DISTRESSED DAILY: Talbots Needs to Tighten Its Belt Before 2022

Talbots, the women’s clothing and accessory retailer, may be sliding toward a debt restructuring ahead of two large loan payments coming due next year.

Sales are falling, cash is shrinking and the capital structure is unsustainable, jeopardizing Talbots’ ability to pay its debts, S&P Global Ratings analyst Pasha Azadmard wrote in a report. The main problem: The pandemic discourages customers from going to events or anywhere else that might spur them to buy new clothing.

Talbots has been a holding since 2012 of Sycamore Partners, the private-equity firm with a track record of buying and reviving distressed ...