SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K 405
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 -- Fee Required
For the fiscal year ended September 2, 1995 or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
AND EXCHANGE ACT OF 1934 -- No Fee Required
For the transition period from _______ to _______
Commission File No. 1-8252
FREDERICK'S OF HOLLYWOOD, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-2666265
(State of Incorporation) (IRS Employer Identification Number)
6608 Hollywood Boulevard, Los Angeles, California 90028
(Address of principal executive offices, including Zip Code)
Registrant's telephone number, including area code: (213) 466-5151
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of each exchange
Title of each class on which registered
Class A Capital Stock $1 Par Value New York Stock Exchange
Class B Capital Stock $1 Par Value
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 of 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No _______
Indicate by checkmark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. X
The aggregate market value of capital stock held by nonaffiliates of the
registrant as of October 18, 1995 was approximately $7,193,000 for Class A
Capital Stock and $11,594,000 for Class B Capital Stock.
Number of shares of capital stock outstanding on October 18, 1995 was
2,955,309 - Class A capital Stock and 5,903,118 - Class B Capital Stock.
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of Registrant proxy statement and notice of annual meeting for the
meeting of February 1, 1996 is incorporated by reference in Part III.
TABLE OF CONTENTS
Page
PART I
Item 1. Business.....................................
Item 2. Properties...................................
Item 3. Legal Proceedings............................
Item 4. Submission of Matters to a Vote of Security
Holders...................................
Executive Officers of the Registrant...
PART II
Item 5. Market for the Registrant's Common Equity and
Related Stockholder Matters...............
Item 6. Selected Financial Data......................
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Item 8. Financial Statements and Supplementary Data..
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosures......
PART III
Item 10. Directors and Executive Officers of the
Registrant................................
Item 11. Executive Compensation.......................
Item 12. Security Ownership of Certain Beneficial
Owners and Management.....................
Item 13. Certain Relationships and Related Transactions
PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K.......................
PART I
Item 1. BUSINESS
(a) General Development of Business
Frederick's of Hollywood, Inc., incorporated in 1962, as a successor to a
business established in 1946, is a retailer of women's apparel merchandise
through mail order catalogs and boutique specialty stores. Frederick's of
Hollywood, Inc., is a Delaware corporation with executive offices at 6608
Hollywood Boulevard, Los Angeles, California 90028, and its telephone
number is (213) 466-5151. Frederick's of Hollywood, Inc. and its
consolidated subsidiaries are hereby called "Registrant" or "Company".
(b) Financial Information about Industry Segments
Information about industry segments is set forth on page 22 and under the
captions "Results of Operations" and "Financial Condition" starting on page
6.
(c) Narrative Description of Business
The information set forth under the captions "Results of Operations" and
"Financial Condition" starting on page 6 provides additional information on
the Company.
It is Registrant's policy to make frequent review of its selling price
structure in order to determine the advisability or necessity of marking
down the selling price of its merchandise.
Registrant purchases its merchandise from a variety of manufacturers. It
is not dependent on any one manufacturer. Registrant retains the services
of buying representatives in New York City to assist in fashion market
coverage.
Buying and distributing personnel are jointly responsible for inventory
replenishment in the stores, principally by causing inventory to be shipped
from Registrant's distribution center or by ordering drop-shipments of
certain items direct to stores by manufacturers.
Employees
Registrant employs regularly on a full or part-time basis approximately
1,500 people. Due to the seasonal nature of the retail business, the
number of employees increases during the Christmas season to approximately
1,900. Registrant does not have any collective bargaining agreements and
Registrant considers its relations with its employees to be good.
Capital Expenditures
During Fiscal 1995, Registrant opened seven new stores, remodeled three,
and closed eleven, resulting in a net decrease of 6,000 square feet of
floor space. During the year, more than $3,829,000 was invested in new
stores, remodels, fixtures and equipment.
The capital budget will be approximately $5,700,000 for fiscal 1996. The
Company anticipates it will have sufficient funds generated internally from
operations to support its operating and capital requirements. If
internally generated funds are not sufficient, capital expenditures will be
limited to the extent that funds are internally available.
Mail Order Catalog Operations
Registrant's mail order subsidiary engages in extensive operations in all
50 states. Sales are generated through catalogs published eleven times a
year. Four of these issues are reprinted in a revised form for which a
second mailing is made. The catalogs are distributed primarily to
customers on a mailing list which has been developed over a number of
years. The list has been developed through extensive list rental,
advertising in magazines and newspapers and undergoes continuous review and
updating. Approximately 50,000,000 catalogs are distributed annually.
Advertising, catalog costs and mailing expenses, approximated $17,321,000
in Fiscal 1995.
The subsidiary's mailing list of approximately 1.5 million names is one of
its more valued possessions. The company rents its list to other direct
marketing firms in order to maximize mail order sales and list rental
revenue.
The subsidiary offers a money-back guarantee on all customer purchases.
Slow-moving and obsolete merchandise is offered at reduced prices through
the media of sale catalogs and package inserts.
Retail Store Operations
The Registrant operated 204 women's apparel stores in 39 states during
Fiscal 1995 as compared with 208 stores in the prior fiscal year.
Substantially all stores are located in shopping malls with store size
ranging from 900 to 5,400 square feet and totaling 266,000 square feet.
During the past five years, 63 new stores have been opened and 36 stores
have been closed.
Each of Registrant's retail stores employs a manager responsible for sales,
displaying merchandise, selecting and supervising personnel. Each manager
reports to a regional area supervisor. Inventory markup, pricing and
distribution is determined by the respective merchandising staffs of
Registrant.
The retail stores offer a guarantee of customer satisfaction. Policy
regarding price adjustments to slow-selling and damaged or shopworn
inventory is to reduce the selling price to whatever level necessary to
effect a sale of this merchandise.
Trademarks
Registrant has registered its name as a trademark and markets its products
under such name. The trademarks are renewed every 20 years.
Competition
Registrant is in active competition with department stores and specialty
stores selling similar products. The department stores are generally
larger, well-established companies with greater financial resources. It is
not practical to estimate the number of all competitors because of the
markets served. Registrant competes on the basis of price, quality, and
customer service.
Item 2. PROPERTIES
Registrant owns its principal office and retail store distribution center
located at 6608 Hollywood Boulevard, Los Angeles, California 90028. The
63,500 square-foot building includes 5,400 square feet used as a retail
store.
