Talbots Takes Deep Discount on J.Jill

In a move not unlike one of its in-store promotions, Talbots(TLB) has been forced to take a deep discount to shed its J.Jill chain.

The women's apparel retailer announced on Monday that it has sold the suffering concept for about $75 million to private equity firm Golden Gate Capital.

The company has been searching for a buyer for sometime as it looks to focus its energy on turning around its core business.

Talbots originally purchased J. Jill, which caters to affluent older women, for about $517 million in February 2006.

Even then J.Jill was struggling, but Talbots thought it could be the company's knight in shining armor. Unfortunately, it could not take reign of its steed.

J. Jill operations hurt the company's 2008 earnings by $70 million and drained the company of more than $80 million in cash over the last three years, not including the original purchase price.

Golden Gate will receive all inventory and 204 of the company's 279 stores. Talbots will close the remaining 75 stores within the next 60 days.

But these leftovers could still be a substantial drag on the company. Talbots will have to negotiate lease settlements with landlords, which could be as costly, as the chain's average initial lease term is 10 years and the chain has a young store fleet, Stifel Nicolaus analyst Richard Jaffe said in a note on Monday.