<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES AND EXCHANGE
ACT OF 1934
FOR THE TRANSITION PERIOD FROM _______________________ TO _____________________
Commission file number: 1-12552
THE TALBOTS, INC. RETIREMENT SAVINGS VOLUNTARY PLAN
(Title of the Plan)
THE TALBOTS, INC.
(Issuer of the securities held)
Delaware 41-1111318
-------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
175 Beal Street, Hingham, Massachusetts 02043
------------------------------------------- ----------------------
(Address of principal executive offices) (Zip Code)
(781) 749-7600
---------------------------------------------------
(Registrant's telephone number, including area code)
1
<PAGE> 2
THE TALBOTS, INC.
RETIREMENT SAVINGS VOLUNTARY PLAN
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
INDEPENDENT AUDITORS' REPORT...................................................................................3
FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED
DECEMBER 31, 1997 AND 1996:
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION...................................4
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND
INFORMATION.........................................................................................5
NOTES TO FINANCIAL STATEMENTS..........................................................................6-8
SUPPLEMENTAL SCHEDULES AS OF AND FOR THE YEAR ENDED
DECEMBER 31, 1997:
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES............................................9-14
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS..........................................................15
SIGNATURE PAGE................................................................................................16
EXHIBIT 1 -- INDEPENDENT AUDITORS' CONSENT....................................................................17
</TABLE>
Schedules required under the Employee Retirement Income Security Act of
1974, other than the schedules listed above, are omitted because of the
absence of the conditions under which the schedules are required.
2
<PAGE> 3
INDEPENDENT AUDITORS' REPORT
Trustees of The Talbots, Inc.
Retirement Savings Voluntary Plan:
We have audited the accompanying statements of net assets available for
benefits, with fund information, of The Talbots, Inc. Retirement Savings
Voluntary Plan (the "Plan") as of December 31, 1997 and 1996, and the related
statements of changes in net assets available for benefits, with fund
information, for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31, 1997
and 1996, and the changes in net assets available for benefits for the years
then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
Table of Contents are presented for the purpose of additional analysis and are
not a required part of the basic financial statements, but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The fund information in the statements of net assets available for
benefits and the statements of changes in net assets available for benefits is
presented for purposes of additional analysis rather than to present the net
assets available for benefits and changes in net assets available for benefits
for each fund. These schedules are the responsibility of the Plan's management.
The supplemental schedules and fund information have been subjected to the
auditing procedures applied in our audits of the basic financial statements and,
in our opinion, are fairly stated in all material respects when considered in
relation to the basic financial statements taken as a whole.
/s/ DELOITTE & TOUCHE LLP
---------------------
Boston, Massachusetts
June 16, 1998
3
<PAGE> 4
<TABLE>
<CAPTION>
THE TALBOTS, INC.
RETIREMENT SAVINGS VOLUNTARY PLAN
- ----------------------------------------------------------------------------------------------------
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1997 AND 1996
- ----------------------------------------------------------------------------------------------------
1997
--------------------------------------------------------------------
FUND INFORMATION
------------------------------------------------------
FIXED INCOME EQUITY TALBOTS STOCK BALANCED
FUND FUND FUND FUND TOTAL