With the exception of the retail store located at its principle place of
business, Registrant conducts all its retail operations in rented or leased
facilities. The majority of the leases are for terms of ten years.
Substantially all of the leases provided for fixed minimum annual rentals
and a percentage rental based on sales. In addition, Registrant, in most
cases, must pay any increase in real estate taxes over the base year of the
lease as additional rental.
In addition to the retail stores mentioned above, Registrant leases two
other facilities:
1. A 72,000 square foot concrete tilt-up building that is used as a mail
order warehouse, operations, order processing and fulfillment center.
2. A 14,200 square foot office space that is used for accounting, data
processing and administrative functions.
Item 3. LEGAL PROCEEDINGS
There are no pending legal proceedings to which Registrant is a party or of
which any of its property is subject, other than ordinary routine
litigation incidental to its business which are not deemed material.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to security holders during the fourth quarter
ended September 2, 1995.
EXECUTIVE OFFICERS OF REGISTRANT
Executive officers of the Company are elected annually by the Board of
Directors and serve at the pleasure of the Board. Certain information
concerning such executive officers is set forth below:
George W. Townson 54 Chairman, President, and
Chief ExecutiveOfficer since 1985.
John B. Hatfield 52 Executive Vice President,
Chief Financial and
Administrative Officer, Secretary
and Treasurer since 1990.
Nitin G. Parikh 46 Vice President, Control and
Planning since 1989.
Robert R. Genest 57 President - Retail Division since
1994; Executive Vice President,
General Manager - Retail Division
1990-1994.
Geric B. Johnson 44 Executive Vice President -
Mail Order Division since 1994;
Vice President - Mail Order
Operations 1989-1994.
All of the above officers have been actively engaged in Registrant's
business for the past five years.
PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
(a) MARKET PRICE RANGES
The capital stock of Frederick's of Hollywood, Inc. is traded on the New
York Stock Exchange. Ticker symbol: FOH.A and FOH.B. The following table
sets forth the closing high and low market prices per share of the
Company's capital stock:
Class A Class B
Capital Stock Capital Stock
High Low High Low
Fiscal 1995
First quarter $4 7/8 $3 3/4 $4 3/4 $3 1/4
Second quarter 6 1/8 3 5/8 5 5/8 3 1/2
Third quarter 5 1/2 4 3/8 5 1/2 3 7/8
Fourth quarter 6 1/4 5 1/8 6 1/2 4 1/2
Fiscal 1994
First quarter $8 1/2 $5 5/8 $8 1/2 $5 1/4
Second quarter 6 1/2 5 1/4 6 4 3/4
Third quarter 6 4 3/4 5 3/4 4 3/8
Fourth quarter 5 1/4 4 1/8 5 4
(b) As of October 24, 1995, Registrant had 609 Class A and 551 Class B
stockholders of record.
(c) The Company paid semi-annual cash dividends on both Class A and Class
B shares of 2.5 cents per share in Fiscal 1994 and Fiscal 1995. In
July 1995 the Board of Director's voted to change the cash dividend
payment policy from semi-annual to quarterly. The first quarterly
dividend on both Class A and Class B shares of 2.5 cents per share was
paid on September 29, 1995 to shareholders of record on September 15,
1995
Item 6. SELECTED FINANCIAL DATA
The following table summarizes data from the Company's annual financial
statement for the years 1991 through 1995 and the notes thereto. The
Company's fiscal year ends on the Saturday closest to August 31. Fiscal
year 1994 consisted of 53 weeks, all other years presented consist of 52
weeks. The Company's complete annual financial statement and notes thereto
for fiscal 1995 are on pages 12 through 23 of this Form 10-K 405.
<TABLE>
FIVE YEAR FINANCIAL SUMMARY
(In thousands except percentages
and per share data) 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Operating results:
Net sales $142,931 $132,153 $128,516 $117,030 $114,134
Gross profit 58,728 54,744 55,622 52,862 53,744
Earnings (loss) before income taxes 4,412 (1,705) 7,655 8,018 8,662
Net earnings (loss) 2,652 (903) 4,737 5,073 5,197
Primary earnings (loss) per share
Classes A & B .31 (.10) .53 .57 .58
Cash dividends per share -
Classes A & B .075 .05 .05 .05 .05
Primary weighted average shares
outstanding - Classes A & B 8,693 8,876 8,915 8,698 8,980
Financial position at year end:
Working capital 21,263 17,486 15,783 11,213 8,928
Total assets 55,952 55,417 50,838 45,790 39,935
Long-term debt 480 720 -- -- --
Capital lease obligations 884 701 1,207 1,663 2,077
Stockholders' equity 36,599 34,413 36,615 32,204 26,922
Equity per share - Classes A & B 4.21 3.88 4.11 3.67 3.10
Financial ratios:
Net earnings (loss) to sales 1.9% (0.7)% 3.7% 4.3% 4.6%
Net earnings (loss) to average
stockholders' equity 7.4% (2.5)% 13.8% 17.2% 21.3%
Current ratio 2.5 2.1 2.4 2.1 1.9
</TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Management's discussion and analysis should be read in conjunction with the
Company's financial statements and the notes related thereto.
Results of Operations
Sales - Consolidated sales increased in 1995 to $142,931,000 from
$132,153,000 in 1994 and $128,516,000 in 1993. The percentage of sales
increases were 8.2% and 2.8% in 1995 and 1994 respectively. The factors
contributing to the increase in each segment were as follows:
Retail Store sales volume increased $3,731,000 or 5.1% in 1995 when
compared to 1994 and decreased $816,000 or 1.1% in 1994 when compared
to 1993. The increase in retail store sales volume is due to the
positive response to our value pricing program which was implemented
late in 1994. To further improve sales and operating profits we are
currently in the process of refining our merchandise mix. The
decrease in sales volume of $816,000 for fiscal 1994 reflects more
intense competition and disappointing customer response to our
merchandising and marketing programs. Comparable store sales volume
for 1995 increased 6.5% and decreased 4.2% in 1994.
In Fiscal 1995, seven stores were opened and eleven were closed while,
in 1994, seven stores were opened and five were closed. At the end of
1995 the Company operated 204 stores in 39 states.
