<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
HOUSE OF FABRICS, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARVIN S. MALTZMAN
HOUSE OF FABRICS, INC.
13400 RIVERSIDE DRIVE
SHERMAN OAKS, CALIFORNIA 91423-2598
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
(4) Proposed maximum aggregate value of transaction:
*Set forth the amount on which the filing fee is calculated and state how it was
determined.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:_________________________________________________
(2) Form, Schedule or Registration Statement No.:___________________________
(3) Filing Party:___________________________________________________________
(4) Date Filed:_____________________________________________________________
<PAGE>
HOUSE OF FABRICS, INC.
13400 RIVERSIDE DRIVE
LOGO SHERMAN OAKS, CALIFORNIA 91423-2598
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 22, 1994
----------------
TO THE STOCKHOLDERS OF HOUSE OF FABRICS, INC.
The Annual Meeting of Stockholders of HOUSE OF FABRICS, INC. (the "Company")
will be heldon June 22, 1994 at 10:30 A.M., Pacific Daylight Time, at the
Sportsmen's Lodge, Starlight Room,12833 Ventura Boulevard, Studio City,
California for the purpose of:
1. Electing two directors for three-year terms ending in 1997.
2. Ratifying the appointment of Deloitte & Touche as the Company's
independent auditors.
3. Transacting such other business as may properly come before the
meeting or any adjournments thereof.
Pursuant to the By-Laws, the Board of Directors has fixed the close of
business on April 25, 1994 as the time and date for the determination of
stockholders entitled to notice of, and to vote at, the meeting. Accordingly,
only stockholders of record on such date and at such time will be entitled to
vote at the meeting, notwithstanding the transfer of any stock on the books of
the Company thereafter.
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE REQUESTED
TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE.
A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES.
By Order of the Board of Directors,
MARVIN S. MALTZMAN
Secretary
Sherman Oaks, California
May 16, 1994.
<PAGE>
HOUSE OF FABRICS, INC.
13400 RIVERSIDE DRIVE
SHERMAN OAKS, CALIFORNIA 91423-2598
----------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 22, 1994
----------------
SOLICITATION OF PROXIES
The accompanying proxy is solicited by and on behalf of the Board of
Directors of the Company for use only at the Annual Meeting of Stockholders to
be held on June 22, 1994 and at any and all adjournments thereof. The shares
represented by the proxies received will be voted at the meeting in accordance
with the directions contained in the proxies. Any stockholder giving a proxy
may revoke it at any time prior to its use by filing with the Secretary of the
Company a written revocation of the proxy or another proxy bearing a later
date, or if, personally present at the meeting, by electing to vote in person.
The costs of solicitation of proxies will be borne by the Company. Directors,
officers and other employees of the Company may, without additional
compensation (except for customary overtime pay, when applicable), solicit
proxies by mail, in person or by telecommunication. The Company will reimburse
brokers, fiduciaries, custodians and other nominees for reasonable out-of-
pocket expenses incurred in sending this Proxy Statement and other proxy
materials to, and obtaining instructions relating to such materials from,
beneficial owners of its stock. If the Board of Directors determines it is
advisable it may employ the services of individuals or companies for
solicitation of proxies.
VOTING RIGHTS
All voting rights are vested exclusively in the holders of the common stock
of the Company. Stockholders of record at the close of business on April 25,
1994 are eligible to vote on all matters presented to the meeting and are
entitled to one vote (except as set forth under "Election of Directors") for
each share of stock held of record on the record date. As of April 25, 1994
there were 13,697,107 shares of common stock outstanding. A majority of the
outstanding shares constitutes a quorum for the transaction of business at the
meeting.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth the number of common shares beneficially owned
on January 31, 1994 by (i) owners of more than five percent of outstanding
common stock, based solely on schedules 13G filed by such beneficial owners
with the Securities and Exchange Commission; (ii) each Director or Nominee for
Director, (iii) each of the Executive Officers named in the Summary
Compensation Table at page 5; and(iv) all Directors, Nominees and Executive
Officers as a group. All individuals listed in the table have sole voting and
investment power over the shares reported as owned, except as otherwise stated.
