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EXHIBIT 99.A
[HANOVER DIRECT LOGO]
FOR IMMEDIATE RELEASE
CONTACT: Hanover Direct, Inc The MWW Group
Brian C. Harriss Jamie Schwartz
S.V.P & Chief Financial Officer Rich Tauberman
Tel: (201) 272-3224 Tel: (201) 507-9500
HANOVER DIRECT ANNOUNCES STRATEGIC REALIGNMENT AND ESTIMATES STRONG 4TH
QUARTER HANOVER BRANDS SALES
WEEHAWKEN, NJ, January 5, 2001 - Hanover Direct, Inc. (AMEX: HNV) today
announced a strategic realignment and estimated strong sales results in Hanover
Brands for the 4th Quarter of 2000.
"The actions announced today," stated Tom Shull, President and Chief Executive
Officer, "direct the Company's resources primarily towards continued profitable
growth in Hanover Brands, such as The Company Store, Domestications,
Improvements and Silhouettes brands, while reducing costs in all areas of the
business and eliminating investment activities that have not yet generated
sufficient revenue to produce profitable returns. We will continue to
investigate both internal and external opportunities to further reduce costs,
improve cashflow and maximize shareholder value."
Key elements of the strategic business realignment program include:
- Concentrate on core brands including The Company Store,
Domestications, Improvements and Silhouettes
- Reduce 285 full time equivalent positions across all business units
- Close the Always In Style business
- Eliminate underperforming catalogues: Turiya, Kitchen & Home, Kitchen
& Garden
- Terminate the Compagnie de la Chine marketing agreement
- Close Maumelle and consolidate Keystone fulfillment operations in
Hanover, PA
- Cease Desius business operations
HANOVER DIRECT ELIMINATES 285 POSITIONS TO DELIVER $26.0 MILLION IN ESTIMATED
ANNUALIZED PAYROLL AND RELATED NON-PAYROLL COST REDUCTIONS AND ANTICIPATES $8.6
MILLION FISCAL 2000 YEAR END CHARGE
The Company today announced the elimination of approximately 285 FTE positions
across all its business units; it will include an estimated $8.6 million
provision in the financial statements for the year ending December 30, 2000 and
intends to make prospective payments to separated employees either weekly or
bi-weekly based upon each person's applicable severance period. The Company
estimates that the annualized payroll and related non-payroll savings associated
with these position reductions is approximately $26.0 million.
HANOVER DIRECT TO CLOSE THE BUSINESS OF ALWAYS IN STYLE
The Company, effective immediately, will close the Always In Style business and
will provide an asset write-down of approximately $0.5 million within the
financial statements for the year ending December 30, 2000.
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HANOVER BRANDS TO DISCONTINUE THE TURIYA, KITCHEN & HOME, KITCHEN & GARDEN
CATALOGS, TERMINATE MARKETING AGREEMENT WITH COMPAGNIE DE LA CHINE, AND CLOSE
CERTAIN RETAIL OUTLETS
Hanover Brands, Inc. will discontinue the Turiya, Kitchen & Home, and Kitchen &
Garden catalogs but will incorporate some of the product offerings within
continuing catalogs. Additionally, Hanover Brands has terminated its marketing
agreement with Compagnie de la Chine and will close certain retail outlets. An
estimated non-personnel discontinuation provision associated with these actions
of approximately $3.9 million will be included within the financial statements
for the year ending December 30, 2000.
ERIZON TO CLOSE MAUMELLE, ARKANSAS FACILITY, CONSOLIDATE KEYSTONE FULFILLMENT IN
HANOVER, PENNSYLVANIA AND CEASE DESIUS BUSINESS OPERATIONS
erizon, Inc. expects to close its leased fulfillment and telemarketing facility
in Maumelle, Arkansas by the end of March 2001 and will provide a non-cash
charge of approximately $5.4 million within the financial statements for the
year ending December 30, 2000, to reflect assets writedowns to their net
realizable value. Additionally, the Company is providing approximately $1.6
million for lease exit expenses. erizon will consolidate the Maumelle operations
within its remaining facilities and intends to provide the bulk of its
fulfillment services for third party clients of its Keystone Internet Services,
Inc. subsidiary within its existing operation in Hanover, Pennsylvania.
"The consolidation of Keystone activities in Hanover, Pennsylvania" stated Mike
Contino, Senior Vice President and Chief Information Officer, who assumed
responsibility for Keystone in December, "will provide a better opportunity to
focus resources, particularly customer service support, on clients to service
their needs."
erizon will immediately cease operations associated with the Desius business.
HANOVER BRANDS ESTIMATES 4TH QUARTER 2000 SALES OF $179.2 MILLION, 13.5% GROWTH
VERSUS 1999 4TH QUARTER
Hanover Brands estimates 4th Quarter sales of approximately $179.2 million, an
increase of 13.5% over 4th Quarter 1999 sales. The 4th Quarter of 2000 included
one more week than the comparable period in 1999.
HANOVER DIRECT ESTIMATES YEAR-END 2000 CASH AND AVAILABILITY UNDER CREDIT
AGREEMENT WITH CONGRESS FINANCIAL OF APPROXIMATELY $31.0 MILLION
Hanover Direct, Inc. estimates that at fiscal year-end on December 30, 2000, it
had utilized approximately $43.2 million of its credit facility with Congress
Financial and had cash and availability of approximately $31.0 million compared
to amounts as of September, 23, 2000, the end of the 3rd Quarter, of $43.2
million and $ 31.7 million, respectively.
"The cost reductions announced today," noted Brian Harriss, Senior Vice
President and Chief Financial Officer, "provide a very rapid payback and will
reduce cash requirements over the balance of 2001."
ABOUT HANOVER DIRECT, INC.
Hanover Direct, Inc. (AMEX: HNV) 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
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and e-commerce web site portfolio of home fashions, apparel and gift brands,
including Domestications, The Company Store, Company Kids, Encore, Improvements,
Silhouettes, International Male, Undergear, Scandia Down, and Gump's By Mail.
The Company owns Gump's, a retail store based in San Francisco. 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 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.
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FORWARD LOOKING STATEMENTS
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, an economic slowdown which could limit the
Company's continued growth and profitability, inaccurate estimates of cost
savings and financial statement provisions, inaccurate estimates of the period
required to achieve cost savings, requirements of third parties to agreements
which are being terminated, increases in prices for goods and services required
by the Company, the inability of the Company to reduce expenses generally and to
achieve cost savings, the inability of the Company to achieve self-funding
status in a timely fashion, the inability of the Company to identify or take
advantage of opportunities to further reduce costs, improve cash flow and
maximize shareholder value, the ability of the Company to compete and other
matters discussed in the Company's most recent quarterly report on Form 10-Q and
other filings with the Securities and Exchange Commission under the caption
"Forward Looking Statements."
We undertake no obligation to publicly update any forward looking statement
whether as a result of new information, future events or otherwise. You are
advised, however, to consult any further disclosures we make on related subjects
in our Forms 10-Q, 8-K, 10-K or any other reports filed with the Securities and
Exchange Commission.