------------ ------ -------------- -------- -----
ASSETS:
<S> <C> <C> <C> <C> <C>
Investments, at fair value:
Participant loans $ 1,739,787 $ - $ - $ - $ 1,739,787
Other 9,685,039 28,254,226 4,355,440 12,837,626 55,132,331
----------- ------------ ---------- ----------- -----------
Total Investments 11,424,826 28,254,226 4,355,440 12,837,626 56,872,118
Receivables:
Employer contributions
receivable 76,295 266,520 56,653 120,485 519,953
Due from broker for
investments sold - 504,631 - - 504,631
Dividends and interest
receivable 42 53,927 77 75,648 129,694
Other receivable - 812 - - 812
----------- ----------- ---------- ----------- -----------
Total assets 11,501,163 29,080,116 4,412,170 13,033,759 58,027,208
LIABILITIES:
Payable for investments
purchased - 417,045 - - 417,045
Accrued management fee 8,593 68,872 4,298 39,393 121,156
----------- ----------- ---------- ----------- -----------
Total liabilities 8,593 485,917 4,298 39,393 538,201
----------- ----------- ---------- ----------- -----------
NET ASSETS AVAILABLE FOR
BENEFITS $11,492,570 $28,594,199 $4,407,872 $12,994,366 $57,489,007
=========== =========== ========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
1996
-------------------------------------------------------------------
FUND INFORMATION
------------------------------------------------------
FIXED INCOME EQUITY TALBOTS STOCK BALANCED
FUND FUND FUND FUND TOTAL
------------ ------ ------------- -------- -----
ASSETS:
<S> <C> <C> <C> <C> <C>
Investments, at fair value:
Participant loans $ 1,389,986 $ - $ - $ - $ 1,389,986
Other 8,835,904 20,937,923 6,593,455 9,193,081 45,560,363
----------- ----------- ---------- ---------- ----------
Total Investments 10,225,890 20,937,923 6,593,455 9,193,081 46,950,349
Receivables:
Employer contributions
receivable 88,366 233,983 82,894 113,596 518,839
Due from broker for
investments sold - - - - -
Dividends and interest
receivable - 34,895 163 56,799 91,857
Other receivable - - - - -
----------- ----------- ---------- ---------- ----------
Total assets 10,314,256 21,206,801 6,676,512 9,363,476 47,561,045
LIABILITIES:
Payable for investments
purchased - - - - -
Accrued management fee 2,780 34,922 1,666 26,647 66,015
----------- ----------- ---------- ---------- ----------
Total liabilities 2,780 34,922 1,666 26,647 66,015
----------- ----------- ---------- ---------- ----------
NET ASSETS AVAILABLE FOR
BENEFITS $10,311,476 $21,171,879 $6,674,846 $9,336,829 $47,495,030
=========== =========== ========== ========== ===========
</TABLE>
See notes to financial statements.
4
<PAGE> 5
<TABLE>
<CAPTION>
THE TALBOTS, INC.
RETIREMENT SAVINGS VOLUNTARY PLAN
- -----------------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
- -----------------------------------------------------------------------------------------------------------------------------------
1997
------------------------------------------------------------------
FUND INFORMATION
---------------------------------------------------------
FIXED INCOME EQUITY TALBOTS STOCK BALANCED
FUND FUND FUND FUND TOTAL
------------ ------ ------------- ---------- -----
<S> <C> <C> <C> <C> <C>
ADDITIONS:
Transfers $ (41,322) $ 367,689 $ (629,376) $ 303,009 $ -
Employer contributions 338,775 1,070,221 267,891 493,038 2,169,925
Employee contributions 1,016,532 3,043,405 868,808 1,395,776 6,324,521
Rollover contributions 3,387 25,498 335 25,370 54,590
Dividend and interest income 613,704 588,132 99,635 407,796 1,709,267
Net appreciation in fair
value of investments - 4,105,234 - 1,856,544 5,961,778 -
------------ ----------- ----------- ----------- -----------
Total additions 1,931,076 9,200,179 607,293 4,481,533 16,220,081
------------ ----------- ----------- ----------- -----------
DEDUCTIONS:
Benefit payments 704,464 1,503,036 329,445 715,609 3,252,554
Investment management fee 45,518 274,823 35,325 108,387 464,053
Net depreciation in fair
value of investments - - 2,509,497 - 2,509,497
------------ ----------- ----------- ----------- -----------
Total deductions 749,982 1,777,859 2,874,267 823,996 6,226,104
------------ ----------- ----------- ----------- -----------
INCREASE (DECREASE) 1,181,094 7,422,320 (2,266,974) 3,657,537 9,993,977
NET ASSETS AVAILABLE
FOR BENEFITS:
BEGINNING OF YEAR 10,311,476 21,171,879 6,674,846 9,336,829 47,495,030
------------ ----------- ----------- ----------- -----------
END OF YEAR $ 11,492,570 $28,594,199 $ 4,407,872 $12,994,366 $57,489,007
============ =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
1996
-----------------------------------------------------------------
FUND INFORMATION
-----------------------------------------------------
FIXED INCOME EQUITY TALBOTS STOCK BALANCED
FUND FUND FUND FUND TOTAL
------------ ------- ------------- -------- ------
<S> <C> <C> <C> <C> <C>
ADDITIONS:
Transfers $ (499,338) $ 1,136,880 $(1,081,289) $ 443,747 $ -
Employer contributions 384,307 892,476 362,311 441,590 2,080,684
Employee contributions 1,230,640 2,379,781 1,138,886 1,234,008 5,983,315
Rollover contributions 12,960 28,171 21,013 12,191 74,335
Dividend and interest income 568,043 484,992 81,074 290,942 1,425,051
Net appreciation in fair
value of investments - 4,120,058 - 1,065,390 5,185,448
------------ ----------- ----------- ---------- -----------
Total additions 1,696,612 9,042,358 521,995 3,487,868 14,748,833
------------ ----------- ----------- ---------- -----------
DEDUCTIONS:
Benefit payments 1,090,421 845,950 328,358 409,139 2,673,868
Investment management fee 13,034 125,433 9,164 56,156 203,787
Net depreciation in fair
value of investments - - 117,729 - 117,729
------------ ----------- ----------- ---------- -----------
Total deductions 1,103,455 971,383 455,251 465,295 2,995,384
------------ ----------- ----------- ---------- -----------
INCREASE (DECREASE) 593,157 8,070,975 66,744 3,022,573 11,753,449
NET ASSETS AVAILABLE
FOR BENEFITS:
BEGINNING OF YEAR 9,718,319 13,100,904 6,608,102 6,314,256 35,741,581
------------ ----------- ----------- ---------- -----------
END OF YEAR $ 10,311,476 $21,171,879 $ 6,674,846 $9,336,829 $47,495,030
============ =========== =========== ========== ===========
</TABLE>
See notes to financial statements.
5
<PAGE> 6
THE TALBOTS, INC.
RETIREMENT SAVINGS VOLUNTARY PLAN
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The following brief description of The Talbots, Inc. Retirement Savings
Voluntary Plan (the "Plan") is to provide general information only.
Participants should refer to the Plan document for more complete
information.
GENERAL INFORMATION - The Plan is a defined contribution 401(k) plan
established by The Talbots, Inc. (the "Company") on January 1, 1989 and
amended and restated effective as of November 1, 1993 for the employees of
the Company. The Plan replaced the General Mills VIP Program which was
discontinued on June 27, 1988. Employees are eligible to participate on the
January 1, April 1, July 1 or October 1 coincident with or next following
completion of one year of service and attainment of age 21. State Street
Bank and Trust Company serves as trustee of the Plan. Watson Wyatt
Worldwide serves as the record keeper for the Plan. The Plan is subject to
the provisions of the Employee Retirement Income Security Act of 1974
("ERISA").
PARTICIPATION - Once an employee becomes eligible to participate in the
Plan, he/she may elect to become a participant by entering into a
compensation reduction authorization agreement. This agreement provides that
the participant accepts a reduction in compensation in an amount equal to 1%
to 15% of his/her compensation. The maximum employee deferral is the lesser
of 15% of the participant's compensation or $9,500 (for 1997) indexed for
inflation in accordance with the Internal Revenue Code.
CONTRIBUTIONS - During each Plan year, the Company makes matching
contributions. The Company will determine each quarter the rate at which the
matching contribution, if any, will be made. The Company matching
contribution for the periods covered by these financial statements was 50%
of the employee contribution up to 6% of the employee compensation.
Participants must be employed as of the last day of the quarter and have
made Plan contributions in order to receive a matching contribution.
VESTING - All employee contributions are 100% vested. Company contributions
vest 20% after each year of service. Forfeitures are reallocated on a pro
rata basis to active participants, as employer contributions, based on the
participant's compensation.
