The retailer has been closing some businesses, shaking up its management team, revamping its classic styles, and slashing jobs as part of its efforts to cut costs, according to the news report. Talbots, which operates 586 locations under the Talbots brand name and 283 locations under the J. Jill label, expects the dividend suspension to result in cash savings of about $29 million in fiscal 2009, and the freeze of its pension plans to save nearly $6 million.
Additionally, Talbots entered into a revolving credit agreement with Bank of Tokyo-Mitsubishi to convert its existing uncommitted working capital line of $15 million to a committed line, effective immediately, according to Reuters.
The past several years saw a trend of sponsors freezing their defined benefit plans in favor of new 401(k) programs or 401(k) match contribution enhancements due to both costs and administrative reasons (see One Fifth of DB Participants Had Plans Frozen ). However, a recent study conducted by Pyramis and executed in association with Asset International, Inc., publisher of PLANSPONSOR, found that plan sponsors have, for the most part, concluded their formal assessments of the merits of freezing or closing their DB plans and are now focused on a long-term view (see Survey Indicates DB Freeze Wave is Over ).
While some employers are still turning to DB plans to cut costs (see Trucking Company Freezes DB to Cut Costs ), more are turning now to defined contribution plans, with some suspending match contributions altogether (see J. Crew Cost Cutting Clips 401(k) Match ) and others adjusting matching contribution rates (see FL Health System Opts to Keep Matching but at Lower Rate ).