The Company conducts market tests and or market research on a
continuous basis in an effort to improve profitability. The effect on
net income associated with the tests and or research presently being
performed is not material. The effect of the successful execution of
current surveys' recommendations, test results or our current
implementation of new merchandise and marketing strategies on future
financial condition and results of operations is not presently
determinable.
Mail Order sales increased $7,047,000 or 11.8% in 1995 when compared
to 1994 and $4,453,000 or 8.1% in 1994 when compared to 1993. The
increase in sales volume for 1995 when compared to 1994 is
attributable to an increase in volume due to the number of catalogs
distributed as well as an increase in catalog productivity. The
increase in sales volume for 1994 when compared to 1993 is
attributable to an increase in the number of catalogs distributed.
Cost of goods sold (including buying and occupancy cost) - Cost of goods
sold increased $6,794,000 or 8.8% in 1995 compared to 1994 and $4,515,000
or 6.2% in 1994 compared to 1993. As a percentage of sales, cost of goods
sold were 58.9% in 1995, 58.6% in 1994, and 56.7% in 1993. The increase in
cost of goods sold in dollars as well as a percentage of sales is
attributable to reduced markup to accommodate our value pricing program and
increased markdowns in both retail and mail order. The increase in cost of
goods sold in 1994 was due primarily to increased markdowns to dispose of
certain unproductive merchandise classifications to accommodate our new
merchandising and marketing programs in retail stores and marking down
overstocked merchandise carried in the Spring and Summer catalogs which had
softer than anticipated sales. The increase in 1993 was primarily due to
higher occupancy costs for new and remodeled stores.
Selling, General and Administrative Expenses - Selling, general and
administrative expenses increased $2,427,000 from 1994 to 1995 and
increased $4,836,000 from 1993 to 1994. As a percentage of sales, these
expenses were 38.5% in 1995, 39.7% in 1994, and 37.1% in 1993. Expenses
for 1995 reflect slightly higher payroll dollars while the percentage to
sales decreased 0.8% and an increase in advertising dollars as well as
pecentage of 0.3%. Expenses for 1994 reflect higher payroll (0.5% of
sales), higher advertising costs (1.9% of sales) and higher postage costs
(0.4% of sales).
Provision for Store Closings - In the fourth quarter of fiscal 1994, the
Company recorded a provision for closing twelve stores and the write down
of certain display fixtures of $3,442,000.
In the fourth quarter of Fiscal 1995, the Company recorded a $790,000 pre-
tax credit to the provision for store closing due to favorable lease
settlements from landlords on some closed stores and the inability of the
Company to close two stores out of the original 12 stores identified for
closure because of changing business and economic conditions that made
closing these two stores unfeasible.
See Note 3 of Notes to Consolidated Financial Statements for additional
disclosure related to the provision for store closure.
The Company does not expect a material impact on liquidity or operating
results from its inability to close two of the stores as originally
planned.
Other Income (Expense) - Interest expense represents the payment of
interest on ESOP debt and capitalized leases. The decrease in
miscellaneous other expense of $296,000 for 1995 when compared to 1994
represents, primarily, an increase in interest income. The increase in
miscellaneous other expense of $206,000 for 1994 when compared to 1993
represents, primarily, the write off of discontinued fixtures.
Income Taxes - The effective tax rate for 1995 was 39.9% compared with
40.0% in the prior year.
Change in Accounting Principle - Effective August 29, 1993, the Company
changed its method of accounting for income taxes by adopting the
provisions of Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" ("Statement 109"). Statement 109 requires a
change from the deferred method of accounting for income taxes under APB
Opinion No. 11 to the asset and liability method of accounting for income
taxes. Under the asset and liability method, deferred tax assets and
liabilities are recognized for the expected future tax consequences
attributable to differences between the financial statement and tax basis
of assets and liabilities using enacted tax rates expected to apply in the
years in which the temporary differences are expected to reverse. As
permitted by Statement 109, the Company has elected not to restate the
financial statements of prior years.
The adoption of Statement 109 resulted in the recognition of $120,000 of
deferred federal tax benefits in fiscal 1993.
Segment Information - The increase in retail store operating profit of
$4,507,000 was due primarily to the customer response to our value pricing
program and strict expense controls. The decline in retail stores operating
profit of $6,252,000 in 1994 as compared to 1993 was caused primarily by
the provision for store closings, higher payroll, higher markdowns, and
higher rent.
The improvement in Mail Order operating profit of $1,282,000 from 1994 to
1995 was due to an increase in the number of catalogs mailed as well as an
increase in catalog productivity. While Mail Order sales volume increased
due to an increase in the number of catalogs distributed, as mentioned
above, operating profit declined $2,904,000 or 54.6% in 1994 when compared
to 1993. This decline was due primarily to higher advertising and postage
expenses.
Financial Condition
Liquidity and Capital Resources - Cash and cash equivalents were
$11,441,000, $10,556,000, and $7,136,000 for 1995, 1994, and 1993,
respectively. Total working capital increased to $21,263,000 in 1995 from
$17,486,000 in 1994 and $15,738,000 in 1993. The current ratio was 2.5,
2.1, and 2.4 in 1995, 1994, and 1993, respectively.
Inventory increased $1,765,000 to $19,862,000 in 1995 from $18,097,000 in
1994. This increase is necessary to support increased mail order sales and
additional retail stores. The Company continues to closely monitor its
inventories and believes its inventory position is substantially on plan
relative to the anticipated sales trend.
Prepaid expenses increased $403,000 in 1995. Total current liabilities,
excluding capital lease obligations, ESOP loan guarantee, provision for
store closing and income taxes payable, increased $677,000 in 1995. The
increase in prepaid expenses is attributed to the difference in the timing
of invoice payments. Capitalized leases increased due to the purchase of a
new computer system. During the year $2,791,000 was charged to the
provision for store closure to reflect closing ten stores. See Note 3 of
Notes to Consolidated Financial Statements for additional disclosure
related to the provision for store closure.
The current income tax receivable of $213,000 for 1995 and $881,000 for
1994 represents the anticipated refund of taxes paid based upon required
estimated tax payments that exceeded the Company's liability. The change
in income taxes from a receivable of $426,000 in 1992 to a payable position
of $258,000 in 1993 is due to the receivables being applied to the
Company's 1993 taxes due.
Deferred catalog cost increased $527,000. The increase is attributable to
the timing difference of catalog mailings.
