10.41    Talbots Phantom Stock Plan, effective as of January 29, 
                  1989.(1)

         10.42    Amendment No. 1 to the Talbots Phantom Stock Plan, dated as of
                  November 18, 1993.(2)

         10.43    The Talbots, Inc. Supplemental Retirement Plan, effective as
                  of June 27, 1988.(1)

         10.44    The Talbots, Inc. Supplemental Savings Plan (amended and
                  restated as of January 1, 1993).(1)

         10.45    The Talbots, Inc. Deferred Compensation Plan (amended and
                  restated as of January 1, 1993).(1)

         10.46    The Talbots, Inc. Supplemental Benefits Trust Agreement, dated
                  as of November 18, 1993, between Talbots and State Street Bank
                  and Trust Company.(2)

         10.47    The Talbots, Inc. 1993 Executive Stock Based Incentive 
                  Plan.(2)

         10.48    Employment Agreement, dated as of October 22, 1993, between
                  Arnold B. Zetcher and Talbots(1) as amended by Amendment No. 1
                  dated May 11, 1994.(4)




<PAGE>   34


         10.49    Amendment No. 1 to The Talbots, Inc. Supplemental Retirement
                  Plan, dated as of November 18, 1993.(2)

         10.50    Amendment No. 1 to The Talbots, Inc. Supplemental Savings
                  Plan, dated as of November 18, 1993.(2)

         10.51    Amendment No. 1 to The Talbots, Inc. Deferred Compensation
                  Plan, dated as of November 18, 1993.(2)

         10.52    Employment Agreement, dated as of October 22, 1993, between
                  Clark Hinkley and The Talbots, Inc.2 as amended by Amendment
                  No. 1 dated May 11, 19944 and as supplemented by Agreement and
                  Release dated as of November 30, 1997.(9)

         10.53    Change in Control Agreements, dated as of November 11, 1993,
                  between Talbots and each of J. Bruce Ash, Edward Larsen,
                  Michele Mandell, Richard T. O'Connell, Bruce Soderholm, Stuart
                  Stolper, Paul Kastner, Sandy Katz and Lucy Main Tweet.(2)

         10.54    Change in Control Agreements, dated August 22, 1994, between
                  Talbots and each of Judith O'Keefe and Bruce Prescott.(4)

         10.55    Employment Agreement, dated as of October 27, 1997, between
                  the Company and Mark Shulman.(8)

(11)     STATEMENT RE COMPUTATION OF PER SHARE EARNINGS

         11.1     Incorporated by reference to footnote 11 "Reconciliation of
                  Basic to Diluted Net Income Per Share" on page 31 of Talbots
                  Annual Report to Shareholders for the fiscal year ended
                  January 31, 1998.

(13)     ANNUAL REPORT TO SECURITY HOLDERS

         13.1     Excerpts from the 1997 Annual Report of Talbots incorporated
                  by reference.

(21)     SUBSIDIARIES.

         21.1     List of subsidiaries of Talbots.(1)

(23)     CONSENTS OF EXPERTS AND COUNSEL.

         23.1     Independent Auditors' Consent of Deloitte & Touche LLP.





<PAGE>   35


(27)     FINANCIAL DATA SCHEDULES.

         27.1     Amended and Restated Financial Data Schedule for the quarter
                  ended May 4, 1996, submitted to the Securities and Exchange
                  Commission in electronic format.

         27.2     Amended and Restated Financial Data Schedule for the
                  twenty-six weeks ended August 3, 1996, submitted to the
                  Securities and Exchange Commission in electronic format.

         27.3     Amended and Restated Financial Data Schedule for the
                  thirty-nine weeks ended November 2, 1996, submitted to the
                  Securities and Exchange Commission in electronic format.

         27.4     Amended and Restated Financial Data Schedule for the year
                  ended February 1, 1997, submitted to the Securities and
                  Exchange Commission in electronic format.