BENEFIT ARRANGEMENTS - The Plan provides for the payment of a participant's
account balance to participants who have reached the later of the normal
retirement age of 65 or who have completed 5 years of vesting service. A
Participant may also choose to withdraw their vested account balance upon
attainment of the early retirement age, or age 59 1/2. If the participant's
service with the Company terminates other than by reason of retirement, the
participant may elect to receive his/her vested account balance as soon as
possible following termination of employment. Distributions will
6
<PAGE> 7
1. DESCRIPTION OF THE PLAN (continued)
be made in a lump sum, provided that no payment may be made without the
participant's consent before his/her normal or early retirement age, if such
payment would be in excess of $3,500.
INVESTMENT OPTIONS - Employee and employer contributions are invested in the
following options:
Fixed Income Fund - Funds are invested in the Fidelity Managed Income
Portfolio. The fixed income fund also includes participant loans.
Equity Fund - Funds are invested in common stock, with residual amounts
invested in a short-term investment fund.
Talbots Stock Fund - Funds are invested in Talbots, Inc. common stock,
with residual amounts invested in a short-term investment fund.
Balanced Fund - Funds are invested in fixed income securities, corporate
debt and common stock, with remaining amounts invested in a short-term
investment fund.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The financial statements of the Plan are prepared on
the accrual basis of accounting. Purchases and sales of securities are
recorded on the trade date basis. Interest income is recorded on the accrual
basis. Dividends are recorded on the ex-dividend date on the accrual basis.
VALUATION OF INVESTMENTS - The investments of the Plan are stated at fair
value. Fair values of other investments were determined by closing prices
for those securities traded on national stock exchanges, at the average of
bid and ask quotations for those securities traded in the over-the-counter
market and at fair value as determined by the trustee for any restricted
securities. Participant loans are recorded at cost, which approximates fair
value.
BENEFIT PAYMENTS - Benefit payments to participants are recorded when paid.
As of December 31, 1997, $501,250 has been allocated to accounts of persons
who elected to withdraw from the Plan, but have not yet been paid.
ADMINISTRATIVE PLAN EXPENSES - Most expenses incurred in administering the
Plan, including those necessary for the administration of the Trust, are
paid out of the principal or income of the Trust unless paid by the Company
at its sole discretion. For the years ended December 31, 1997 and 1996, the
Company did not pay any material administrative expenses of the Plan.
Investment management fees incurred by the funds are paid out of the assets
of the individual funds. In the case of the Fixed Income Fund, such expenses
are recorded as an offset to income.
ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles requires the plan administrator to
make estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results may differ from those estimates.
RECLASSIFICATIONS - Certain reclassifications have been made to the December
31, 1996 financial statements to conform with the December 31, 1997
presentation.
7
<PAGE> 8
3. INVESTMENTS
Investments that represent 5% or more of net assets available for benefits
at December 31, 1997 and 1996 were as follows:
IDENTITY OF ISSUE 1997 1996
----------------- ---- ----
United States Treasury Notes (various
interest rates and maturities) $3,383,894 -
State Street Short Term Investment 3,786,277 -
Fidelity Managed Income Portfolio 9,685,039 $8,835,904
The Talbots, Inc. Common Stock 4,301,280 6,568,828
During 1997 and 1996, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated in
value by $3,452,281 and $5,067,719, respectively, as follows:
NET
---
APPRECIATION/(DEPRECIATION)
---------------------------
1997 1996
---- ----
At Fair Value:
Government Notes and Bonds $ 37,459 ($ 42,156)
Corporate Notes and Bonds 5,549 (10,768)
Common Stock 3,409,273 5,120,643
---------- ----------
Total $3,452,281 $5,067,719
========== ==========
4. PLAN TERMINATION
In the event of termination of the Plan, or complete discontinuance of
contributions thereto by the Company, the rights of all employees shall be
fully vested and nonforfeitable. Following termination of the Plan, subject
to reasonable administrative delays, all benefits under the Plan shall be
paid in conformity with the standard benefit distribution policies of the
Plan.