Stockholders' equity was $36,599,000, $34,413,000, and $36,615,000 in 1995,
1994, and 1993, respectively. Equity per share was $4.21, $3.88, and $4.11
in 1995, 1994, and 1993, respectively.
During the year more than $3,829,000 was invested in new stores, remodels,
fixtures, and equipment. Our capital expenditures budget is approximately
$4,700,000 for fiscal 1996 which we anticipate funding through cash
generated internally from operations.
The Company anticipates it will have sufficient funds generated internally
from operations to support its operating and capital requirements in fiscal
1996 as well as the foreseeable future. If internally generated funds are
not sufficient, capital expenditures will be limited to the extent that
funds are internally available. In the near term, if Frederick's of
Hollywood, Inc. were to limit capital expenditures, there would be no
substantial impact on current operations.
Catalog mailing cost and paper prices will rise in Fiscal 1996.
Effective January 1995 the United States Postal Service's third-class
mailing rates increased 14 percent, which is the rate assigned for the
Company's catalog mailings. In addition, in Fiscal 1995, cumulative
catalog paper prices increased 52% with further increases expected for
Fiscal 1996.
At this point, the Company can not determine the exact increase for Fiscal
1996 but estimates that the total increase in paper and postage for the
full fiscal year will be in excess of $2,000,000. While many of these
increases will have to be absorbed as a rise in the cost of doing business,
the Company is evaluating various ways to reduce the impact of these
increased costs.
Seasonality
The Company's business is seasonal in nature with the Holiday Season and
Valentine's Day (which both fall within the second quarter) historically
accounting for the largest percentage of sales volume. In the Company's
two most recent fiscal years, the second quarter accounted for
approximately 30% of the Company's annual sales.
Impact of Inflation
The primary inflationary factor related to the Company's operations is
reflected in higher store rentals. Furthermore, some of the Company's
present leases provide for the escalation of annual rentals based upon
increases in specific cost of living indices. The Company expects that
most of the leases it enters into in the future will contain similar
provisions.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial Statements: Page
Report of Independent Auditors............................ 11
Consolidated Statements of Operations..................... 12
Consolidated Balance Sheets .............................. 13
Consolidated Statements of Cash Flows..................... 14
Consolidated Statements of Changes in Stockholders' Equity 15
Notes to Consolidated Financial Statements ............... 16
Financial Statement Schedules:
Schedules and notes not included have been omitted because they are
not applicable or the required information is included in the consolidated
financial statement and notes thereto.
Supplementary Data:
Quarterly Financial Summary (unaudited).................. 23
INDEPENDENT AUDITORS' REPORT
To the Directors and Stockholders of Frederick's of Hollywood, Inc.:
We have audited the accompanying consolidated balance sheets of Frederick's
of Hollywood, Inc. and subsidiaries as of September 2, 1995, and September
3, 1994 and the related consolidated statements of operations, changes in
stockholders' equity, and cash flows for each of the years in the three-
year period ended September 2, 1995. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Frederick's of Hollywood, Inc. and subsidiaries as of September 2, 1995,
and September 3, 1994, and the results of their operations and their cash
flows for each of the years in the three-year period ended September 2,
1995 in conformity with generally accepted accounting principles.
As discussed in Note One to the consolidated financial statements, the
Company adopted Statement of Financial Accounting Standards No. 109 in the
year ended September 3, 1994.
KPMG Peat Marwick LLP
Los Angeles, California
October 27, 1995
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS
(000's Omitted, except per share data)
1995 1994 1993
<S> <C> <C> <C>
Net sales $142,931 $132,153 $128,516
Costs and expenses:
Cost of goods sold,
buying and occupancy costs 84,203 77,409 72,894
Selling, general and
administrative expenses 54,957 52,530 47,694
Provision for store closing (790) 3,442 --
138,370 133,381 120,588
Operating profit(loss) 4,561 (1,228) 7,928
Other income (expense):
Interest expense (118) (150) (152)
Miscellaneous (31) (327) (121)
(149) (477) (273)
Earnings(loss) before income taxes 4,412 (1,705) 7,655
Income taxes 1,760 (682) 2,918
Earnings (loss) before cumulative
effect of a change in
accounting principle 2,652 (1,023) 4,737
Cumulative effect of a change
in accounting principle -- 120 --
Net earnings(loss) $ 2,652 $ (903) $ 4,737
Earnings(loss) per share
Primary - Classes A & B $ .31 $ (.10) $ .53
Fully diluted - Classes A & B $ .30 $ (.10) $ .53
Weighted average shares outstanding
Primary - Classes A & B 8,693 8,876 8,915
Fully diluted - Classes A & B 8,702 8,875 8,926
</TABLE>
See accompanying notes to consolidated financial statements.
<TABLE>
CONSOLIDATED BALANCE SHEETS
(000's Omitted)
<S> <C> <C>
ASSETS 1995 1994
CURRENT ASSETS:
Cash and cash equivalents $11,441 $10,556
Accounts receivable 658 528
Income tax receivable 213 881
Merchandise inventories 19,862 18,097
Deferred income taxes 765 1,630
Prepaid expenses 2,615 2,212
Total current assets 35,554 33,904
PROPERTY AND EQUIPMENT, AT COST:
Land 128 128
Buildings and improvements 698 570
Fixtures and equipment 13,473 12,196
Leasehold improvements 18,878 19,101
Property under capital leases 1,686 2,393
34,863 34,388
Less accumulated depreciation and amortization (16,638) (14,496)
Net property and equipment 18,225 19,892
Deferred catalog costs 2,107 1,583
Other assets 39 38
TOTAL ASSETS 55,925 $55,417
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $11,617 $11,225
Dividends payable 221 --
Current portion of:
Capital lease obligations 200 434
ESOP loan guarantee 240 240
Accrued payroll 526 619
Accrued insurance 1,018 755
Provision for store closings -- 2,791
Other accrued expenses 469 354
Total current liabilities 14,291 16,418
Capital lease obligations 884 267
ESOP loan guarantee 480 720
Deferred rent 669 511
Deferred income taxes 3,002 3,088
STOCKHOLDERS' EQUITY:
Capital stock of $1 par value
Authorized 15,000,000 Class A shares,
35,000,000 Class B shares; issued
2,955,000 Class A shares, 5,903,000
Class B shares in 1995 and 1994 8,858 8,858
Additional paid-in capital 738 785
Reduction for ESOP loan guarantee (701) (960)
Treasury stock (5) --
Retained earnings 27,709 25,730
TOTAL STOCKHOLDERS' EQUITY 36,599 34,413
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY 55,925 $55,417
</TABLE>
See accompanying notes to consolidated financial statements.