<TABLE>
<CAPTION>
SHARES OPTION
BENEFICIALLY SHARES PERCENTAGE
OWNED, EXERCISABLE OF
EXCLUDING WITHIN OUTSTANDING
NAME OPTIONS 60 DAYS SHARES
---- ------------ ----------- -----------
<S> <C> <C> <C>
Franklin Resources, Inc. ............. 892,227 -0- 6.5%
777 Mariners Island Boulevard
San Mateo, California 94404
State of Wisconsin Investment Board... 1,241,200 -0- 9.1%
P.O. Box 7842
Madison, Wisconsin 53707
Donald R. Ardemagni................... 6,000 9,332 (1)
Daniel Greenberg...................... 1,000 833 (1)
Gary L. Larkins....................... 15,340 246,000 1.9%
Peter J. Lynch........................ -0- -0- -0-
Marvin S. Maltzman.................... 3,250 76,000 (1)
James J. McMorrow..................... 6,000 19,000 (1)
Phillip G. Samovar.................... 10,000 1,666 (1)
Barney Sofro.......................... 791,308(2) 196,000 7.2%
All Directors, Nominees and Executive
Officers as a Group (21)............. 845,502 837, 664 12.3%
</TABLE>
- - --------
(1) Less than 1%.
(2) Includes 28,441 shares held of record by Barney Sofro's wife, Victoria Ann
Sofro, and 177,829 shares held by Barney Sofro as custodian for his three
children under the California Uniform Gifts to Minors Act.
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation and By-Laws provide that there are
ten (10) authorized directors divided into three classes. Two directors are to
be elected at this meeting to serve for a three-year term expiring at the
Company's annual meeting in 1997 or until a successor is duly elected and
qualified. Proxies may not be voted for more than the two nominees. There
currently are four vacancies on the Board of Directors. The Board of Directors
does not intend to fill any vacancies at this time. The election will be
conducted under cumulative voting procedures. Accordingly, each stockholder
will be entitled to cast a vote for each share of stock entitled to vote as of
the record date, and such vote may be cast for a single nominee or, distributed
among any or all of the nominees as such stockholder chooses. All proxies will
be voted for the election of the nominees listed below in the discretion of the
proxy if no direction to the contrary is given. In the event a nominee is
unable or declines to serve, the proxies may be voted for the election of a
substitute nominee. The Company knows of no reason to anticipate that any
nominee will decline or refuse to serve.
2
<PAGE>
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" DANIEL
GREENBERG AND JAMES J. MCMORROW AS DIRECTORS TO HOLD OFFICE UNTIL THE 1997
ANNUAL MEETING OF STOCKHOLDERS AND UNTIL THEIR SUCCESSORS ARE ELECTED AND
QUALIFIED. PROXIES RECEIVED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY IN THEIR PROXY A CONTRARY CHOICE.
INFORMATION CONCERNING NOMINEES AND DIRECTORS
NOMINEES FOR ELECTION AT THE 1994 ANNUAL MEETING
CLASS III DIRECTORS WITH TERM EXPIRING IN 1997
Daniel Greenberg (52) is the Chairman and Chief Executive Officer of Electro
Rent Corporation. He has been a Director since 1992.
James J. McMorrow (66) is the senior partner of the Foristall Company which is
a financial relations firm. He also serves on the Board of Directors of
Electro Rent Corporation, Farr Company, Superior Industries International,
Inc., Wyle Laboratories and is a Trustee and Secretary at the University of
San Diego. He has been a Director since 1975.
INCUMBENT DIRECTORS WHOSE TERMS EXPIRE SUBSEQUENT TO THE 1994 ANNUAL MEETING
CLASS I DIRECTORS WITH TERM EXPIRING IN 1995
Marvin S. Maltzman (57) has been the Senior Vice President--Administration,
Secretary and General Counsel since 1993. From 1982 to 1993 he was Vice
President, Secretary and General Counsel. He has been a Director since 1991.
Barney Sofro (52) has been the Chairman of the Board since 1986. He has been a
Director since 1970.
CLASS II DIRECTORS WITH TERM EXPIRING IN 1996
Gary L. Larkins (51) has been the President and Chief Executive Officer since
1986. He has been a Director since 1978.
Phillip G. Samovar (51) is an attorney engaged in the private practice of law.
He has been a Director since 1992.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
During the fiscal year ended January 31, 1994, the Board of Directors held
five meetings and acted by written consent on two occasions. All of the
directors attended at least 75% of the aggregate number of Board and Board
Committee meetings on which they served.
