As filed with the Securities and Exchange Commission on April 2, 1997
Registration No. 333-15717
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PRE-EFFECTIVE AMENDMENT
NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
NANTUCKET INDUSTRIES, INC.
--------------------------
(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation or organization)
58-096269
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(I.R.S. employer identification number)
105 Madison Avenue, New York NY 10016 (212) 889-5656
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(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Ronald S. Hoffman
Chief Financial Officer
Nantucket Industries, Inc.
105 Madison Avenue, New York, NY 10016 (212) 889-5656
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(Address, including zip code, and telephone number,
including area code, of agent for service)
Approximate date of commencement of proposed sale to the public: from
time to time after the effective date of this Registration Statement as
determined by market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
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CALCULATION OF REGISTRATION FEE
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- --------------------- ------------------- ------------------------- --------------------- ---------------------
Title of Shares to Amount to be Proposed Maximum Proposed Maximum Amount of
be Registered Registered Offering Price Per Share Offering Price Registration Fee
- --------------------- ------------------- ------------------------- --------------------- ---------------------
- --------------------- ------------------- ------------------------- --------------------- ---------------------
Common Stock, par
value $.10 per share 1,373,370 $3.94 $5,411,077.80 $1,639.72
- --------------------- ------------------- ------------------------- --------------------- ---------------------
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The Common Stock being registered consists of (i) 250,000 shares issued
pursuant to a Common Stock and Convertible Subordinated Debenture Purchase
Agreement dated as of August 13, 1996; (ii) up to 623,370 shares underlying
Convertible Subordinated Debentures in the principal amount of $2,760,000 due
August 15, 2001 which are convertible in accordance with the terms and
conditions as described in the Selling Stockholders and Plan of Distribution
Section of the Prospectus; (iii) 490,000 shares issued in connection with the
Stock Purchase Agreement dated August 18, 1994; and (iv) 10,000 shares issued in
connection with a bank refinancing.
The registration fee is calculated pursuant to Rule 457(c) of the
Securities Act of 1933 by taking the average of the high and low price of the
registrant's Common Stock, par value $.10 per share, on November 1, 1996.
Pursuant to Rule 416, there are also registered hereby such additional
indeterminate number of shares of such Common Stock as may become issuable to
prevent dilution resulting from stock splits, stock dividends or similar
transactions as set forth in the provisions of the Convertible Debentures.
The registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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NANTUCKET INDUSTRIES, INC.
Cross Reference Sheet
Pursuant to Item 501 (b) of Regulation S-K
Showing location in Prospectus of Information
Required by Items of Form S-3
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Form S-3 Item Caption or Location
Number and Location in Prospectus
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1. Forepart of the Registration Statement and
Front cover Page of Prospectus.............. Forepart of the Registration Statement; Outside
Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover Page of
Prospectus.................................. Inside Front Cover Page of Prospectus; Available
Information; Incorporation of Certain Documents by
Reference
3. Summary Information, Risk Factors and Ratio
of Earnings to Fixed Charges................ The Company; Prospectus Summary; Risk Factors
4. Use of Proceeds............................. Use of Proceeds
5. Determination of Offering Price............. Outside Front Cover Page of Prospectus; Selling
Stockholders
6. Dilution.................................... Not Applicable
7. Selling Security Holders.................... Selling Stockholders
8. Plan of Distribution........................ Plan of Distribution
9. Description of Securities to be registered.. Not Applicable
10. Interests of Named Experts and Counsel...... Legal opinions; Experts
11. Material Changes............................ Risk Factors; Incorporation of Certain Documents by
Reference
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12. Incorporation of Certain Information by
Reference................................... Incorporation of Certain Documents by Reference
13. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities................................. Not Applicable
</TABLE>
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SUBJECT TO COMPLETION DATED APRIL 2, 1997
PROSPECTUS
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NANTUCKET INDUSTRIES, INC.
1,373,370 Shares of Common Stock
consisting of 250,000 shares issued pursuant to a Common Stock and
Convertible Subordinated Debenture Purchase Agreement
dated as of August 13, 1996;
623,370 shares issuable upon the conversion of
$2,760,000 principal amount of Convertible Subordinated Debentures
Due August 15, 2001; 490,000 shares issued in connection with a
Stock Purchase Agreement dated August 18, 1994; and
10,000 shares issued in connection with a bank refinancing.
Nantucket Industries, Inc. (the "Company", the "Registrant" or
"Nantucket") hereby offers 1,373,370 shares of Common Stock, $.10 par value,
("Common Stock" or the "Shares") consisting of (i) 250,000 shares issued
pursuant to a Common Stock and Convertible Subordinated Debenture Purchase
Agreement dated as of August 13, 1996 (the "Purchase Agreement"); (ii) up to
623,370 shares underlying Convertible Subordinated Debentures in the principal
amount of $2,760,000 due August 15, 2001 which are convertible in accordance
with the terms and conditions as described in the Selling Stockholders and Plan
of Distribution Section of the Prospectus; (iii) 490,000 shares issued in
connection with the Stock Purchase Agreement dated August 18, 1994; and (iv)
10,000 shares issued in connection with a bank refinancing.
The Company's Common Stock, par value $.10 per share, is listed on the
American Stock Exchange. The closing bid price of the Common Stock on the
American Stock Exchange on April 1, 1997 was $2.00 per share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE
OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 8.
There will be no fees or commissions paid by the Selling Stockholders
on the conversion of the Convertible Debentures described herein. It is
anticipated that usual and customary brokerage fees will be paid by the Selling
Stockholders on the sale of the Common Stock registered hereby. The Selling
Stockholders will receive all of the proceeds of this offering and the Company
will not receive any of the proceeds. The Company will pay the other expenses of
this offering. See "Plan of Distribution." The offer of 1,373,370 shares of
Common Stock to the convertible debenture holders and stockholders as described
in this Prospectus is collectively referred to as the "Offering."
