Talbots Announces Additional Stock Repurchase Program; Company Cites Continued Strong Cash Flow

Business Wire, August 17, 2004

HINGHAM, Mass. -- The Talbots, Inc. (NYSE:TLB) announced today that its Board of Directors has approved an additional common stock repurchase program to acquire up to $50 million of its outstanding common stock. The program authorizes the Company to purchase the shares from time to time over a two-year period.

Under a separate $50 million repurchase authorization approved by its board in March 2004, the Company has repurchased 1,362,954 shares at a cost of approximately $47.3 million and expects to complete this authorization in the near future. The Company has acquired a total of 20,501,133 shares of its outstanding common stock at a cost of approximately $470.3 million under its stock repurchase programs first initiated in February 1995.

Arnold B. Zetcher, Chairman, President and Chief Executive Officer commented, "The approval of this repurchase program to acquire up to an additional $50 million of our common stock is consistent with our commitment to enhance value to all shareholders. The Board's action is a reflection of the Company's strong cash flow which we believe will be sufficient to support our ongoing store expansion plans, the payment of regular quarterly dividends and this stock repurchase program."*

The Company will purchase a pro rata number of shares from AEON (U.S.A.), Inc., so as to maintain substantially the same percentage ownership balance in the Company between AEON (U.S.A.), Inc. and the public shareholders. Currently, approximately 57% of Talbots outstanding shares are owned by AEON (U.S.A.), Inc., a wholly-owned subsidiary of AEON Co., Ltd, a Tokyo-based international retailer. The other 43% of the outstanding shares are publicly owned.

As under earlier repurchase authorizations in which AEON (U.S.A.), Inc. participated on this same pro rata basis, share repurchases from AEON (U.S.A.), Inc. under the extended program will be settled monthly based on the level of any open market purchases which the Company may make under the program for such month. The price of the shares purchased from AEON (U.S.A.), Inc. will be the weighted average price paid to the public shareholders for the month. AEON (U.S.A.), Inc. has participated on this same pro rata basis in all of the share repurchase programs established by the Company since 1995, with the exception of the $50 million share repurchase program established by the Company in October 2001, in which AEON (U.S.A.), Inc. did not participate.

Repurchased common shares will be held as treasury shares, a portion of which could be used to satisfy the Company's requirements under its equity incentive and other benefit plans. At August 16, 2004, the Company had 55,975,835 shares of common stock outstanding.

Talbots is a leading national specialty retailer and cataloger of women's, children's and men's classic apparel, shoes and accessories. The Company currently operates 1,011 stores - 506 Talbots Misses stores, including 20 Talbots Misses stores in Canada and five Talbots Misses stores in the United Kingdom; 276 Talbots Petites stores, including three Talbots Petites stores in Canada; 40 Talbots Accessories & Shoes stores; 68 Talbots Kids stores; 87 Talbots Woman stores, including two Talbots Woman stores in Canada; nine Talbots Mens stores; one Talbots Collection store; and 24 Talbots Outlet stores. Its catalog operation expects to circulate approximately 45 million catalogs worldwide in fiscal 2004. Talbots on-line shopping site is located at www.talbots.com.

The foregoing contains forward-looking information within the meaning of The Private Securities Litigation Reform Act of 1995. The statements may be identified by such forward-looking terminology as "expect," "look," "believe," "anticipate," "outlook," "will," or similar statements or variations of such terms. All of the "outlook" information (including future revenues, comparable sales, earnings and EPS, and other financial performance or operating measures) constitutes forward-looking information. Our forward-looking statements are based on our current expectations, assumptions, estimates and projections about our Company including assumptions and projections concerning store traffic, levels of store sales including regular price selling and markdown selling, and customer preferences. Our forward looking statements involve substantial known and unknown risks and uncertainties as to future events which may or may not occur, including, the Company's ability to continue to generate strong cash flows, effectiveness of the Company's brand awareness and marketing programs, effectiveness and profitability of new concepts including the Mens concept, effectiveness of its e-commerce site, acceptance of Talbots fashions, including its Transitional and Fall 2004 fashions, the Company's ability to anticipate and successfully respond to changing customer tastes and preferences and to produce the appropriate balance of merchandise offerings, the Company's ability to sell its merchandise at regular prices as well as its ability to successfully execute its major sale events including the timing and levels of markdowns, retail economic conditions including consumer spending, consumer confidence and a continued uncertain economy, and the impact of a continued promotional retail environment. In each case, actual results may differ materially from such forward-looking information. Certain other factors that may cause actual results to differ from such forward-looking statements are included in the Company's 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 available on the Talbots website under "Investor Relations", and you are urged to carefully consider all such factors. In light of the substantial uncertainty inherent in such forward-looking statements, you should not consider their inclusion to be a guarantee or representation that such forward-looking matters will in fact be achieved. The Company assumes no obligation for updating or revising any such forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking statements.