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(000's Omitted)
1995 1994 1993
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $2,652 $ (903) $4,737
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Provision for store closing (1,852) 3,290 --
Depreciation and amortization 4,105 4,206 4,011
ESOP Compensation 224 -- --
Loss on sale of fixed assets 431 358 198
Changes in assets and liabilities:
Accounts receivable (130) (54) 142
Income tax receivable 668 (881) 426
Merchandise inventories (1,948) (753) (2,792)
Prepaid expenses (403) (746) 50
Deferred catalog costs (524) 183 (575)
Other assets (1) 5 10
Accounts payable and
accrued expenses 677 3,011 244
Deferred rent 158 215 179
Deferred income taxes 779 (1,062) 412
Income taxes payable -- (258) 258
Net cash provided by operating activities 4,836 6,611 7,300
Cash flows from investing activities:
Proceeds from sale of fixed assets 205 2 4
Capital expenditures (3,082) (2,348) (3,736)
Net cash used for investing activities (2,877) (2,346) (3,732)
Cash flows from financing activities:
Payment of capital lease obligations (365) (506) (456)
Payment of dividends (431) (443) (442)
Payment of dividends on unearned
ESOP shares (11) -- --
Purchase of treasury stock (26) -- --
Proceeds from exercise of
stock options -- 108 116
Net increase (decrease) in ESOP
loan guarantee (liability) (240) 960 --
Reduction for ESOP loan
guarantee (equity) -- (960) --
Stock split (1) (4) --
Net cash used for financing activities (1,074) (845) (782)
Net increase in cash and cash equivalents 885 3,420 2,786
Cash and cash equivalents at
beginning of year 10,556 7,136 4,350
Cash and cash equivalents at
end of year $11,441 $10,556 $7,136
Supplemental disclosure to consolidated
statements of cash flows:
Cash flow information:
Interest paid $ 118 $ 150 $ 152
Income taxes paid 802 1,386 1,821
Non-cash investing and financing
transactions:
Leases capitalized 747 -- --
Dividends declared 221 -- --
Provision for store closing
Fixed asset disposal 756 475 --
Inventory disposal 183 24 --
</TABLE>
See accompanying notes to consolidated financial statements.
<TABLE>
CONSOLIDATED STATEMENTS OF
CHANGES IN STOCKHOLDERS' EQUITY
Capital Additional Treasury
Stock Paid-in ESOP Stock Retained
Amount Capital Loan at cost Earnings
<S> <C> <C> <C> <C> <C>
Balance at August 29, 1992 8,780 598 22,826
Stock options exercised 69 58 --
Shares acquired
and cancelled (8) (3) (45)
Tax benefit from
exercise of stock options -- 45 --
Cash dividends
($.05 per share) -- -- (442)
Net earnings -- -- 4,737
Balance at August 28, 1993 8,841 698 27,076
Stock split (2) (2) --
Stock options exercised 19 75 --
ESOP loan guarantee -- -- $(960) --
Tax benefit from
exercise of stock options -- 14 -- --
Cash dividends
($.05 per share) -- -- -- (443)
Net loss -- -- -- (903)
Stock split -- (1) -- --
ESOP loan guarantee -- (46) (259) --
Purchase of treasury stock -- -- -- (5) (21)
Cash dividends
($0.075 per share) -- -- -- -- (652)
Net earnings -- -- -- -- 2,652
Balance at September 2, 1995 8,858 738 (701) (5) 27,709
</TABLE>
See accompanying notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note One. Summary of Significant Accounting Policies
Principles of Consolidation The consolidated financial statements include
the accounts of Frederick's of Hollywood, Inc. and its wholly owned
subsidiaries. All material intercompany accounts and transactions have
been eliminated in consolidation.
Fiscal Year The Company's fiscal year ends on the Saturday closest to
August 31. Fiscal years 1995, 1994, and 1993 ended on September 2,
September 3, and August 28, respectively. Fiscal years 1995 and 1993
consisted of 52 weeks, while fiscal year 1994 consisted of 53 weeks.
Cash and Cash Equivalents The Company considers highly liquid investments
with an initial maturity of three months or less to be cash equivalents.
Cash equivalents are carried at cost, which approximates fair value.
Inventories Merchandise inventories are valued at the lower of cost or
market on the first-in, first-out basis.
Depreciation and Amortization Properties and equipment are depreciated on
the straight-line method based upon useful lives which range from 10 to 25
years for buildings and improvements and four to ten years for equipment.
Leasehold improvements are amortized over the remaining term of the lease.
Income Taxes In February 1992, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes". Statement 109 required a change from the deferred method of
accounting for income taxes of APB Opinion No. 11 to the asset and
liability method of accounting for income taxes. Under the asset and
liability method of Statement 109, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are
expected to be recovered or settled. Under Statement 109, the effect on
deferred tax assets and liabilities of a change in tax rates is recognized
in income in the period that includes the enactment date.
Effective August 29, 1993, the Company adopted Statement 109 and has
reported the cumulative effect of that change in the method of accounting
for income taxes in the 1994 consolidated statement of operations.
Pursuant to the deferred method under APB Opinion No. 11, which was applied
in 1993 and prior years, deferred income taxes are recognized for income
and expense items that are reported in different years for financial
reporting purposes and income tax purposes using the tax rate applicable
for the years of the calculation.
Reclassifications Certain reclassifications have been made to the prior
years' consolidated financial statements to conform to the 1995
presentation.
Note Two. Earnings Per Share
Earnings per share calculations are based on the weighted average
number of shares of common stock outstanding during each period plus
common stock equivalents. Common stock equivalents reflect the
assumed exercise of dilutive employees' stock options less the number
of treasury shares assumed to be purchased from the proceeds using
average market price or, for fully diluted earnings per share, the
greater of the average market price or period end market price of the
Company's common stock.
