Moody’s revises Talbots view to stable

Moody’s Investors Service said it revised the outlook for Talbots Inc. to stable from positive.

The change in outlook to stable reflects Moody’s view the ongoing investments needed to sustain Talbots’ market position and grow revenue amid intensifying competition in the specialty apparel retail sector and the consumer shift to online spending will pressure operating margins.

Moody’s said it believes this will result in stable free cash flow generation relative to debt levels, which the agency projects will be at around 5% in the next 12-18 months.

The agency also affirmed Talbots’ B2 corporate family rating, B2-PD probability of default rating and the B2 rating on the company’s first-lien senior secured term loan.

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