SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 26, 1997
EDISON BROTHERS STORES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-1394 43-0254900
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(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
501 N. Broadway, St. Louis, Missouri 63102
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(Address of principal executive offices) (Zip Code)
(314) 331-6000
(Registrant's telephone number, including area code)
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INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 5. OTHER EVENTS.
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On September 26, 1997, Edison Brothers Stores, Inc., a Delaware
corporation (the "Company"), announced that the Company emerged on such date
from reorganization under Chapter 11 of the United States Bankruptcy Code. The
Company also announced on such date certain additional information regarding
such emergence. A copy of the press release issued by the Company describing
such matters is attached hereto as Exhibit 99.1 and is incorporated herein by
reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
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(c) Exhibits.
Exhibit No. Exhibit Page No.
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99.1 Press Release dated September 26, 1997. 5
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
EDISON BROTHERS STORES, INC.
By: /s/ Alan A. Sachs
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Name: Alan A. Sachs
Title: Executive Vice President,
General Counsel and Secretary
Date: October 3, 1997
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EXHIBIT INDEX
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Exhibit No. Exhibit Page No.
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99.1 Press Release dated September 26, 1997. 5
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EXHIBIT 99.1
EDISON BROTHERS STORES INC.
501 North Broadway Post Office Box 14020 St. Louis, Missouri 63178-4020 U.S.A.
Phone (314) 331-6000 Fax (314) 331-7200
FOR IMMEDIATE RELEASE For further information, contact:
David B. Cooper, Jr., CFO
314/331-6531
Amy Calvin, Communications Director
314/331-6588
EDISON BROTHERS EMERGES FROM CHAPTER 11
RESTRUCTURING, MORE FOCUSED STRATEGY POSITION RETAILER FOR THE FUTURE
ST. LOUIS, September 26, 1997 - Edison Brothers Stores Inc., one of the largest
specialty apparel and footwear retailers in North America, emerged today from
Chapter 11. The emergence comes just 17 days after the U.S. Bankruptcy Court
confirmed the company's plan of reorganization, which had been endorsed by the
official committees representing its creditors and shareholders.
"In less than two years, we have stabilized and strengthened our
business and given Edison a much sharper focus as a specialty apparel, footwear
and accessories retailer serving the youth and special size markets," said Alan
Miller, the company's chairman and chief executive officer. "As a result, we
believe the new Edison is positioned to meet its mission of
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being a great place to invest time and money for all its key stakeholders -
customers, employees, vendors and investors."
APPROVED PLAN OF REORGANIZATION AND EXIT FINANCING
Under the terms of the company's plan of reorganization, creditors will
receive a combination of new corporate equity, cash, new corporate debt and
other assets in settlement for their approximately $450 million of allowed
claims. This represents an estimated recovery of approximately 91 cents on the
dollar. All of the existing common stock will be canceled and current
shareholders will receive eight-year warrants entitling them to purchase up to 9
percent of the new common stock on a fully diluted basis at a preset price of
$16.40 per share. Current shareholders also will receive rights to purchase
shares of new Edison common stock.
The initial distributions pursuant to the plan, including the issuance
of most of Edison's new common stock, will occur in late November. At that time,
the company expects that the stock will begin trading on the NASDAQ National
Market System or over-the-counter.
In addition, Edison has completed arrangements for a five-year $200
million secured credit facility provided by Congress Financial and CIT.
RESTRUCTURING INITIATIVES
After filing for Chapter 11 on Nov. 3, 1995, Edison began a
comprehensive restructuring process with the immediate goal of improving the
short-term health of the company. Efforts included consolidating the store base
and selling the entertainment division to generate needed cash. Edison then
implemented an aggressive turnaround strategy,
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including corporate and store-level initiatives designed to help the company
reenergize its business by establishing a stronger brand equity for each of its
nine chains.
Key elements of Edison's restructuring initiatives at the store level
have included streamlining operations, upgrading physical appearances, and
improving merchandise quality and assortments to better reflect customer
preferences. Behind the scenes, the company has improved merchandise planning
and allocation, and standardized operational policies. Edison also has developed
stronger relationships with vendors to improve merchandise quality and further
streamline allocation and distribution processes.
To support these initiatives and help Edison grow into the 21st
century, the company initiated a complete overhaul of its computer systems and
will spend $20 million to install a state-of-the-art, enterprise-wide computer
system for all core functions.
BUSINESS STRATEGY AND OUTLOOK
While Edison plans to continue to pursue corporate-level initiatives,
much of its focus going forward will be on efforts to build strong identities
and sales momentum for its individual chains.
"The company has emerged from Chapter 11 with a new business strategy
focused on the youth and special size markets, which show favorable demographic
and economic trends, fit well with Edison's store concepts and offer the best
potential for operational synergy," Miller said.
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Several of Edison's chains directly serve the expanding youth market --
customers in the 12-to-24 age range -- including 5-7-9 Shops, Shifty's, JW/Jeans
West and Wild Pair. Others, such as J. Riggings and Bakers/Leeds, overlap the
top end of the age range. In addition, Edison, has had excellent success in the
men's big & tall segment with its REPP Ltd.
stores and REPP By Mail catalog operations.
NOTE ON FORWARD-LOOKING STATEMENTS
Forward-looking statements in the "Business Strategy and Outlook"
section of this release and all other statements that are not historical fact
are subject to risks and uncertainties, which may cause the company's
performance to vary. Specific risks include, but are not limited to, industry
competition factors, unavailability of suitable retail space for expansion,
difficulty in predicting or responding to fashion trend shifts, adverse or
unseasonable weather that affects consumer shopping, and other risks identified
in the company's filings with the Securities and Exchange Commission.
Edison Brothers Stores Inc. operates JW/Jeans West, Coda, Oaktree, J.
Riggings and REPP Ltd. Big & Tall menswear stores; REPP Ltd. and Phoenix Big &
Tall men's catalogs; 5-7-9 Shops junior apparel stores; Bakers/Leeds, Precis and
Wild Pair footwear stores; and Shifty's alternative apparel, footwear and
accessories for teen boys and girls. With more than 1,600 stores in the United
States, Canada, Puerto Rico and the Virgin Islands, Edison is one of the largest
specialty retailers of apparel, footwear and accessories in North America.
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