         27.5     Restated Financial Data Schedule for the quarter ended May 3,
                  1997, submitted to the Securities and Exchange Commission in
                  electronic format.

         27.6     Amended and Restated Financial Data Schedule for the
                  twenty-six weeks ended August 2, 1997, submitted to the
                  Securities and Exchange Commission in electronic format.

         27.7     Amended and Restated Financial Data Schedule for the
                  thirty-nine weeks ended November 1, 1997, submitted to the
                  Securities and Exchange Commission in electronic format.

         27.8     Financial Data Schedule for the year ended January 31, 1998,
                  submitted to the Securities and Exchange Commission in
                  electronic format.

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

    (1)   Incorporated by reference to the exhibits filed with Talbots
Registration Statement on Form S-1 (No. 33-69082), which Registration Statement
became effective November 18, 1993.

    (2)   Incorporated by reference to the exhibits filed with Talbots Current
Report on Form 8-K dated April 25, 1994.

    (3)   Incorporated by reference to the exhibits filed with Talbots Current
Report on Form 8-K dated February 21, 1995.

    (4)   Incorporated by reference to the exhibits filed with Talbots Current
Report on Form 8-K dated April 27, 1995.




<PAGE>   36


    (5)   Incorporated by reference to the exhibits filed with Talbots Current
Report on Form 8-K dated May 23, 1997.

    (6)   Incorporated by reference to the exhibits filed with Talbots Current
Report on Form 8-K dated November 21, 1995.

    (7)   Incorporated by reference to the exhibits filed with Talbots Current
Report on Form 8-K dated April 30, 1997.

    (8)   Incorporated by reference to the exhibits filed with Talbots Current
Report on Form 8-K dated October 27, 1997.

    (9)   Incorporated by reference to the exhibits filed with Talbots Current
Report on Form 8-K dated November 30, 1997.





<PAGE>   37


INDEPENDENT AUDITOR'S REPORT


To the Board of Directors and Stockholders of
The Talbots, Inc.:

We have audited the consolidated financial statements of The Talbots, Inc. as of
January 31, 1998 and February 1, 1997, and for each of the three years in the
period ended January 31, 1998, and have issued our report thereon dated March
11, 1998; such financial statements and report are included in your 1997 Annual
Report to Stockholders and are incorporated herein by reference. Our audits also
included the financial statement schedule of The Talbots, Inc., listed in Item
14. This financial statement schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion based on our audits. In
our opinion, such financial statement schedule, when considered in relation to
the basic consolidated financial statements taken as a whole, presents fairly in
all material respects the information set forth therein.




/s/ Deloitte & Touche LLP

Deloitte & Touche LLP
March 11, 1998
Boston, Massachusetts









                                       F-1




<PAGE>   38

                                                                     SCHEDULE II


                      The Talbots, Inc. and Subsidiaries
                Valuation and Qualifying Accounts and Reserves
                      Three Years Ended January 31, 1998
                                (in thousands)


<TABLE>
<CAPTION>
                                      COLUMN A       COLUMN B       COLUMN C       COLUMN D        COLUMN E

                                                               Additions
                                                       -------------------------
                                        Balance at     Charged to     Charged to
                                       Beginning of    Costs and         Other      Deductions   Balance at
Description                               Period        Expenses       Accounts        (A)     End of Period
------------------------------------------------------------------------------------------------------------
<S>                                        <C>                                                    <C>
YEAR ENDED JANUARY 31, 1998

Allowance for doubtful accounts
(deducted from accounts
receivable)                                $1,200        3,254            --           3,054      $1,400

YEAR ENDED FEBRUARY 1, 1997

Allowance for doubtful accounts
(deducted from accounts
receivable)                                $1,135        1,798            --           1,733      $1,200

YEAR ENDED FEBRUARY 3, 1996

Allowance for doubtful accounts
(deducted from accounts
receivable)                                $1,050        1,651            --           1,566      $1,135


</TABLE>


(A) Write-off of uncollectible accounts net of recoveries.









                                       F-2