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The date of this Prospectus is _____________
No dealer, salesman or other person has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus in connection with the offer
contained in this Prospectus, and, if given or made, such other information or
representations must not be relied upon as having been authorized by the Company
or the Selling Stockholders. This Prospectus does not constitute an offer to
sell or a solicitation of an offer to buy the securities offered hereby in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of the Company since the date
hereof
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company with the Commission can be
inspected and copied at the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, Room 1024 and at the public
reference facilities maintained by the Commission on the 14th Floor, 75 Park
Place, New York, New York 10007; Suite 1400, Northwestern Atrium Center, 500
West Madison Street, Chicago, Illinois 60661; and Suite 500 East, Securities and
Exchange Commission Building, 5757 Wilshire Boulevard, Los Angeles, California
90036. Copies can be obtained from the Commission at prescribed rates by writing
to the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. In
addition, such reports, proxy statements and similar information can be
inspected and copied at the offices of the American Stock Exchange, 86 Trinity
Place, New York, New York 10006. This prospectus, which constitutes part of a
Registration Statement filed by the Company with the Commission under the
Securities Act of 1933 (the "Securities Act') omits certain of the information
contained in the Registration Statement in accordance with the rules and
regulations of the Commission. Reference is hereby made to the Registration
Statement and to the Exhibits relating thereto for further information with
respect to the Company and the Securities offered hereby.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for its fiscal year ended
March 2, 1996 as amended on June 28, 1996 and January 20, 1997; the Quarterly
Reports on Form 10-Q for the quarters ended June 1, 1996, August 31, 1996 (as
amended on January 26, 1997) and November 30, 1996; a Current Report on Form 8-K
filed August 30, 1996; a Current Report on Form 8-K filed on March 12, 1997; and
the description of the Company's Common Stock contained in its Registration
Statement on Form S-1 dated October 17, 1983, all of which have been previously
filed with the Commission, are incorporated in this Prospectus by reference. All
documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 after the date hereof and prior to the
termination of the offering made hereby are also incorporated by reference
herein. Any statement contained in a
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document incorporated by reference herein is modified or superseded for all
purposes to the extent that a statement contained in this Prospectus or in any
other subsequently filed document which is incorporated by reference modifies or
replaces such statement. The Company will provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus is delivered,
upon the written or oral request of such person, a copy of all documents
incorporated herein by reference (not including the exhibits to such documents,
unless such exhibits are specifically incorporated by reference in such
documents). Requests for such copies should be directed to: Ronald S. Hoffman,
Chief Financial Officer, Nantucket Industries, Inc., 105 Madison Avenue, New
York, NY 10016; telephone number (212) 889-5656.
PROSPECTUS SUMMARY
The following summary information is qualified in its entirety by the
more detailed information appearing elsewhere in this prospectus or incorporated
herein by reference and the financial statements which are incorporated herein
by reference.
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<S> <C>
THE COMPANY............................................ Nantucket Industries, Inc. (the "Company") produces and
distributes popular priced branded men's fashion
undergarments for sale, throughout the United States, to
mass merchandisers and national chains. The Company
also produces, under the Guess? label, women's innerwear
which it sells to department and specialty stores.
RISK FACTORS........................................... The Offering involves substantial risk. See "Risk
Factors."
SECURITIES OFFERED..................................... 1,373,370 shares of Company Common Stock, par value,
$.10 per share.
OFFERING PRICE......................................... All or part of the Shares offered hereby may be sold
from time to time in amounts and on terms to be
determined by the Selling Stockholders at the time of
sale.
USE OF PROCEEDS........................................ The Company will receive no part of the proceeds from
the sale of the shares registered pursuant to this
Registration Statement.
SELLING STOCKHOLDERS................................... The shares being offered hereby are being offered for
the account of the Selling Stockholders specified under
the caption "Selling Stockholders."
AMEX TRADING SYMBOL.................................... NAN
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THE COMPANY
Nantucket Industries, Inc. (the "Company") produces and distributes
popular priced branded men's fashion undergarments for sale, throughout the
United States, to mass merchandisers and national chains. Nantucket also
produces, under the GUESS? label, women's innerwear which it sells to department
and specialty stores. This allows the Company to be a major supply source for
men's and women's undergarments and intimate apparel covering many retail price
points. Production and distribution of the Company's product lines is based in
its facility in Cartersville, Georgia. In addition, substantial quantities of
the Company's products are manufactured by offshore production contractors
located in the Far East, Caribbean Basin and Mexico.
Since its founding in 1947, the Company has gradually evolved into a
major manufacturer of high fashion, creatively styled men's and ladies'
undergarments. The Company manufactures and sells men's fashion underwear to
mass merchandisers and, in the case of the GUESS? division, ladies' innerwear to
better department and specialty stores, primarily through direct contact by
salaried and commissioned Company sales personnel. All sales are made to
customers generally not affiliated with the Company. These goods are sold under
various licensed trademarks as well as under the private label of the customer.
The Company promotes its brand name undergarments with seasonal marketing
programs and sales events. The Company sells ladies' innerwear under the
licensed trademark "GUESS?".
The Company's men's fashion briefs are sold primarily under the
licensed trademarks "BRITTANIA" and "ARROW". The Company targets undergarments
marketed under each of these trademarks to different segments of the market. On
January 22, 1997, Levi Strauss & Co. announced that it is seeking purchasers for
its Brittania Sportswear subsidiary from whom the Company licenses the trademark
"Brittania". The Company has been advised by one of its major customers, K-Mart,
that it is reviewing its on-going commitment to the trademark "Brittania from
Levi Strauss & Co." in light of the announcement by Levi Strauss. A decision by
K-Mart to cease selling underwear under the Brittania trademark could have a
material adverse effect on the Company, if such sales were not replaced. The
Company is unable to assess the other ramifications, that the decision by Levi
Strauss & Co. to sell the Brittania brand will have on the sale of its products
and its customers. Due to these events, on March 7, 1997, the Company filed a
Complaint in the Superior Court of California, County of San Francisco, against
Levi Strauss & Co. and its wholly-owned subsidiary, Brittania Sportswear Ltd.,
seeking compensatory damages in excess of $37,000,000. In addition, the Company
is seeking injunctive relief and an undisclosed amount of punitive damages.
