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EXHIBIT 20.1
Press Release
Hanover Direct, Inc. Completes
$70,000,000 Preferred Stock Financing with
Richemont Finance S.A.
WEEHAWKEN, N.J.--(BUSINESS WIRE)--Aug. 25, 2000--Hanover Direct, Inc. (AMEX:
HNV - news) today announced that it has completed the sale of a new series of
the Company's preferred stock to Richemont Finance S.A. for a purchase price of
$70,000,000 effective August 24, 2000.
The proceeds will be used to repay and retire the unsecured line of credit
facilities provided from Richemont to Hanover earlier in the year as well as
for the development of warehouse facilities and general corporate purposes. The
preferred stock bears a dividend at the annual rate of 15% payable quarterly in
cash or in kind and is redeemable on the 5th anniversary of the date of
issuance or earlier under certain circumstances. The issuance was approved
earlier this month by the Company's Transactions Committee and its Independent
Directors.
"The $70.0 million Preferred Stock financing gives Hanover a strong balance
sheet," stated Rakesh K. Kaul, President and Chief Executive Officer of Hanover
Direct, Inc. "With its increased focus on profitability improvement and seeking
consolidation opportunities which add scale and critical mass to the third
party service business," continued Kaul, "Hanover Direct is positioning itself
to deliver the self-funding business model required by today's capital
markets."
"This financing, at a time when the capital markets are less responsive to the
financial requirements of e-commerce initiatives, retires approximately $31
million of debt, is nondilutive and delivers incremental liquidity that
strengthens the Company's competitive position," stated Brian C. Harriss,
Senior Vice President and Chief Financial Officer.
About Hanover Direct, Inc.
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Hanover Direct, Inc. (AMEX: HNV - news) and its business units provide quality,
branded merchandise through a portfolio of catalogs and e-commerce platforms to
consumers, as well as a comprehensive range of Internet, e-commerce, and
fulfillment services to businesses. Hanover Brands, Inc. is comprised of the
Company's catalog and e-commerce web site portfolio of home fashions, apparel
and gift brands, including Domestications, The Company Store, Company Kids,
Turiya, Domestications Kitchen & Garden, Kitchen & Home, Encore, Improvements,
The Safety Zone, Silhouettes, International Male, Undergear, Scandia Down, and
Gump's By Mail. Hanover Direct is the exclusive distributor of the Compagnie de
la Chine brand in North America; the Company owns Gump's, a retail store based
in San Francisco; and the Company has a majority equity stake in Always In
Style, LLC. Each brand can be accessed on the Internet individually by name.
erizon, Inc. is comprised of Keystone Internet Services, Inc.
(www.keystoneinternet.com), the Company's third party, end-to-end, fulfillment,
logistics and e-care provider, and Desius, LLC, the Company's joint venture
with RS Software (India), Ltd., offering 24/7-web shop services and e-commerce
systems development. The subsidiary also services the logistical, IT and
fulfillment needs of the Hanover Brands, Inc. Information on Hanover Direct,
including each of its subsidiaries, can be accessed on the Internet at
www.hanoverdirect.com.
The matters discussed in this news release may include forward looking
statements (within the meaning of the Private Securities Litigation Reform Act
of 1995) by officers of the Company. Important factors that could cause actual
results to differ materially from those in such forward looking statements
include, without limitation, increases in prices for goods and services
required by the Company, the inability of the Company to reduces expenses
generally as required, the inability of the Company to locate and/or consummate
consolidation opportunities, the inability of the Company to achieve
self-funding status in a timely fashion, the ability of the Company to compete
and other matters discussed in the Company's most recent quarterly report
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on Form 10-Q and other filings with the Securities and Exchange Commission
under the caption "Forward Looking Statements."
Contact:
Hanover Direct, Inc.
Brian C. Harriss, Sr. VP - Chief Financial Officer
Tel: (201) 272-3224
or
AGG International, Public Relations
Paula Zwerdling
[email protected]
Tel: (212) 869-8230
