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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 2, 1998
HOUSE OF FABRICS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-7927 95-3426136
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
13400 Riverside Drive, Sherman Oaks, California 91423
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (818) 995-7000
(Former name or former address, if changed since last report.)
Not applicable.
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Item 1. A press release was issued February 2, 1998 announcing that Fabri-
Centers of America, Inc. entered into an agreement to acquire House of Fabrics,
Inc. See attached press release (Exhibit 99.1).
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Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1 Press Release dated February 2, 1998
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Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HOUSE OF FABRICS, INC.
By: /s/ MARVIN S. MALTZMAN
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Marvin S. Maltzman
Senior Vice President and
Secretary
DATED: February 17, 1998
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EXHIBIT 99.1
FABRI-CENTERS TO ACQUIRE HOUSE OF FABRICS
HUDSON, OH, February 2, 1998 -- Fabri-Centers of America, Inc. (NYSE: FCA_A and
FCA_B) and House of Fabrics, Inc. (NASDAQ: HFAB) today jointly announced an
agreement for Fabri-Centers to acquire House of Fabrics. The two companies have
signed a definitive merger agreement under which FCA Acquisition Corporation, a
Fabri-Centers subsidiary, will commence a cash tender offer to acquire all of
the outstanding shares of House of Fabrics for $4.25 per share. House of
Fabrics' Board of Directors has unanimously approved the tender offer and the
merger and recommends that House of Fabrics shareholders tender their shares.
Following the completion of the tender offer, Fabri-Centers intends to
consummate a second step merger in which all remaining House of Fabrics
shareholders will also receive the same cash price paid in the tender offer.
Excluding one-time costs of integrating the operations of the two companies,
Fabri-Centers expects the transaction to have a slightly accretive impact to
earnings in the current fiscal year and to be accretive to earnings in
subsequent years.
Alan Rosskamm, Chairman of the Board and Chief Executive Officer of
Fabri-Centers, commented, "We are very excited about the combination of
Fabri-Centers and House of Fabrics. This merger represents a win-win opportunity
for both companies' shareholders, employees and customers. With Fabri-Centers'
financial resources, technological expertise and marketing capability, we can
together grow the combined company's customer base and increase our sales
potential. House of Fabrics is already a leader in many of its markets. Its real
estate base is in very good condition and complements Fabri-Centers' store base
well, particularly in West Coast
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markets where House of Fabrics' stores are concentrated. We will be able to
build on that strength as we introduce our broader product line. Among other
efficiencies, this combination will allow the combined company to spread costs
over a larger base of stores. This will assist us in maintaining competitive
prices for our customers."
Donald L. Richey, President and Chief Executive Officer of House of Fabrics,
added, "Our Board of Directors unanimously concluded that this transaction with
Fabri-Centers is in the best interests of House of Fabrics' shareholders and
employees. At $4.25 per share in cash, this offering price represents a
substantial premium over House of Fabrics' stock price for the recent period
before Fabri-Centers commenced its tender offer and provides immediate liquidity
to House of Fabrics' shareholders. We look forward to a rapid completion of the
transaction and to working with Fabri-Centers to ensure the smoothest transition
possible for our customers and employees."
House of Fabrics has approximately 6 million shares and eligible options to
acquire shares outstanding on a fully diluted basis. The total value of the
transaction, including the amount of outstanding secured bank and long-term debt
of House of Fabrics, is approximately $100 million. The offer price of $4.25 per
share represents a premium of approximately 110% over the last 60 days' average
trading price and provides immediate liquidity to House of Fabrics shareholders.
Fabri-Centers intends to finance the tender offer through a combination of cash
on hand and available bank borrowings. The tender offer is conditioned upon the
acquisition of a majority of House of Fabrics' shares on a fully diluted basis
and the expiration or termination of any applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvement Acts of 1976. The complete terms and
conditions of the tender offer will be set forth in the offering documents to be
filed with the Securities and Exchange Commission later this week. The tender
offer is scheduled to expire at midnight (EDT) on March 6, 1998.
Fabri-Center has annual revenues of approximately $970 million and operates 907
fabric and craft stores in 48 states, primarily under the names of Jo-Ann
Fabrics and Crafts, Cloth World, New York Fabrics and Jo-Ann etc. House of
Fabrics has annual revenues of approximately $240 million and operates 262
fabric and craft stores in 27 states under the names of House of Fabrics, SoFro
Fabrics, Fabricland and Fabric King.
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