The Company has an Executive Committee currently composed of Barney Sofro,
Chairman, and Gary L. Larkins. Between meetings of the Board of Directors, the
Executive Committee has all powers which may be delegated to it under Delaware
law. Actions taken by the Executive Committee are subsequently presented for
ratification at the next meeting of the full Board of Directors. The Executive
Committee acted twice in fiscal 1994 by written consent.
3
<PAGE>
The Company's Audit Committee is currently composed of James J. McMorrow,
Chairman, Daniel Greenberg, and Phillip G. Samovar. The primary function of the
committee is to recommend to the Board of Directors the firm of independent
public accountants to be selected as auditors for the year and to consult with
the accountants regarding the scope of their engagement, the audit report and
management letter issued upon the completion of their examination and the
adequacy of the Company's internal accounting controls. The committee also
provides an independent forum for open and candid discussions concerning the
Company's financial statements and related disclosures and the adoption and
review of accounting policies and procedures. While the committee is concerned
with the accuracy and completeness of the Company's financial statements and
matters relating thereto, the committee's role is not designed to provide
stockholders or others with any special assurances with regard thereto, nor
involve the review (in any sense of professional evaluation) of the quality of
the Company's independent audit. It is believed that the committee's activities
serve a useful function in providing ongoing oversight on behalf of the Board
of Directors, but they in no way alter the traditional roles and
responsibilities of the Company's management and independent public accountants
with respect to the accounting and control functions and the financial
statements presentation. The Audit Committee met three times in fiscal 1994.
The Company's Compensation Committee is currently composed of Daniel
Greenberg, Chairman, James J. McMorrow, and Phillip G. Samovar. The committee
is primarily responsible for the review and recommendation of officers'
salaries, bonuses and other forms of compensation and for the periodic review
and evaluation of new and existing forms of employee benefit programs. The
members also serve as the Stock Option Committee of the Compensation Committee
and are responsible for the administration of the Stock Option Plan and to make
recommendations to the Board of Directors regarding stock option awards. The
Compensation Committee and the Stock Option Committee met twice in fiscal 1994.
The Company does not have a Nominating Committee.
Directors who are not employees of the Company are compensated for their
services. Each such director received an annual fee of $7,800, plus $2,500 for
each committee chairmanship held, and a meeting fee of $800 for each board or
committee meeting attended. Directors who are employees of the Company do not
receive any additional compensation for their services as a director. During
fiscal year ended January 31, 1994 the Foristall Company, of which Mr. McMorrow
is a partner, received $36,000 for financial relations services performed for
the Company.
4
<PAGE>
EXECUTIVE COMPENSATION
The information in the Summary Compensation Table sets forth the compensation
paid to the Chief Executive Officer and the four most highly compensated
executive officers at the end of the last completed fiscal year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
---------------------------- -------------
FISCAL OTHER
YEAR ANNUAL SECURITIES
NAME AND PRINCIPAL ENDED COMPENSATION UNDERLYING
POSITION JANUARY 31 SALARY BONUS(1) (2)(3) STOCK OPTIONS
- - ------------------ ---------- -------- -------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Gary L. Larkins 1994 $229,525 $ -0- $26,856(4) 15,000
President and 1993 $230,004 $ 32,257 $62,210 -0-
Chief Executive Officer 1992 $216,986 $173,272 46,000
Barney Sofro 1994 $139,234 -0- $15,765(4) 15,000
Chairman of the Board 1993 $140,004 $ 32,257 $42,449 -0-
1992 $132,503 $153,935 46,000
Peter J. Lynch (5) 1994 $133,718 $ 30,000 -0- 9,500
Executive Vice Presi-
dent--Finance 1993 $ 64,167 $ 30,000 -0- 25,000
and Administration
Donald R. Ardemagni 1994 $125,248 $ -0- $12,987(4) 3,500
Executive Vice Presi-
dent--Buying 1993 $125,508 $ 24,193 $37,537 -0-
1992 $122,506 $129,957 14,000
Marvin S. Maltzman 1994 $113,261 $ -0- $ 9,715(4) 3,500
Senior Vice President--
Administration 1993 $113,496 $ 9,677 $21,717 -0-
Secretary and General
Counsel 1992 $111,246 $ 46,181 8,000
</TABLE>
- - --------
(1) Bonuses are accrued during a fiscal year but paid in the next fiscal year.