Currently, the Company is unable to assess the impact of these actions. See
"Material Licenses and Trademarks" and "Dependence on Major Customers."
The Company was incorporated under Delaware law in 1966. The Company's
principal executive office is located at 105 Madison Avenue, New York, New York
10016 and its telephone number is (212) 889-5656.
RISK FACTORS
An investment in the Shares offered hereby involves a high degree of
risk and should not be made by persons who cannot afford the loss of their
entire investment. The following factors, in addition to those discussed
elsewhere in this Prospectus, should be considered carefully in evaluating the
Company and its business.
Financial Condition and History of Losses. The Company had net losses
of $2,356,909 for the nine months ended November 30, 1996 and $239,000,
$3,146,000 and $9,450,000 for the fiscal years ended March 2, 1996, February 25,
1995 and February 26, 1994, respectively. In addition, the Company anticipates a
loss in the fourth quarter ended March 1, 1997. The Company has not yet fully
realized the benefits from its turnaround strategy commenced in fiscal 1994
which included closing an unprofitable Puerto Rico facility in July 1994,
eliminating unprofitable product lines, strengthening the senior management at
the fiscal year end 1994 and making numerous operational and financial
improvements. Therefore, to obtain the necessary resources to finance the
revenue growth expected from the Company's Guess? product
-8-
line and requisite inventory and receivables, the Company secured additional
financing to provide for its working capital needs. On August 15, 1996, the
Company completed a transaction with NAN Investors, Inc. providing for the
issuance of $2,760,000 Convertible Subordinated Debentures convertible for up to
623,370 shares of Common Stock and the issuance of 250,000 shares of Common
Stock. The proceeds of this financing will also be used to facilitate expanded
vendor sources and promote more favorable pricing of the Company's products.
Material Licenses and Trademarks
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On December 7, 1992, the Company signed an agreement with GUESS?, Inc.
for the exclusive United States rights to produce and sell men's and women's
undergarments bearing the "GUESS?" trademark and variations thereof. Effective
May 31, 1996, the license was extended through the period ended May 31, 1999 and
amended so that the Company is no longer authorized to sell men's underwear
products. Minimum royalties of $70,000 for the 18-month period ended May 31,
1994, $105,000 for the 12 month period ended May 31, 1995 and $140,000 for the
period to end May 31, 1996 were exceeded. Minimum royalties increased to
$560,000 for the 12-month period ending May 31, 1997, $700,000 for the year
ending May 31, 1998 and $840,000 for the year ending May 31, 1999 thereafter.
The license is subject to termination prior to its expiration if certain minimum
sales goals are not met. Such minimum sales goals of $1 million for the 18-month
period December 1, 1992 through May 31, 1994, $2 million for the 12 months ended
May 31, 1995 and $3 million for the period to end May 31, 1996 were exceeded.
For the contract year ending May 31, 1997, minimum sales of $8 million are
required. For each contract year ending in May thereafter, the minimum sales
goal increases by $2,000,000. The Company began shipping product under this
trademark during the third quarter of fiscal 1994. Net sales of GUESS? products
were $4.9 million in fiscal 1996, $3.2 million in fiscal 1995 and $620,000 in
fiscal 1994. Sales for the contract year ended May, 1996 exceeded the minimum.
These minimum sales levels were established based on comprehensive sales
projections. These sales projections reflect modest sell-through assumptions,
growth in retail distribution channels, development of expanded product lines
and timely production. Based on these projections, management believes that the
minimum sales levels will be achieved.
The information reflected above contains "forward-looking statements"
which can be identified by the use of forward-looking terminology including
"believes" and "will". No assurance can be given that the future results
covered by the forward-looking statements will be achieved.
On September 6, 1988, the Company acquired a license with BRITTANIA
Sportswear, Ltd. a wholly owned subsidiary of Levi Strauss, to manufacture and
market men's underwear and ladies' intimate apparel, including bra and panty
coordinates, and, as of January, 1996, men's and ladies' loungewear, under the
trademark "BRITTANIA." The license had an initial term expiring in December 1996
and was renewed for a term continuing through December 1999. Minimum royalties
are guaranteed under this license as follows; $144,000 in calendar year 1994,
$220,000 in calendar year 1995, $230,000 in calendar year 1996, $240,000 for
calendar year 1997, $245,000 in calendar year 1998 and $250,000 in calendar year
1999. Sales under this license represented approximately $14.6 million in fiscal
1996, $14.2 million in fiscal 1995, $6.9 million in fiscal 1994 and $11,600,000
for the nine months ended November 30, 1996. On January 22, 1997, Levi Strauss &
Co. announced that it is seeking purchasers for its Brittania Sportswear
subsidiary. The Company has been advised by one of its major customers, K-Mart,
that it is reviewing its on-going commitment to the trademark "Brittania from
Levi Strauss & Co." in light of the announcement by Levi Strauss. A decision by
K-Mart to cease selling underwear under the Brittania trademark could have a
material adverse effect on the Company, if such sales were not replaced. The
Company is unable to assess the other ramifications, that the decision by Levi
Strauss & Co. to sell the Brittania brand will have on the sale of its products
and its customers. Due to these events, on March 7, 1997, the Company filed a
Complaint in the Superior Court of California, County of San Francisco, against
Levi Strauss & Co. and its wholly-owned subsidiary, Brittania Sportswear Ltd.,
seeking compensatory damages in excess of $37,000,000. In addition, the Company
is seeking injunctive relief and an undisclosed amount of punitive damages.
Currently, the Company is unable to assess the impact of these actions. See
"Dependence on Major Customers."