The Company has two classes of stock, Class A capital stock and Class
B capital stock. Both classes of stock have substantially identical
rights, including dividend rights, except that the Class A stock will
have one vote per share and Class B stock will be non-voting, unless
such class is entitled to vote as a matter of law.
<TABLE>
(In thousands except per share data) 1995 1994 1993
<S> <C> <C> <C>
Net earnings (loss) $2,652 (903) 4,737
Earnings (loss) per share
before cumulative effect
of a change in accounting
principle
Primary $ .31 (.11) .53
Fully diluted $ .30 (.11) .53
Per share cumulative effect
of change in accounting
principle
Primary $ -- .01 --
Fully diluted $ -- .01 --
Earnings (loss) per common
and equivalent share
Primary $ .31 (.10) .53
Fully diluted $ .30 (.10) .53
Common and common
equivalent shares
(weighted average)
Primary 8,693 8,876 8,915
Fully diluted 8,702 8,875 8,926
</TABLE>
Note Three. Provision for Store Closing
In the fourth quarter of Fiscal 1994, the Company recorded a provision for
closing twelve stores and the write down of certain display fixtures of
$3,442,000. The provision reflects anticipated costs associated with lease
buyouts of $1,710,000, the non-recoverable investment in property,
equipment and inventory of $1,644,000, and other expenses directly related
to the store closings of $88,000.
In the fourth quarter of fiscal 1995, the Company recorded a $790,000 pre-
tax credit to the provision for store closing due to favorable lease
settlements from landlords on some closed stores and the inability of the
Company to close two stores out of the original 12 stores identified for
closure because of changing business and economic conditions that made
closing these two stores financially unfeasible.
Charges against the store closing reserve for fiscal years 1995 and 1994,
were $2,791,000 and $651,000, respectively. The summary for these charges
are as follows (000's Omitted):
1995 1994
Lease buyouts $1,055 $ 150
Fixed assets/inventory 939 499
Other expenses 7 2
Unutilized portion of provision 790 --
TOTAL $2,791 $ 651
The consolidated statement of operations includes sales and operating
losses for the ten stores designated in the provision for store closing
that were actually closed. A summary for the fiscal years 1995 and 1994 is
as follows (000's Omitted):
1995 1994
Net sales $732 $1,909
Operating loss 140 440
Note Four. Income Taxes
As discussed in Note One, the Company adopted Statement 109 as of August
29, 1993. The cumulative effect of this change in accounting for income
taxes of $120,000 was determined as of August 29, 1993 and was reported
separately in the consolidated statement of operations for the year ended
September 3, 1994. Prior years' financial statements were not restated to
apply the provisions of Statement 109.
The provisions for income taxes are as follows (000's Omitted):
1995 1994 1993
Current: Federal $ 910 $ 217 $ 2,045
State 71 43 461
Deferred: Federal 573 (764) 372
State 206 (178) 40
$1,760 $(682) $ 2,918
A reconciliation of income tax expense with the expected tax expense
computed by applying the statutory Federal income tax rate to earnings
before income taxes follows (000's Omitted):
1995 1994 1993
Earnings (loss)
before taxes $4,412 100.0% $(1,705) 100.0% $7,655 100.0%
Computed "expected"
tax expense (benefit) $1,500 34.0% $ (580) 34.0% $2,603 34.0%
State taxes, net of
Federal tax benefit
(expense) 183 4.2% (89) 5.2% 331 4.3%
Other items 77 1.7% (13) 0.8% (16) (0.2%)
$1,760 39.9% $ (682) 40.0% $2,918 38.1%
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at
September 2, 1995, and September 3, 1994 are presented below:
Deferred tax assets: 1995 1994
Provision for store closing $ -- $ 1,139
Inventories, principally due to
additional cost inventories
for tax purposes pursuant to
the Tax Reform Act of 1986 705 577
Accrued expenses 60 20
Total deferred tax assets 765 1,736
Deferred tax liabilities:
Property and equipment, principally due to
differences in depreciation (3,002) (3,194)
Net deferred tax liability $(2,237) $(1,458)
The Company has not provided for a valuation allowance against its deferred
tax assets as realization of such assets is considered to be more likely
than not.
The provisions (credits) for deferred income taxes for 1993 which result
from timing differences in recognition of earnings for tax and financial
statement purposes are summarized as follows:
1993
Excess of tax over financial statement depreciation $378
State taxes (2)
Inventory capitalization (2)
Accruals not currently tax deductible 29
Sales of fixed assets 9
$412
Note Five. Stockholders' Equity
On October 14, 1993 the stockholders approved two amendments to the
Company's Certificate of Incorporation. The amendments which were
effective October 15, 1993 resulted in: a) a one-for-three reverse split of
the Company's Capital Stock; b) a reclassification of each share of
existing capital stock as new Class A Capital Stock, $1.00 par value; c) a
distribution of two shares of Class B Capital Stock, $1.00 par value, (non-
voting) for each share of Class A Capital Stock; and, d) an increase in the
authorized number of shares of Capital Stock from 20,000,000 to 50,000,000
consisting of 15,000,000 shares of Class A Capital Stock and 35,000,000
shares of Class B Capital Stock. Stock option and per share data have been
retroactively adjusted to reflect the above.
Note Six. Employee Stock Option and Benefit Plans
The Company has two stock options plans - The 1984 Plan which expired on
September 26, 1994, and the 1990 Plan("The Plans") which provide for the
granting of incentive stock options to officers or other key employees for
the purchase of up 750,000 shares (250,000 Class A Capital Stock, 500,000
Class B Capital Stock) of the Company's capital stock. The exercisable
features of the stock options are established by the stock option committee
at the time of grant. The options are exercisable at prices not less than
the market value at date of grant, and expire no later than ten years after
date of grant. The Plans also provide for the granting of stock
appreciation rights in conjunction with the options. The rights enable the
holder to receive a payment equal to the excess of the fair market value of
the Company's capital stock over the option price at the date of exercise.
Such right may be exercised only if the holder exercises the accompanying
stock option by purchasing one share of stock for each appreciation right
exercised.
Transactions involving the Plans are summarized as follows (000's Omitted):
1995 1994 1993
Outstanding at
beginning of period 1,022 840 746
Granted -- 501 167
Exercised -- (19) (69)
Cancelled (68) (300) (4)
Outstanding at
end of period 954 1,022 840
Price range of options $4.83-9.13 $4.83-9.13 $4.83-9.13
At September 2, 1995, September 3, 1994, and August 28, 1993, 769,000,
341,000, and 485,000 shares, respectively, were exercisable. There were no
stock appreciation rights outstanding during the three-year period ended
September 2, 1995.