5. TAX STATUS OF THE PLAN
The Plan obtained a favorable determination letter in 1995 in which the
Internal Revenue Service stated that the Plan as then designed was in
compliance with the applicable requirements of the Internal Revenue Code
(the "Code"). The Plan administrator believes that the Plan is currently
designed and being operated in compliance with the applicable requirements
of the Code. Accordingly, no provision for income taxes has been included in
the Plan's financial statements.
8
<PAGE> 9
<TABLE>
<CAPTION>
RETIREMENT SAVINGS VOLUNTARY PLAN
- ------------------------------------------------------------------------------------------------------------------------------------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
(c) UNITS/ (e) CURRENT
(a) (b) IDENTITY OF ISSUE SHARES (d) COST VALUE
- ------------------------------------- ---------- --------- -----------
<S> <C> <C>
FIXED INCOME FUND
=================
*Participant Loans --- $1,739.787 $1,739,787
(ranging from 7.0% to 10.0% interest
rates; various maturity dates through
July 1, 2007)
---------- ----------
TOTAL PARTICIPANT LOANS 1,739,787 1,739,787
---------- ----------
REGISTERED INVESTMENT COMPANY
Fidelity Managed Income Portfolio 9,685,039 9,685,039 9,685,039
---------- ----------
TOTAL REGISTERED INVESTMENT COMPANY 9,685,039 9,685,039
---------- ----------
TOTAL FIXED INCOME FUND 11,424,826 11,424,826
---------- ----------
EQUITY FUND
===========
SHORT TERM INVESTMENT FUND
* State Street Short Term Investment Fund 3,786,277 3,786,277 3,786,277
---------- ----------
TOTAL SHORT TERM INVESTMENT FUND 3,786,277 3,786,277
---------- ----------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCK
Allegiance Corp 23,500 400,672 832,781
Chris Craft Inds Inc 14,665 524,312 767,163
Conseco Inc 28,124 483,195 1,277,884
Cyprus Amax Minerals Co 24,600 610,339 378,225
Duke Rlty Invts Inc 33,000 495,717 800,250
EEX Corp 47,140 407,778 427,206
Elcor Chem Corp 17,850 275,239 428,400
Federal Home Loan Mtg Corp 23,800 436,986 998,112
Fleetwood Enterprises Inc 22,400 564,565 950,600
Healthcare Rlty Tr 16,400 459,395 474,575
Hollinger International Inc 21,200 295,422 296,800
LTV Corp New 47,100 607,258 465,113
MBIA Inc 17,000 638,610 1,135,813
New England Elec Sys 19,900 683,606 850,725
Nucor Corp 17,200 820,093 830,975
OM Group Inc 19,900 411,761 728,837
Parker Drilling Co 56,900 361,202 693,469
Penncorp Finl Group Inc 17,100 541,031 610,256
Pinnacle West Cap Corp 15,000 411,225 635,625
</TABLE>
9
<PAGE> 10
<TABLE>
<CAPTION>
RETIREMENT SAVINGS VOLUNTARY PLAN
- ------------------------------------------------------------------------------------------------------------------------------------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
(c) UNITS/ (e) CURRENT
(a) (b) IDENTITY OF ISSUE SHARES (d) COST VALUE
- ---------------------------- ---------- ---------- -----------
<S> <C> <C> <C>
Reinsurance Group Amer Inc 13,350 287,194 568,210
Santa Fe Energy Res Inc 28,100 161,439 316,125
Sbarro Inc 13,700 366,909 360,481
Seagate Technology 14,200 359,323 273,350
Security Cap Group Inc 1,582 12,458 8,305
Security Cap Pac Tr 30,857 668,611 752,139