(2) In accordance with the transitional provision of the Securities and
Exchange Commission ("SEC") rules, the Company has not provided information
in this column for any fiscal year which ended prior to January 31, 1992.
(3) The aggregate value of the perquisites and other personal benefits received
by each named executive is not reflected because the amount was below the
reporting threshold.
(4) The Company adopted a Qualified Profit Sharing Plan (the "Qualified Plan")
in 1970 which is designed to encourage long range savings, to meet
financial emergencies and retirement needs. The Qualified Plan covers full-
time employees twenty-one years of age who have been employed by the
Company for at least twelve months. An employee may contribute up to a
maximum of 16% of monthly earnings. The Company, subject to its
profitability, will match 1% for each year of employment up to a maximum of
6%. The Company also makes an excess contribution of 5.7% of the amount by
which each participant's annual compensation exceeds the maximum taxable
wage base of the Social Security Act. In 1990, the Company adopted a Non-
Qualified Profit Sharing Plan (the "Non Qualified Plan") for all highly
compensated officers and employees ("HCG") of the Company. The HCG is no
longer eligible to participate in the Qualified Plan. The Non-Qualified
Plan has the same basic terms and conditions as the Qualified Plan, except
that participation in the Non-Qualified Plan is limited to the HCG. The
Non-Qualified Plan is designed to offer the HCG the same benefits as
afforded under the Qualified
5
<PAGE>
Plan. The amounts in this column include: (a) the Company's matching
contributions to the Non-Qualified Plan as follows: Gary L. Larkins--
$17,537; Barney Sofro--$10,295; Peter J. Lynch $-0-; Donald R. Ardemagni--
$8,480, and Marvin S. Maltzman--$6,344, and (b) an amount for income tax
reimbursement which results from Company contributions made to each
employee's account for the calendar year ended January 31, 1994. The
amounts paid were Gary L. Larkins--$9,319; Barney Sofro-- $5,471; Peter J.
Lynch -0-; Donald R. Ardemagni--$4,506 and Marvin S. Maltzman--$3,371.
(5) Peter J. Lynch commenced his employment with the Company on August 17, 1992
and resigned on December 16, 1993. At the time of his resignation an
agreement was entered into whereby, in consideration for his entering into
a general release of all claims against the Company, he received four
months of additional compensation totalling $46,667, his Company
automobile, and four months of additional health insurance.
The following information is furnished for the fiscal year ended January 31,
1994 with respect to the Chief Executive Officer and the four most highly
compensated executive officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERCENTAGE POTENTIAL REALIZABLE
NUMBER OF OF TOTAL VALUE AT ASSUMED
SECURITIES OPTIONS GRANTED STOCK APPRECIATION
UNDERLYING TO EMPLOYEES EXERCISE FOR OPTION TERM
OPTIONS IN FISCAL PRICE EXPIRATION ---------------------
GRANTED YEAR ($/SHARE) DATE 5%($) 10%($)
---------- --------------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Gary L. Larkins......... 15,000 11.6% 10.75 5/26/03 262,650 418,200
Barney Sofro............ 15,000 11.6% 10.75 5/26/03 262,650 418,200
Peter J. Lynch.......... 9,500 7.3% 10.75 5/26/03 166,345 264,860
Donald R. Ardemagni..... 3,500 2.7% 10.75 5/26/03 61,285 97,580
Marvin S. Maltzman...... 3,500 2.7% 10.75 5/26/03 61,285 97,580
</TABLE>
Each option was granted for a term of ten years at 100% of market value on
the date of grant. The options vest over a three year period so that one third
of the grant is vested at May 25, 1994, two thirds at May 25, 1995 and 100% of
the options are fully vested at May 25, 1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SHARES SECURITIES UNDERLYING VALUE OF UNEXERCISED
ACQUIRED UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
ON VALUE AS OF JANUARY 31, 1994 AS OF JANUARY 31, 1994
NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- -------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Gary L. Larkins......... -0- -0- 230,666/30,334 $75,000/-0-
Barney Sofro............ -0- -0- 180,666/30,334 $62,500/-0-
Peter J. Lynch.......... -0- -0- -0- -0-/-0-
Donald R. Ardemagni..... -0- -0- 64,666/8,166 $16,665/-0-
Marvin S. Maltzman...... -0- -0- 73,334/6,166 $52,500/-0-
</TABLE>
6
<PAGE>
CORPORATE LOAN PROGRAM
The Board of Directors adopted the 1990 Corporate Loan Program, which is
designed to permit officers of the Company to borrow funds in order to assist
them in the purchase of Company stock through the exercise of their stock
options, and to permit emergency loans for employees of the Company. The
program is administered by a committee composed of the Chairman of the Board,
President, General Counsel and James J. McMorrow, a non-employee Director. No
loans may be approved unless the committee is assured that there is adequate
security to guarantee repayment of the loan in the form of either the stock
purchased by the employee, a pledge of the employee's salary, bonus or any
vested profit sharing interest. Interest to be charged on such loans is at the
average applicable Federal interest rate published by the Internal Revenue
Service (the "Federal Rate"), which interest, at the option of the borrower,
may be paid quarterly or allowed to accrue into the principal amount of the
loan. The average Federal Rate used during the past fiscal year was 3.85%.