The Company's license for use of the "BRUT" and "BRUT 33" trademarks in
connection with its men's' undergarments expires in February 1998. The license
may, however, be revoked prior to its expiration, at the licensor's option, in
the event that net sales are less than $5,000,000 in any fiscal year. Products
sold under the "BRUT" and "BRUT 33" license agreements represented
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$5.1 million in fiscal 1996, $6.5 million in fiscal 1995 and $8.3 million in
fiscal 1994. A minimum royalty of $100,000 is guaranteed under the License for
each annual period.
On October 5, 1992, the Company signed an agreement with Cluett,
Peabody & Co., Inc. for the exclusive United State rights to produce and sell
men's' and boys' fashion underwear, T-shirts, V-neck shirts, tank tops, briefs
and boxer shorts bearing the "ARROW" trademark during the period commencing
January 1, 1993 and expiring, as extended, through December 31, 1999. A minimum
royalty of $162,500 is guaranteed under the license for each annual period
commencing January 1, 1993 and expiring on December 31, 1996; and a minimum
royalty of $250,000 is guaranteed for each such period during the extension
period. The Company began shipping product under this trademark during the first
quarter of fiscal 1994. Net sales under this license were $4.8 million in fiscal
1996, $4.3 million in fiscal 1995 and $6.3 million in fiscal 1994.
On December 21, 1992, the Company signed an agreement with McGregor
Corporation for the exclusive United State rights to produce and sell men's' and
boys' fashion knit underwear briefs bearing the "BOTANY 500" trademark during
the period commencing on January 1, 1993 and expiring, pursuant to an extension,
December 31, 1998 with further extensions through December 31, 2001. McGregor
Corporation may, at its option, terminate the license prior to its expiration if
certain minimum sales goals are not met. Minimum sales levels for calendar 1996
are $750,000 and $1 million for each calendar year thereafter through December
31, 1998. The Company began shipping product under this trademark during the
first quarter of fiscal 1994. Net sales under this license were $1.1 million in
fiscal 1996, $1.1 million in fiscal 1995 and $991,000 during fiscal 1994.
The loss of the right to sell products under the GUESS?, BRITTANIA or
ARROW labels could have a material adverse effect on the Company.
The Company has long standing relationships with these customers and
believes that such relationships will continue. However, loss of any of these
customers could have a material adverse effect on the Company.
Dependence on Major Customers
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Three of the Company's customers each accounted for more than 10% of
the Company's consolidated net sales during fiscal 1996, 1995 and 1994. For the
fiscal year ended March 2, 1996, approximately 40% of the Company's consolidated
net sales were made to K-Mart, as compared to 43% for fiscal 1995, and 27% for
fiscal 1994; approximately 21% of the Company's consolidated net sales were made
to Target Stores, as compared to 17% for fiscal 1995 and 15% for fiscal 1994;
and approximately 13% of the Company's consolidated net sales were made to
Sears, as compared to sales in the prior fiscal year of 12% and 14% in fiscal
1994.
The Company has long standing relationships with these customers and is
unable at this time to assess the impact the recent announcement of the proposed
sale of the Brittania brand will have on these relationships. In addition, the
Company has been advised by K-Mart that it is reviewing its on-going commitment
to the trademark Brittania from Levi Strauss & Co. in light of the announcement
by Levi Strauss that it is seeking buyers for its Brittania Sportswear
subsidiary. The loss of any of these customers could have a material adverse
effect on the Company. See "Material Licenses and Trademarks."
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No Anticipated Dividends
- ------------------------
The Company has never paid any dividends on its Common Stock and has no
present intention of doing so in the foreseeable future. The Company is
prohibited from declaring and paying cash dividends on its Common Stock by the
terms of its credit agreements with Congress Financial Corporation dated March
22, 1994 and the Common Stock and Convertible Subordinated Debenture Purchase
Agreement.
Recent Sales of Securities and Immediate Dilution
- -------------------------------------------------
As of August 13, 1996, the Company entered into a Common Stock and
Convertible Subordinated Debenture Purchase Agreement with NAN Investors, L.P.
(the "Investor"), pursuant to which the Company sold to the Investor 250,000
shares of Common Stock for an aggregate purchase price of $740,000, and two (2)
12.5% convertible subordinated debentures of the Company in the original
principal amounts of $1,168,150 and $1,591,850, respectively, which debentures
mature on August 15, 2001 and are convertible at the election of the holder into
305,000 and 318,370 additional shares of Common Stock.
Highly Competitive Markets
- --------------------------
All of the Company's markets are highly competitive. During the past
several years there has occurred a reduction in the number of retailers
available to purchase the Company's products. The remaining retailers are
relatively larger and possess strengthened negotiating positions. It has become
increasingly important that the Company cooperate closely with its customers,
who are among the largest retailers in the United States, in the development of
products, programs and packaging and that it be able to quickly and completely
ship orders which it receives through EDI.
The Company competes in the manufacture of its products with numerous
other companies, many of which have substantially greater financial resources
than the Company. The Company's competitors include manufacturers of retailers'
private label, designer label and unbranded merchandise, as well as
manufacturers which produce goods for sale under their own recognized name
brands.
Although the largest producers of branded men's' underwear are Fruit of
the Loom, Inc. and Hanes, the Company does not consider these large national
brands to be its direct competition. The Company primarily produces and sells
fashion underwear either under licensed brands which have consumer recognition
in areas other than undergarments or under so-called "private labels" for
specific retailers.
The Company's largest competition in the GUESS? Division's business are
Calvin Klein and Jockey.
The Company has succeeded in licensing brand names which are
potentially very significant, primarily as a result of its past successes in
extending brand names to its products. The successful implementation of a
typical brand name program requires close coordination between the licensor of
the trademark (who is concerned about the design and quality of product to be
sold under its mark as well as the type of retail outlet in which the product
will be sold), the manufacturer and the
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retailer. The Company considers that it has particular expertise in developing
such programs. Other competitive considerations include product design
expertise, packaging and shipping reliability, all of which are strong areas for
the Company. Of course, there is no assurance that the Company will continue to
be successful in acquiring or retaining licenses to use desirable brand names or
that, once acquired, such brand names will be attractive to consumers.
