Shares of Talbots Inc., the women's clothing department store, plunged more than 30 percent on Wednesday, a day after the company announced it had lost $265 million in credit.

Talbots plunged $3.65, or 28 percent, to $9.20 at 12:54 p.m. in New York Stock Exchange composite trading, the biggest drop since it went public 14 years ago.

In a regulatory filing released Tuesday, the apparel company said it had been informed last week by two banks - HSBC and Bank of America - that the lenders would discontinue its credit lines to the retailer.

Bank of America informed it on April 7 said it would not replace its credit agreement that expired on February 23, and canceled new drawings made under the previous credit facility. Bank of America had previously allowed the retailer to use letters of credit under terms of the expired agreement.

HSBC had provided $135 million credit limit, while Bank of America had provided $130 million.

Bottom line is that Talbots is likely to see its operations hurt and/or financing more expensive; we would expect a hit to cash and earnings, Oppenheimer analyst Roxanne Meyer said in a research note.

It also raises concerns as to the ability of Talbots to access capital to finance future growth, which in part is dependent on Talbots' ability to improve fundamentals, he said.

The Hingham, Massachusetts-based company said in the filling that it has been approved for an $18 million extension of credit provided by Mizuho Corporate Bank Ltd.

Talbots reported a $171 million loss in the fourth quarter that ended Feb. 2, 2008. Annual sales growth may be 4 percent by 2010 after an increase of 3 percent this year, the company said earlier this month.