There is currently outstanding one loan totalling $494,634 to Barney Sofro.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee ("Committee") is appointed by the Board of
Directors and currently consists of the Company's outside directors, Daniel
Greenberg, Chair, James J. McMorrow and Phillip G. Samovar. One member of the
Committee, Phillip G. Samovar, was formerly a Director, Vice President,
Secretary and Corporate Counsel of the Company. He resigned from that position
in 1979, and is currently an attorney engaged in private practice.
The Committee annually reviews the compensation of all corporate officers,
including the Chief Executive Officer and makes recommendations to the Board of
Directors based upon the criteria which follows.
The Company's overall compensation philosophy has the objectives of (1)
competitiveness, (2) reasonableness, (3) performance, and (4) consistency and
equity. The Committee also believes that the Company's bonus program should
incorporate a philosophy that a substantial portion of the total annual
compensation be "at risk" through short term incentives relating to measured
financial performance and individual incentive during the fiscal year.
The Committee also believes that compensation programs should reflect the
principles of long term value for shareholders, achievement of significant
short term and long term strategic goals for the Company, and significant
individual achievement.
At House of Fabrics, for many years officers' compensation has been directly
linked to performance through a base salary and a bonus percentage based upon
the financial performance of the Company. The bonus portion of officers'
compensation, when the Company has achieved increased operating results, can
constitute a significant percentage of each officer's total compensation, and
conversely, when operating results decline, so do officers' bonuses.
For the last three years, because of competitive conditions and the declining
performance of the Company, base salaries have remained relatively unchanged
and bonus awards have dropped substantially from year to year.
The long term component of officers' compensation is the award of stock
options, which are designed to establish an effective link between the
Company's long term performance and the officer's long term compensation. The
award of stock options is also designed to link the economic interests of
officers and
7
<PAGE>
shareholders by providing officers with an opportunity for the options to gain
in value as the shareholders' values increase. During the last year stock
options were granted to all officers as part of a plan to improve operating
efficiency and achieve specific Company goals. In granting the options during
the last fiscal year, the Committee did not consider the number of options
previously granted to each officer, or the number of shares owned by each
officer.
In 1993 Congress adopted legislation that prohibits publicly held companies
from deducting certain compensation that exceeds $1,000,000 in any tax year.
The Company has not modified its incentive plans to comply with this
legislation. Should circumstances change, the Committee will consider a
modification of Company plans to comply with the legislation where practical.
During the fiscal year ended January 31, 1994, the five named executive
officers in the Summary Compensation Table did not receive any increase in
annual base salary. Four of the five officers received no bonus compensation.
Two officers received increases in their base compensation as a result of
increased responsibilities. During the last fiscal year three officers were
paid a guaranteed bonus based upon a commitment made at the time they were
hired or promoted. Four officers' bonus award percentages were increased.
Daniel Greenberg, Chairman
James J. McMorrow
Phillip G. Samovar
8
<PAGE>
PERFORMANCE GRAPH
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG HOUSE OF FABRICS, INC.,
NYSE MARKET INDEX AND PEER GROUP INDEX*
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
FISCAL YEAR ENDING
-----------------------------------------------
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
HOUSE OF FABRICS, INC. 100 87.64 166.91 229.51 142.14 75.63
PEER GROUP 100 132.51 200.13 238.20 149.34 110.61
BROAD MARKET 100 112.89 119.90 146.83 156.50 183.80
</TABLE>
The total return assumes $100 invested on February 1, 1989, and all dividends
are reinvested. The fiscal year ended January 31, 1994.