Dependence on Imported Goods
- ----------------------------
Imports have accounted for an increasing proportion of the Company's
production. At present, the Company fills 70% of its production requirements
through imported merchandise produced in factories in Mexico, the Caribbean and
the Far East. A variety of sources are utilized in order to increase the
reliability of supply. In addition the Company deals with contractors who cut
and sew garments for the Company in various locations including South America
and the Caribbean. The primary factors which determine whether the Company will
import a specific garment, have it produced by contractors or produce it at the
Company's domestic facility are the amount of labor required to produce the
garment and the time available between order and delivery dates. Importing is
most advantageous for garments with a high labor content and relatively long
delivery time. As lead times for orders have become shorter, timely delivery of
imported goods has become increasingly more important. Timely delivery of the
Company's products is dependent upon the availability of materials, efficient
operations of the Company's foreign manufacturing sources and close supervision
of those foreign sources. While the Company believes that it has selected
appropriate manufacturing sources and is providing appropriate levels of control
and supervision, manufacturing and shipping delays may occur which are beyond
the Company's control. Such delays can have a material adverse effect on the
Company's results of operations.
Potential Adverse Effects of Anti-Takeover Provisions
- -----------------------------------------------------
The Company has a Rights Agreement which (as amended on August 15,
1996) becomes effective when more than 35% of the Company's common shares are
acquired by a person or a group. The Company may redeem the rights before such
time. The Company also has certain provisions in its Certificate of
Incorporation and By-Laws which may make it difficult to change control of the
Company and replace management.
USE OF PROCEEDS
The Company will receive no part of the proceeds from the sale of any
of the Shares by the Selling Stockholders.
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DETERMINATION OF CONVERTIBLE SUBORDINATED
DEBENTURES EXERCISE PRICES
The exercise price for the Convertible Debentures set forth in this
Prospectus is described in the footnotes to the Selling Stockholders section
below.
SELLING STOCKHOLDERS
The following table sets forth information concerning the beneficial
ownership of shares of Common Stock by the Selling Stockholders as of the date
of this Prospectus and the number of such shares included for sale in this
Prospectus assuming the sale of all Shares being offered by this Prospectus. A
description of the transactions under which the Selling Stockholders received
the Common Stock being registered herein is set forth under the heading Plan of
Distribution which follows this table. To the best of the Company's knowledge,
except as noted by footnote, none of the Selling Stockholders has held any
office or maintained any material relationship with the Company or any of its
predecessors or affiliates over the past three years. The Selling Stockholders
reserve the right to reduce the number of shares offered for sale or to
otherwise decline to sell any or all of the Shares registered hereunder.
<TABLE>
<CAPTION>
Shares Owned prior to Shares to be sold in Shares owned after
Selling Stockholder Offering(1) Offering Offering(2)
------------------- ----------- -------- -----------
Common Stock
- ------------
<S> <C> <C> <C>
GUESS?, Inc.(3) 323,335 323,335 0
1444 South Alameda Street
Los Angeles, CA 90021
Paul Marciano Trust under trust dated 59,166 59,166 0
2/20/86 (the "Paul Trust")(4)
c/o GUESS?, Inc.
1444 South Alameda Street
Los Angeles, CA 90021
Maurice Marciano Trust 1995 74,666 74,666 0
Restatement (the "Maurice Trust")(5)
150 South Rodeo Drive
Suite 270
Beverly Hills, CA 90212
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Armand Marciano Trust under trust 32,833 32,833 0
dated 2/20/86 (the "Armand Trust")(6)
c/o GUESS?, Inc.
1444 South Alameda Street
Los Angeles, CA 90021
The Chase Manhattan Bank(7) 10,000 10,000 0
60 Broadway
New York, NY 10036
NAN Investors, L.P.(8) 873,370 873,370 0
c/o Fundamental Capital Corp.
291 Ocean Avenue
Lawrence, NY 11559
</TABLE>
1. Pursuant to the rules of the Securities and Exchange Commission,
shares of Common Stock which an individual or group has a right to acquire
within 60 days pursuant to the exercise of options or warrants are deemed to be
outstanding for the purpose of computing the ownership of such individual or
group.
2. Percentage of outstanding Common Stock if more than 1%.
3. GUESS?, Inc. holds 323,335 shares of Common Stock, which were
purchased pursuant to a Stock Purchase Agreement dated August 18, 1994 (the
"GUESS Agreement") and were granted registration rights. By notice to the
Company dated June 26, 1996, GUESS?, Inc. exercised its registration rights.
Pursuant to the terms of the Purchase Agreement, the Guess Group, consisting of
Guess?, Inc., the Paul Trust, the Maurice Trust and the Armand Trust, designates
an individual to serve as a director of the Company and the Company and the
Samberg Group, a limited liability in which Stephen M. Samberg, (the Company's
Chairman), Stephen P. Sussman (an employee of the Company), Raymond L. Wathen
(head of the Company's Guess? Sales Division), Robert Polen (an employee of the
Company) and Toby Hoffman (the wife of the Company's Chief Financial Officer)
are members, each agree to use its best efforts to cause one individual
designated by the Guess Group to be elected as a director of the Company at
future annual meetings so long as the Guess Group and their affiliates
beneficially own in the aggregate at least the lesser of 490,000 shares of
Common Stock or 15% of the outstanding Common Stock. Roger A. Williams, the
Executive Vice President and Chief Financial Officer of Guess?, Inc. was
designated by the Guess Group and currently serves as a director of the Company.
4. Paul Marciano Trust under Trust dated February 20, 1986 holds 59,166
shares of
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Common Stock, which were purchased pursuant to the GUESS Agreement and were
granted registration rights. By notice to the Company dated June 26, 1996, the
Trust exercised its registration rights.