Southdown Inc 8,600 210,727 507,400
SunAmerica Inc 17,850 238,136 763,088
Tidewater Inc 15,300 488,668 847,238
Travelers Group Inc 10,646 286,759 573,553
Trigon Healthcare Inc 23,600 560,267 616,550
Triton Energy LTD 27,600 1,191,188 805,575
Trizec Hahn Corp 40,700 598,192 943,731
UICI 13,600 311,185 474,300
Unifi Inc 14,700 415,331 598,106
United Dominion Rlty Tr Inc 28,600 448,072 398,613
Warnaco Group Inc 22,700 518,935 712,212
Washington Real Estate Invt Tr 20,000 321,793 335,000
Wellman Inc 26,800 577,974 522,600
Wellpoint Health Networks Inc 12,037 518,054 508,564
---------- ----------
TOTAL COMMON STOCK 17,969,621 24,467,949
---------- ----------
TOTAL EQUITY FUND 21,755,898 28,254,226
---------- ----------
TALBOTS STOCK FUND
==================
SHORT TERM INVESTMENT FUND
* State Street Short Term
Investment Fund 54,160 54,160 54,160
--------- --------
TOTAL SHORT TERM INVESTMENT FUND 54,160 54,160
--------- ---------
COMMON STOCK
* Talbots Inc 237,312 5,691,343 4,301,280
--------- ---------
TOTAL COMMON STOCK 5,691,343 4,301,280
--------- ---------
TOTAL TALBOTS STOCK FUND 5,745,503 4,355,440
--------- ---------
</TABLE>
10
<PAGE> 11
<TABLE>
<CAPTION>
RETIREMENT SAVINGS VOLUNTARY PLAN
- ------------------------------------------------------------------------------------------------------------------------------------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
(c) UNITS/ (e) CURRENT
(a) (b) IDENTITY OF ISSUE SHARES (d) COST VALUE
- -------------------------------- --------- -------- -----------
<S> <C> <C> <C>
BALANCED FUND
=============
SHORT TERM INVESTMENT FUND
* State Street Short Term Investment Fund 368,035 368,035 368,035
------- -------
TOTAL SHORT TERM INVESTMENT FUND 368,035 368,035
------- -------
FIXED INCOME
Fed Hm Ln Pc 25,248 26,557 26,146
(9.0%, 1/1/07)
Fed Hm Ln Pc 32,719 33,547 33,731
(8.0%, 8/1/17)
FNMA Pool 41,679 39,556 40,337
(6.0%, 4/1/24)
FNMA Pool 79,050 76,184 78,062
(6.5%, 10/1/27)
Federal Home Ln Mtg PC Gtd 85,000 82,676 84,761
(6.0%, 11/15/05)
Govt Natl Mtg Assn GTD Remic 90,000 90,661 90,731
(7.0%, 1/16/07)
United States Treasury Notes 75,000 81,094 79,512
(7.5%, 11/15/01)
United States Treasury Notes 30,000 30,239 30,230
(6.375%, 1/15/99)
United States Treasury Notes 20,000 19,849 20,453
(6.25%, 2/15/03)
United States Treasury Notes 300,000 301,031 300,186
(5.75%, 8/15/03)
United States Treasury Notes 500,000 501,562 501,330
(5.875%, 3/31/99)
United States Treasury Notes 575,000 586,372 585,241
(6.875%, 7/31/99)
United States Treasury Notes 350,000 363,398 362,961
(7.75%, 11/30/99)
United States Treasury Notes 175,000 191,242 181,809
(7.75%, 12/31/99)
United States Treasury Notes 100,000 105,788 104,000
(7.75%, 1/31/00)
United States Treasury Notes 260,000 260,138 263,250
(6.25%, 5/31/00)
United States Treasury Notes 300,000 295,547 300,375
(5.75%, 10/31/00)
</TABLE>
11
<PAGE> 12
<TABLE>
<CAPTION>
RETIREMENT SAVINGS VOLUNTARY PLAN
- ------------------------------------------------------------------------------------------------------------------------------------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
(c) UNITS/ (e) CURRENT