- - --------
* The Peer Group Index is a self-constructed group consisting of House of
Fabrics, Inc., Fabri-Centers of America, Inc. and Hancock Fabrics, Inc.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Upon recommendation of the Audit Committee, the Board of Directors has
appointed Deloitte & Touche to serve as the Company's independent auditors for
the fiscal year ending January 31, 1995, subject to ratification by the holders
of a majority of the shares represented either in person or by proxy at the
Annual Meeting of Stockholders. If the appointment is not ratified, the Board
of Directors will appoint another firm as the Company's independent auditors
for the fiscal year ending January 31, 1995. Deloitte & Touche was first
appointed independent auditors for the Company in 1962 and has conducted the
examination of the Company's financial statements for the past 32 years.
9
<PAGE>
Services rendered by Deloitte & Touche during the last fiscal year consisted
of the examination of the financial statements for the year ended January 31,
1994, review of the Company's annual report, registration statements on Form
S-8, proxy soliciting materials and periodic filings with the Securities and
Exchange Commission, audit of the Company's Profit Sharing Plans and
consultations with senior management and the Audit Committee regarding various
accounting and financial matters.
Representatives of Deloitte & Touche are expected to attend the Annual
Meeting of Stockholders and will have the opportunity to make a statement, if
they so desire, and to be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF DELOITTE & TOUCHE AS INDEPENDENT AUDITORS OF THE COMPANY FOR
THE FISCAL YEAR ENDING JANUARY 31, 1995.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires that the
Company's executive officers and directors and persons who own more than ten
percent of the Company's common stock file initial reports of ownership of
common stock and reports of changes of ownership with the Securities and
Exchange Commission and the New York Stock Exchange.
Executive officers, directors, and stockholders are required to furnish the
Company with copies of all Section 16(a) forms they file. Based on a review of
such copies and other records available to the Company, the Company believes
that all of its officers, directors and persons who own more than ten percent
of the Company's common stock have complied with all filing requirements
except for Ms. Kimberly Sue Mitchell, Vice President--Merchandising, who
failed to file her initial Form 3 in a timely manner. When the oversight was
brought to her attention a Form 3 was immediately filed.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 1995 Annual Meeting of
Stockholders must be received at the Company's executive offices at 13400
Riverside Drive, Sherman Oaks, California 91423-2598 no later than January 17,
1995.
OTHER MATTERS
The management does not know of any other matters to be acted upon at the
meeting. If any other matters should properly come before the meeting or any
adjournment thereof, the proxies solicited hereby will be voted by the holders
thereof in accordance with their discretion.
By Order of the Board of Directors
MARVIN S. MALTZMAN
Secretary
Sherman Oaks, California
May 16, 1994
10
<PAGE>
HOUSE OF FABRICS, INC.
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Marvin S. Maltzman and Barney
Sofro or any one of them, (with full power to act alone), with full power of
substitution, to vote all of the common stock of House of Fabrics, Inc. which
the undersigned has the full power to vote at the Annual Meeting of Stockholders
of House of Fabrics, Inc. to be held at Sportmen's Lodge, Starlight Room, 12833
Ventura Blvd., Studio City, California on June 22, 1994 at 10:30 a.m., local
time and at any adjournments.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES.
SEE REVERSE SIDE. YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR
SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
THE PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ELECTION OF DIRECTORS, AND
FOR THE APPROVAL OF THE APPOINTMENT OF INDEPENDENT AUDITORS.
HOUSE OF FABRICS, INC. (TO BE SIGNED ON REVERSE SIDE)
<PAGE>
(X) PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
1. ELECTION OF DIRECTORS:
FOR WITHHELD NOMINEES: Daniel Greenberg
(__) (__) James J. McMorrow
FOR, EXCEPT VOTE WITHHELD FROM THE FOLLOWING NOMINEES.
----------------------------------------------------------------------------
2. Appointment of Deloitte & Touche as the Company's Independent Auditors.
FOR AGAINST ABSTAIN
(__) (__) (__)
3. The transaction of such other business as may properly come before the
Meeting or any adjournments thereof.
SIGNATURE(S)________________________________ DATE__________________________
NOTE: Please sign exactly as name appears hereon. Joint owners should
each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
I hereby revoke all proxies previously given by me to vote at said
meeting or any adjournments thereof.