The sale of shares acquired from the exercise of incentive stock options
within one year of exercise results in state and federal income tax
benefits to the Company equal to the difference between the market price at
the date of exercise and the option price. During 1995, 1994, and 1993,
$-0-, $14,000, and $45,000, respectively, was credited to additional paid-
in capital for these tax benefits.
During fiscal 1993, the Company established a trust to administer a
leveraged Employee Stock Ownership Plan (ESOP). In January 1994, the ESOP
purchased 357,143 shares of the Company's Class A Capital Stock, financed
by the proceeds from a $1,200,000 note issued by the ESOP and an initial
contribution of $318,968 from the Company. The Company guaranteed the loan
and is obligated to make annual contributions sufficient to enable the ESOP
to repay the loan principal and interest. The terms of the ESOP loan
guarantee include various covenants which provide, among other things, for
the maintenance of a certain fixed charge ratio. The Company was in
compliance for all covenants under the ESOP loan agreement. Charges to
operations for this plan were $303,000 and $288,000 for 1995 and 1994,
respectively.
The shares of stock held by the ESOP have been placed with the ESOP trustee
and are allocated to eligible employees annually. These shares are
allocated in the same proportion that the current year's principal and
interest payments bear to the total principal and interest paid over the
life of the borrowing.
The Company has non-qualified executive savings and retirement plans which
provide benefits for certain executives of the Company. The plans allow
for employee and matching employer contributions as well as an additional
employer contribution in an amount necessary to provide for specified
levels of benefits to participants upon retirement. The Company recorded
expense of $187,000, $190,000, and $188,000 in fiscal 1995, 1994, and 1993,
respectively.
Note Seven. Leases and Commitments
The Company leases warehouse and office equipment under capital leases
expiring in various years through 2000. Future minimum lease payments
under capital leases are as follows (000's Omitted):
1996 $ 200
1997 211
1998 225
1999 238
2000 210
Total minimum lease payments $1,084
Less amount representing interest 160
Present value of minimum lease payments $ 924
There are no executory costs of contingent rental provisions in the capital
leases.
Store, warehouse and office facilities are occupied under operating leases
providing for minimum rental commitments as follows (000's Omitted):
1996 $ 8,793
1997 7,867
1998 6,612
1999 5,592
2000 4,554
2001 and thereafter 8,315
Total minimum payments required $41,733
On substantially all leases, the Company is responsible for incremental
rental increases based on sales, as well as repairs, maintenance and
property taxes. Renewal privileges exist on certain leases. Total rent
expense for 1995, 1994, and 1993 amounted to $11,878,000, $12,015,000, and
$11,615,000, respectively, which included $2,829,000, $2,842,000, and
$2,772,000, respectively, for contingent payments based primarily upon
percentage of sales. The Company records rental expense on a straight line
basis, any excess of rental expense over amounts paid is recorded as
deferred rent.
The Company has outstanding letters of credit of $1,045,000 on September 2,
1995 for import merchandise.
Note Eight. Segment Information
The Company, through its wholly owned subsidiaries, operates a catalog mail
order business and a retail chain of women's specialty boutique stores.
Financial information for each of these two business segments follows
(000's Omitted):
<TABLE>
Retail Catalog Consol
Stores Mail Order Corporate. Total
<S> <C> <C> <C> <C>
1995:
Net sales $76,117 $66,814 -- $142,931
Operating profit 866 3,695 -- 4,561
Depreciation and amortization
of property and equipment 3,691 414 -- 4,105
Capital expenditures 3,281 548 -- 3,829
Identifiable assets 26,124 17,382 $12,419 55,925
1994:
Net sales $72,386 $59,767 -- $132,153
Operating profit (loss) (3,641) 2,413 -- (1,228)
Depreciation and amortization
of property and equipment 3,804 402 -- 4,206
Capital expenditures 2,148 200 -- 2,348
Identifiable assets 27,361 14,989 $13,067 55,417
1993
Net sales $73,202 $55,314 -- $128,516
Operating profit 2,611 5,317 -- 7,928
Depreciation and amortization
of property and equipment 3,634 377 -- 4,011
Capital expenditures 3,392 344 -- 3,736
Identifiable assets 29,965 13,737 $7,136 50,838
</TABLE>
In determining operating profit, various expenses are allocated to segments
on the basis of sales, payroll and estimated assets employed. Identifiable
assets are those directly employed by each segment and allocated on the
basis of estimated usage. Corporate assets are principally cash and cash
equivalents.
Note Nine. Quarterly Results (Unaudited)
Quarterly financial data are summarized below (000's Omitted):
<TABLE>
First Second Third Fourth
Quarter Quarter Quarter Quarter
1995:
<S> <C> <C> <C> <C>
Net sales $36,048 $41,427 $33,312 $32,144
Gross profit 15,539 17,853 13,828 11,508
Net earnings(loss) 1,028 2,184 440 (1,000)
Primary:
Classes A & B .12 .25 .05 (.11)
Fully diluted:
Classes A & B .12 .25 .05 (.11)
1994:
Net sales 31,494 38,962 30,455 31,242
Gross profit 13,566 17,495 12,817 10,866
Net earnings(loss) 305 2,115 322 (3,645)
Primary:
Classes A & B .03 .24 .04 (.41)
Fully diluted:
Classes A & B .03 .24 .04 (.41)
</TABLE>
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
There are no disagreements with the Company's independent auditors.
PART III
Information with respect to the following items is incorporated by
reference in Registrant's 1996 Proxy Statement and notice of annual meeting
for the meeting to be held on February 1, 1996 ("Proxy Statement").
However, information regarding executive officers is contained in Part I of
this report pursuant to General Instruction G of this form.
Item 10. DIRECTOR AND EXECUTIVE OFFICERS OF THE REGISTRANT
Reference is made to the caption in Registrant's Proxy Statement --
"Election of Directors" and is hereby incorporated by reference.