(a) (b) IDENTITY OF ISSUE SHARES (d) COST VALUE
- ------------------------------------- ---------- --------- -----------
<S> <C> <C> <C>
United States Treasury Notes 150,000 151,360 150,563
(6.25%, 6/30/98)
United States Treasury Notes 500,000 504,180 503,985
(6.25%, 5/31/99)
--------- ---------
TOTAL FIXED INCOME 3,740,981 3,737,663
--------- ---------
CORPORATE DEBT
Premier Auto Tr 85,000 84,954 85,106
(6.2%, 11/6/00)
Associates Corp North America 50,000 53,486 54,716
(7.75%, 2/15/05)
Bear Stearns Cos Inc 120,000 123,096 122,737
(7.625%, 9/15/99)
General Mtrs Accep Corp 125,000 125,772 125,616
(6.4%, 5/19/99)
U S West Cap Fdg Inc 40,000 40,000 40,393
(6.31%, 11/1/05)
Kimco Rlty Corp 65,000 65,000 68,420
(7.06%, 7/14/09)
Weingarten Rlty Invs Mtn 50,000 49,571 51,789
(6.9%, 11/24/08)
BellSouth Telecomm Inc 65,000 63,515 65,419
(5.85%, 11/15/45)
Federal Home Ln Bks 250,000 250,000 249,297
(5.955%, 12/30/99)
--------- ---------
TOTAL CORPORATE DEBT 855,394 863,493
--------- ---------
COMMON STOCK
Abbott Labs 1,500 96,090 98,250
Ace Ltd 1,400 83,734 135,100
Allmerica Finl Corp 1,000 31,810 49,938
American Express Co 1,400 54,047 124,950
American Greetings Corp 3,700 97,420 144,762
American Stores Co New 7,200 159,454 148,050
Ameritech Corp 2,500 152,587 201,250
Amoco Corp 1,100 79,266 93,637
Arrow Electrs Inc 1,400 42,084 45,412
AT&T Corp 4,000 151,590 245,250
BankAmerica Corp 1,000 65,905 73,000
Bankers Tr NY Corp 700 62,867 78,706
Bear Stearns Cos Inc 3,100 100,548 147,250
</TABLE>
12
<PAGE> 13
<TABLE>
<CAPTION>
RETIREMENT SAVINGS VOLUNTARY PLAN
- ------------------------------------------------------------------------------------------------------------------------------------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
(c) UNITS/ (e) CURRENT
(a) (b) IDENTITY OF ISSUE SHARES (d) COST VALUE
- -------------------------------- ---------- -------- -----------
<S> <C> <C> <C>
BellSouth Corp 2,800 88,809 157,675
Caterpillar Inc 2,600 98,228 126,100
Cendant Corp 3,605 91,590 123,910
Chase Manhattan Corp New 1,540 73,079 168,630
Chrysler Corp 4,700 121,648 165,381
Cigna Corp 800 86,948 137,900
Citicorp 1,500 189,465 189,656
CNF Transn Inc 2,700 113,900 104,625
Coastal Corp 900 27,054 55,744
Coca Cola Co 900 30,349 60,019
Computer Assoc Intl Inc 1,012 14,321 53,636
Continental Airls Inc 1,400 44,359 67,375
Dean Foods Co 1,900 102,951 113,525
Dell Computer Corp 1,000 101,310 84,000
Dole Food Inc 1,900 89,414 86,925
Eli Lilly & Co 2,800 181,993 194,950
General Electric Co 5,000 301,980 366,875
GPU Inc 1,500 48,340 63,188
GTE Corp 1,100 37,466 57,338
Hillenbrand Inds Inc 1,700 79,152 87,019
Intel Corp 2,300 54,583 161,575
International Business Machines 2,000 93,344 209,250
Johnson & Johnson 2,600 97,415 171,275
Lucent Technologies Inc 1,100 90,816 87,862
Marine Drilling Cos Inc 3,000 70,680 62,250
MCN Energy Group Inc 1,200 28,572 48,450
Merck & Co Inc 2,900 175,774 307,400
Microsoft Corp 1,100 82,899 142,175
MidAmerican Energy Hldgs Co 2,000 33,620 44,000
Mobil Corp 2,400 120,322 173,250
Northrop Grumman Corp 1,150 80,856 132,250
Owens Ill Inc 2,200 77,682 83,462
PacifiCorp 1,700 34,740 46,431
Pepsico Inc 2,700 82,796 97,875