5. Maurice Marciano Trust 1995 Restatement holds 74,666 shares of
Common Stock, which were transferred from the Maurice Marciano 1990 Childrens
Trust, which acquired the shares pursuant to the GUESS Agreement and were
granted registration rights. By notice to the Company dated June 26, 1996, the
Trust exercised its registration rights.
6. Armand Marciano Trust under Trust dated February 20, 1986 holds
32,833 shares of Common Stock, which were purchased pursuant to the Guess
Agreement and were granted registration rights. By notice to the Company dated
June 26, 1996, the Trust exercised its registration rights.
7. The Chase Manhattan Bank holds 10,000 shares of Common Stock
received under the terms of an Amended and Restated Credit Agreement by and
among Chemical Bank, Nantucket Industries, Inc., Nantucket Mills and Nantucket
Management Corporation dated as of March 21, 1994. The Chase Manhattan Bank is
the successor to Chemical Bank.
8. NAN Investors, L.P. holds (i) 250,000 shares of Common Stock, (ii) a
12.5% Convertible Subordinated Debenture due August 15, 2001 in the original
principal amount of $1,168,150, which Debenture is convertible at any time at
the holder's election into 305,000 shares of Common Stock at a price per share
of $3.83 (subject to adjustment in certain cases), and (iii) a 12.5% Convertible
Subordinated Debenture due August 15, 2001 in the original principal amount of
$1,591,850, which Debenture is convertible at any time after June 15, 1997 at
the holder's election into 318,370 shares of Common Stock at a price per share
of $5.00 (subject to adjustment in certain cases).
PLAN OF DISTRIBUTION
Of the 1,373,370 shares being registered herein, (a) 250,000 shares
were purchased under the Purchase Agreement; (b) 623,370 shares underlie the
$2,760,000 principal amount of Convertible Subordinated Debentures, which are
convertible into Common Stock as described in footnote 8 to the Selling
Stockholders table above and the Risk Factor entitled "Recent Sales of
Securities"; (c) 490,000 shares issued in connection with the Stock Purchase
Agreement dated August 18, 1994; and (d) 10,000 shares issued as part of a bank
refinancing.
If the Selling Stockholders elect to convert their Convertible
Subordinated Debentures they will be issued Common Stock from the Company, which
they will be free to sell on AMEX. There will be no charges or commissions paid
to the Company by the Selling Stockholders. It is anticipated that usual and
customary brokerage fees will be paid by the Selling Stockholders. The Company
will pay the other expenses of this Offering. The Shares may be sold by one or
more of the following: (a) a block trade in which the broker so engaged will
attempt to sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction; (b)
-15-
purchases by a broker or dealer as principal and resale by such broker or dealer
for its account pursuant to this Prospectus; (c) an exchange distribution in
accordance with the rules of AMEX; and (d) ordinary brokerage transactions.
EXPERTS
The financial statements consisting of the Consolidated Balance Sheets
of the Company as of March 2, 1996 and February 25, 1995, and related
Consolidated Statements of Operations, Stockholders' Equity and Cash Flows for
each of the three years in the period ended March 2, 1996, and applicable
Schedules thereto, incorporated by reference in this Prospectus and elsewhere in
the registration statement, have been audited by Grant Thornton, LLP,
independent public accountants, as indicated in their report with respect
thereto, and are included herein upon the authority of said Firm as experts in
accounting and auditing in giving said report.
LEGAL OPINIONS
The validity of the shares of Common Stock offered hereby, will be
passed upon for the Company by Lane Altman & Owens LLP, 101 Federal Street,
Boston, Massachusetts 02110.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
-16-
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses in connection with the issuance and distribution of the
Common Stock to be registered are estimated (except for the Securities and
Exchange Commission filing fee) below. All such expenses will be paid by the
Registrant.
Securities and Exchange Commission Filing Fee $ 1,639.72
Accounting Fees and Expenses 10,000.00
Legal Fees and Expenses 20,000.00
Printing and Mailing Costs 200.00
Transfer Agent Fees 250.00
Miscellaneous 500.00
-------------
Total Expenses $32,589.72
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Delaware General Corporation Law, Section 102(b)(7), enables a
corporation in its original certificate of incorporation or an amendment thereto
validly approved by stockholders to eliminate or limit personal liability of
members of its Board of Directors for violations of a director's fiduciary duty
of care. However, the elimination of limitation shall not apply where there has
been a breach of the duty of loyalty, failure to act in good faith, engaging in
intentional misconduct or knowingly violating a law, paying a dividend or
approving a stock repurchase which was deemed illegal or obtaining an improper
personal benefit. Article Sixteenth of the Company's Certificate of
Incorporation includes the following language:
"A director of the Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty
to the Corporation or its stockholders, (ii) for acts of
omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section
174 of the Delaware General Corporation Law, (iv) for any
transaction from which the director derived an improper
personal benefit, or (v) for any act or omission occurring
prior to the effective date of this Article. If the Delaware
General Corporation Law is amended after approval by the
stockholders of this provision to authorize corporate action
further eliminating or limiting the personal liability of
directors, then the liability of a director of the Corporation
shall be eliminated or limited to the full extent permitted by
the Delaware General Corporation Law, as so amended.
-17-
Neither the repeal or modification of the foregoing paragraph,
nor the adoption of any provision of the Certificate of
Incorporation inconsistent with the foregoing paragraph, by
the stockholders of the Corporation shall adversely affect any
right or protection of a director of the Corporation existing
at the time of such repeal, modification or adoption of
inconsistent provision."