Item 11. EXECUTIVE COMPENSATION
Reference is made to the caption in Registrant's Proxy Statement --
"Executive Compensation" and is hereby incorporated by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Reference is made to the caption in Registrant's Proxy Statement -- "Voting
Securities and Principal Holders Thereof", "Election of Directors", and
"Information Concerning Executive Officers" which are hereby incorporated
by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Not applicable.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
14.(a)(1) Financial Statements
Financial statement for Frederick's of Hollywood, Inc. listed in
the Index to Financial Statements on page 10 are filed as part of this
annual report.
14.(a)(2) Financial Statement Schedules
None
14.(a)(3) Index to Exhibits
Exhibits are as set forth in the "Index to Exhibits" on page 26
of this annual report.
14.(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended
September 3, 1994.
INDEX TO EXHIBITS
Exhibit No. Title
3(a) Certificate of Incorporation (incorporated by reference to
Exhibit 3(a) to Registration Statement on Form S-1, File
No. 2-20034, filed on March 26, 1962)
3(b) Certificate of Amendment to Certificate of Incorporation
effective July 16, 1969 (incorporated by reference to
Exhibit 3(b) to Registration Statement on Form S-1, File
No. 2-35116, filed on October 27, 1969)
3(c) Certificate of Amendment to Certificate of Incorporation
effective February 6, 1984 (incorporated by reference to
Exhibit 3(c) to Form 10-K for fiscal year ended September
2, 1984)
3(d) Certificate of Amendment to Certificate of Incorporation
effective December 24, 1986 (incorporated by reference to
Exhibit 3(d) to Form 10-K for fiscal year ended August 29,
1987)
3(e) Certificate of Amendment to Certificate of Incorporation
filed with the Delaware Secretary of State on February 5,
1992 (incorporated by reference to Exhibit 3(e) to Form
10-K for fiscal year ended August 29, 1992)
3(f) Bylaws, as amended (incorporated by reference to Exhibit
3(d) to Form 10-K for fiscal year ended August 31, 1986)
4 See Exhibits 3(a), 3(b), 3(c) and 3(d) for rights of
capital stock
9 Omitted (Inapplicable)
10(a) Copy of Profit Sharing Plan (incorporated by reference to
Exhibit 10(a) to Form 10-K for the fiscal year ended August
28, 1981)
10(b) Copy of the 1984 Stock Option Plan (incorporated by
reference to Exhibit No. 4.1 to Registration Statement on
Form S-8, File No. 2-97418, filed on April 18, 1985)
10(c) Copy of the 1990 Stock Option Plan (incorporated by
reference to exhibit No. 4.2 to Registration Statement on
Form S-8, File No. 1-8252. Filed on January 31, 1991)
10(d) Copy of the Amended Employment Agreement dated August 31,
1989 with George W. Townson (incorporated by reference to
Exhibits 10(e) to Form 10-K for the fiscal year ended
September 2, 1989)
10(e) Copy of the second amendment to the Amended Employment
Agreement with George W. Townson dated August 30, 1992
(incorporated by reference to Exhibit 10(e) to Form 10-K
for fiscal year ended August 29, 1992)
10(f) Copy of Lease Agreement with LAPCO Industrial Park dated
May 11, 1989 (incorporated by reference to Exhibits 10(d)
to Form 10-K for fiscal year ended September 2, 1989)
10(g) Copy of Executive Savings Plan for key executives effective
June 1, 1989 (incorporated by reference to Exhibit 10(f) to
Form 10-K for fiscal year ended September 2, 1989)
10(h) Copy of Executive Retirement Plan for key executives
effective June 1, 1989 (incorporated by reference to Exhibit
10(g) to Form 10-K for fiscal year ended September 2, 1989)
10(i) Copy of Term Lease Master Agreement with IBM Credit
Corporation identified as Agreement No. 3541686
(incorporated by reference to Exhibit 10(i) to Form 10-K
fiscal year ended August 31, 1991)
10(j) Copy of Frederick's of Hollywood, Inc. Employee Stock
Ownership Plan
10(k) Copy of Frederick's of Hollywood, Inc. Employee Stock
Ownership Plan Trust Agreement
11 Omitted (Inapplicable)
12 Omitted (Inapplicable)
13 Omitted (Inapplicable)
18 Omitted (Inapplicable)
19 Omitted (Inapplicable)
22 List of subsidiaries of Frederick's of Hollywood, Inc.,
(incorporated by reference to Exhibit 22 to Form 10-K for
the fiscal year ended September 4, 1983)
23 Omitted (Inapplicable)
24 Consent of KPMG Peat Marwick LLP
25 Omitted (Inapplicable)
27 Financial Data Schedule
28 Omitted (Inapplicable)
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) or the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized on the
9th day of November 1995.
FREDERICK'S OF HOLLYWOOD, INC.
By: (George W. Townson)
George W. Townson
Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated on November 9, 1995.
Signature Title
Chief Executive Officer and
(George W. Townson) Director (Principal
George W. Townson Executive Officer)
Executive Vice President -
Chief Financial and
Administrative Officer
(John B. Hatfield) (Principal Financial and
John B. Hatfield Accounting officer)
(Morton R. Field) Director
Morton R. Field
Director
William J. Barrett
(Hugh V. Hunter) Director
Hugh V. Hunter
(Merle A. Johnston) Director
Merle A. Johnston
(Richard O. Starbird) Director
Richard O. Starbird
(Sylvan Lefcoe) Director
Sylvan Lefcoe
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-02-1995
<PERIOD-END> SEP-02-1995
<CASH> 11,441
<SECURITIES> 0
<RECEIVABLES> 871
<ALLOWANCES> 0
<INVENTORY> 19,862
<CURRENT-ASSETS> 35,554
<PP&E> 18,225
<DEPRECIATION> 4,105
<TOTAL-ASSETS> 55,925
<CURRENT-LIABILITIES> 14,291
<BONDS> 1,364
<COMMON> 8,858
0
0
<OTHER-SE> 27,701
<TOTAL-LIABILITY-AND-EQUITY> 55,925
<SALES> 142,931
<TOTAL-REVENUES> 142,931
<CGS> 84,203
<TOTAL-COSTS> 84,203
<OTHER-EXPENSES> 54,198
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 118
<INCOME-PRETAX> 4,412
<INCOME-TAX> 1,760
<INCOME-CONTINUING> 2,652
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,652
<EPS-PRIMARY> 0.31
<EPS-DILUTED> 0.30
</TABLE>
