Sycamore Partners Takes Talbots Stake

Buyout shop Sycamore Partners has taken a 9.9% stake in clothing retailer Talbots Inc., Reuters reported. Sycamore and its affiliates become the second biggest shareholders in Talbots, after OppenheimerFunds, which holds a 13.27% stake, according to Reuters. Shares of Talbots were up 10% Monday, trading at $3.80 a share.

(Reuters) – Private equity firm Sycamore Partners reported a 9.90 percent stake in women’s clothing retailer Talbots Inc., at a time when some investors are suggesting the management is running out of time to turn around its business.

Shares of Talbots were up 10 percent at $3.80 on Monday morning on the New York Stock Exchange.

Sycamore Partners said Talbot’s stock was undervalued, and it expects to talk to the retailer’s management and other shareholders regarding the company’s operations and strategy, among other things.

“While we cannot fundamentally recommend accumulation of the stock at this point, consistent with our rating we also would not be short, especially with this news of activist involvement,” said Janney Capital Markets analyst Adrienne Tennant, who upgraded the stock to “neutral” in July.

Sycamore and its affiliates become the second biggest shareholders in Talbots, after OppenheimerFunds, which holds a 13.27 percent stake, according to Reuters data.

Talbots has struggled for four years to change its stuffy image, and some investors have said it may soon be time for a change in management, or even a sale, if things don’t improve. (Reporting by Mihir Dalal in Bangalore; Editing by Prem Udayabhanu, Saumyadeb Chakrabarty)