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Talbots (NYSE:TLB) seems to be in the twilight zone. They reported Q4 and year end results that were basically in line with revised expectations. The problem was the revised expectations were poor. Arnold B. Zetcher, Chairman, President and Chief Executive Officer commented that after a strong first half and a strong Sep the trend disappeared (read customers stopped spending money). This was spread over all lines.

Mr Zetcher did grasp at straws with this comment

“However, our major Spring 3 catalog, which was mailed to customers in the beginning of March, has so far received positive customer response and is off to a strong start.”

The comment was included in an early morning press release on March 7.

Trading has been downward since Oct. Institutions have unloaded approximately 55% of their holdings. Mr. Harold Bosworth the Chief Merchandising Officer unloaded 12,500 shares in Jan 26, 2007. I am sure it was financially wise but extremely discouraging to other investors. Was he correcting his own homework?

The company is due for a shake-up. Even some mild performance improvement will not catch the markets attention. The problem is some 57% of shares are held by insiders and 5% holders. Someone has to decide they want out of the boat. A boardroom bloodbath is usually involved. Until this cleansing action occurs the company will probably remain stuck in the muck.

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