Philip Morris Cos Inc 4,500 96,315 203,625
Phillips Pete Co 3,100 130,774 150,737
Premark Intl Inc 2,200 72,182 63,800
Quantum Corp 1,800 50,283 36,112
Reliance Group Hldgs Inc 6,100 78,904 86,163
Rohm & Haas Co 1,500 132,152 143,625
Royal Dutch Pete Co 2,100 64,016 113,794
</TABLE>
13
<PAGE> 14
<TABLE>
<CAPTION>
RETIREMENT SAVINGS VOLUNTARY PLAN
- ------------------------------------------------------------------------------------------------------------------------------------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
(c) UNITS/ (e) CURRENT
(a) (b) IDENTITY OF ISSUE SHARES (d) COST VALUE
- ------------------------- ---------- ------- -----------
<S> <C> <C> <C>
Safeskin Corp 1,700 81,277 96,475
Sara Lee Corp 3,100 91,864 174,569
SCI Sys Inc 2,800 132,118 121,975
Smith Intl Inc 1,200 78,222 73,650
Southtrust Corp 2,100 71,526 133,219
Textron Inc 800 28,024 50,000
Timken Co 2,300 80,782 79,062
Tricon Global Restaurants Inc 270 6,804 7,847
Unifi Inc 1,300 43,303 52,894
United Technologies Corp 600 23,643 43,688
United Video Satellite Group 2,300 61,826 66,125
USG Corp 1,400 47,859 68,600
USX U S Stl Group 3,700 141,078 115,625
Valero Energy Corp 2,400 78,144 75,450
Witco Corp 2,300 101,625 93,869
---------- ---------
TOTAL COMMON STOCK 5,916,578 7,868,435
---------- ---------
TOTAL BALANCED FUND 10,880,988 12,837,626
---------- ----------
TOTAL INVESTMENTS $49,807,215 56,872,118
=========== ==========
* Party-in-interest
</TABLE>
14
<PAGE> 15
<TABLE>
<CAPTION>
THE TALBOTS, INC.
RETIREMENT SAVINGS VOLUNTARY PLAN
- ------------------------------------------------------------------------------------------------------------------------------------
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
(a) IDENTITY (c) PURCHASE (d) SELLING (g) COST OF
OF PARTY INVOLVED (b) DESCRIPTION OF ASSETS PRICE PRICE ASSET
- --------------------- --------------------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Series of Transactions
- -----------------------------------
State Street Bank and Trust Company Short Term Investment Fund $7,433,630 $ - $ 7,433,630
7,275,181 7,275,181
</TABLE>
<TABLE>
<CAPTION>
(h) CURRENT VALUE
OF ASSET ON (i) NET GAIN
TRANSACTION DATE OR (LOSS)
------------------- --------------
<S> <C>
$ 7,433,630 $ -
7,275,181 -
</TABLE>
15
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees have duly caused this report to be signed on its behalf by the
undersigned.
THE TALBOTS, INC. RETIREMENT SAVINGS
VOLUNTARY PLAN
Dated: June 29, 1998 PLAN ADMINISTRATOR
By Administrative Committee
By: /s/ RICHARD T.O'CONNELL, JR.
-------------------------------------
Richard T.O'Connell, Jr.
Administrative Committee Member
By: /s/ STUART M. STOLPER
-------------------------------------
Stuart M. Stolper
Administrative Committee Member
16
<PAGE> 1
Exhibit 1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
33-72086 of The Talbots, Inc. on Form S-8 of our report dated June 16, 1998
appearing in this Annual Report on Form 11-K of The Talbots, Inc.
Retirement Savings Voluntary Plan for the year ended December 31, 1997.
/s/ DELOITTE & TOUCHE LLP
---------------------
Boston, Massachusetts
June 29, 1998
17