Section 145 of the General Corporation Law of the State of Delaware
generally provides that a corporation may indemnify any director, officer,
employee or agent against expenses, judgments, fines and amounts paid in
settlement in connection with any action against him by reason of his being or
having been such a director, officer, employee or agent, if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal action, had no
reasonable cause to believe his conduct was unlawful. No indemnification shall
be made, however, if he is adjudged liable for negligence or misconduct in the
performance of his duty to the corporation, unless a court determines that he is
nevertheless entitled to indemnification. If he is successful on the merits or
otherwise in defending the action, the corporation must indemnify him against
expenses actually and reasonably incurred by him. Article IX of the Bylaws
provides indemnification as follows:
INDEMNIFICATION
"Section 1. Each person who was or is made a party or is threatened to
be made a party to or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he or she is or was a director or an
officer of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation or
of a partnership, joint venture, trust or other enterprise, including service
with respect to an employee benefit plan (hereinafter an "indemnitee"), whether
the basis of such proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held harmless by
the corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
corporation to provide broader indemnification rights than such law permitted
the corporation to provide prior to such amendment), against all expense,
liability and loss (including attorneys' fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid in settlement) reasonably incurred or
suffered by such indemnitee in connection therewith; provided, however, that,
except as provided in Section 3 of this Article IX with respect to proceedings
to enforce rights to indemnification, the corporation shall indemnify any such
indemnitee in connection with a proceeding (or part thereof) initiated by such
indemnitee only if such proceeding (or part thereof) was authorized by the Board
of Directors of the corporation.
Section 2. The right to indemnification conferred in Section 1 of this
Article IX shall include the right to be paid by the corporation the expenses
(including attorneys' fees) incurred in defending
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any such proceeding in advance of its final disposition (hereinafter an
"advancement of expenses"); provided, however, that, if the Delaware General
Corporation Law requires, an advancement of expenses incurred by an indemnitee
in his or her capacity as a director or officer (and not in any other capacity
in which service was or is rendered by such indemnitee, including, without
limitation, service to an employee benefit plan) shall be made only upon
delivery to the corporation of an undertaking (hereinafter an "undertaking"), by
or on behalf of such indemnitee, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which there is no
further right to appeal (hereinafter a "final adjudication") that such
indemnitee is not entitled to be indemnified for such expenses under this
Section 2 or otherwise. The rights to indemnification and to the advancement of
expenses conferred in Sections 1 and 2 of this Article IX shall be contract
rights and such rights shall continue as to an indemnitee who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
indemnitee's heirs, executors and administrators.
Section 3. If a claim under Section 1 or 2 of this Article IX is not
paid in full by the corporation within sixty (60) days after a written claim has
been received by the corporation, except in the case of a claim for an
advancement of expenses, in which case the applicable period shall be twenty
(20) days, the indemnitee may at any time thereafter bring suit against the
corporation to recover the unpaid amount of the claim. If successful in whole or
in part in any such suit, or in a suit brought by the corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the indemnitee
shall be entitled to be paid also the expense of prosecuting or defending such
suit. In (i) any suit brought by the indemnitee to enforce a right to
indemnification hereunder (but not in a suit brought by the indemnitee to
enforce a right to an advancement of expenses) it shall be a defense that, and
(ii) in any suit brought by the corporation to recover an advancement of
expenses pursuant to the terms of an undertaking, the corporation shall be
entitled to recover such expenses upon a final adjudication that, the indemnitee
has not met any applicable standard for indemnification set forth in the
Delaware General Corporation Law. Neither the failure of the corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
suit that indemnification of the indemnitee is proper in the circumstances
because the indemnitee has met the applicable standard of conduct set forth in
the Delaware General Corporation Law, nor an actual determination by the
corporation (including its Board of Directors, independent legal counsel, or its
stockholders) that the indemnitee has not met such applicable standard of
conduct, shall create a presumption that the indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by the
indemnitee, be a defense to such suit. In any suit brought by the indemnitee to
enforce a right to indemnification or to an advancement of expenses hereunder,
or brought by the corporation to recover an advancement of expenses pursuant to
the terms of an undertaking, the burden of proving that the indemnitee is not
entitled to be indemnified, or to such advancement of expenses, under this
Article IX or otherwise shall be on the corporation.
Section 4. The rights to indemnification and to the advancement of
expenses conferred in this Article IX shall not be exclusive of any other right
which any person may have or hereafter
-19-
acquire under any statute, the corporation's Certificate of Incorporation,
by-laws, agreement, vote of stockholders or disinterested directors or
otherwise.
Section 5. The corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the corporation
or another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the corporation would
have the power to indemnify such person against such expense, liability or loss
under the Delaware General Corporation Law.
Section 6. The corporation may, to the extent authorized from time to
time by the Board of Directors, grant rights to indemnification and to the
advancement of expenses to any employee or agent of the corporation to the
fullest extent of the provisions of this Article with respect to the
indemnification and advancement of expenses of officers and directors of the
corporation."
ITEM 16. EXHIBITS
The following documents have been previously filed as Exhibits and are
incorporated herein by reference except those exhibits indicated with an
asterisk which are filed herewith:
Exhibit No. Description
4(e) Common Stock Purchase Agreement as of August
18, 1994 by and among Registrant, Guess?,
Inc., the Maurice Marciano 1990 Childrens
Trust, the Paul Marciano Trust u/t/d
2/20/86, the Armand Marciano Trust u/t/d
2/20/86 and The Samberg Group, L.L.C. (filed
as Exhibit 4(d) to Form 8-K dated August 19,
1994.)
4(i) Form of Common Stock Certificate
incorporated by reference to Exhibit No. 4b
of the Company's Registration Statement on
Form S-1 [Reg. No. 2-87229] filed October
17, 1983.
4(ii) Common Stock and Convertible Subordinated
Debenture Purchase Agreement dated as of
August 13, 1996 by and between Nantucket
Industries, Inc. and NAN Investors, L.P.
(filed as Exhibit 4(f) to the Form 8-K filed
August 30, 1996).
4(iii) Form of Convertible Subordinated Debenture
(filed as an Exhibit to Exhibit 4(b) to the
Form 8-K filed August 30, 1996).
5* Opinion Letter of Lane Altman & Owens LLP
regarding legality of shares registered
hereunder.
-20-
10nn Amended and Restated Credit Agreement by and
among Chemical Bank, Nantucket Industries,
Inc., Nantucket Mills, Inc. and Nantucket
Management Corporation dated as of March 21,
1994 (filed as Exhibit 99(g) to Form 8-K
dated August 19, 1994 ) and amended by
Amendment dated as of August 18, 1994 (filed
as Exhibit 99(e) to the Form 8-K dated
August 19, 1994.)
23(a)* Consent of Grant Thornton LLP, independent
public accountants.
23(b)* Consent of Lane Altman & Owens LLP
included in Exhibit 5.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement;
(i) To include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby
undertakes that, for purposes of determining any liability
under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934 that is incorporated by
reference in the Registration Statement shall be deemed to be
a new registration statement relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is,
therefore, unenforceable. In
-21-
the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
-22-
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment
2 to be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of New York, State of New York, on March 31, 1997.
NANTUCKET INDUSTRIES, INC.
By: /s/ Ronald S. Hoffman,
--------------------------------
Ronald S. Hoffman,
Vice President - Finance and Chief
Financial Officer
(principal financial and accounting
officer)
------------------------------------
Pursuant to the requirements of the Securities Act of 1933, this
Amendment has been signed by the following persons, in the capacities and on the
dates indicated.
Date:
- -----
<TABLE>
<CAPTION>
<S> <C>
March 31, 1997 \s\ Stephen M. Samberg
-------------------------
Stephen M. Samberg, Chairman of the Board and Chief
Executive Officer
March 31, 1997 \s\ Joseph Visconti
-------------------------
Joseph Visconti, President and Director
March 31, 1997 \s\ Ronald S. Hoffman
-------------------------
Ronald S. Hoffman, Vice President - Finance and Chief
Financial Officer, Secretary and Director
March 31, 1997 \s\ Warren C. Cole
-------------------------
Warren C. Cole, Director
March 31, 1997 \s\ Donald D. Gold
-------------------------
Donald D. Gold, Director
March 31, 1997 \s\ George J. Gold
-------------------------
George J. Gold, Director
March 31, 1997 \s\ Robert M. Rosen
-------------------------
Robert M. Rosen, Director
March 31, 1997 \s\ Roger A. Williams
-------------------------
Roger A. Williams, Director
March 31, 1997 \s\ Kenneth Klein
-------------------------
Kenneth Klein, Director
</TABLE>
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EXHIBIT 5
LANE ALTMAN & OWENS LLP
ATTORNEYS AT LAW
101 Federal Street Telephone: (617) 345-9800
Boston, Massachusetts 02110 Telecopier: (617) 345-0400
March 31, 1997
Nantucket Industries, Inc.
105 Madison Avenue
New York, New York 10016
Gentlemen:
We have represented Nantucket Industries, Inc., a Delaware corporation
(hereinafter called the "Corporation"), in connection with the proposed offering
described below.
In our capacity as counsel to the Corporation, we are familiar with the
Certificate of Incorporation, as amended, and the By-Laws of the Corporation, as
amended. We are also familiar with the corporate proceedings taken by the
Corporation in connection with the issuance of the convertible debentures and
shares of Common Stock referred to in the Registration Statement on Form S-3 to
which this letter is attached as an exhibit (the "Registration Statement").
Based upon the foregoing, we are of the opinion that:
1. The Corporation is duly organized and validly existing under
the laws of the State of Delaware.
2. The Common Stock issuable upon the conversion of the
$2,670,000 Convertible Subordinated Debentures (the
"Convertible Debentures") has been duly authorized. The Common
Stock may be issued upon exercise of such Convertible
Debentures and such Common Stock will be legally issued, fully
paid and non-assessable.
3. The Common Stock issued to Guess?, Inc., the Paul Marciano
Trust under trust dated February 20, 1986, the Maurice
Marciano Trust 1995 Restatement, and the
Nantucket Industries, Inc.
March 31, 1997
Page 2
Armand Marciano Trust under the Stock Purchase Agreement dated
August 18, 1994 has been duly authorized is validly issued,
fully paid and non-assessable.
4. The Common Stock issued to NAN Investors L.P. in connection
with the Common Stock and Subordinated Debenture Purchase
Agreement dated as of August 13, 1996 has been duly authorized
and is validly issued, fully paid and non-assessable.
5. The Common Stock issued pursuant to the terms of an Amended
and Restated Credit Agreement by and among Chemical Bank,
Nantucket Industries, Inc., Nantucket Mills and Nantucket
Management Corporation dated as of March 21, 1994 has been
duly authorized and is validly issued, fully paid and
non-assessable.
This opinion is provided for the benefit of the addressee hereof.
Nevertheless, we hereby consent to the use of this opinion as Exhibit 5 to said
Registration Statement on Form S-3 and any subsequent post-effective amendments
to said Registration Statement, and to the use of our name as your counsel in
the Registration Statement and in the Prospectus forming a part thereof. In
giving the foregoing consent, we do not hereby concede that we come within any
of the categories of persons whose consent is required under the Act or the
General Rules and Regulations promulgated thereunder.
Very truly yours,
LANE ALTMAN & OWENS LLP
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
We have issued our reports dated April 25, 1996, accompanying the
consolidated financial statements of Nantucket Industries, Inc., appearing in
the 1996 Annual Report of the Company to its shareholders (incorporated by
reference in the Annual Report on Form 10-K/A, as amended on June 28, 1996 and
January 20, 1997 for the year ended March 2, 1996) and accompanying the
schedules included in the Annual Report for the year ended March 2, 1996 which
are incorporated by reference in this Registration Statement. We consent to the
incorporation by reference in the Registration Statement of the aforementioned
reports and to the use of our name as it appears under the caption "Experts."
/s/ Grant Thornton LLP
- ---------------------------
GRANT THORNTON LLP
New York, New York
April 1, 1997
