SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported):
NOVEMBER 26, 1996
L.A. GEAR, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA
(State or other jurisdiction of incorporation)
1-10157
(Commission File Number)
95-3375118
(IRS Employer Identification No.)
2850 OCEAN PARK BOULEVARD, SANTA MONICA, CALIFORNIA 90405
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(310) 452-4327
NOT APPLICABLE
(Former name or former address, if changed since last report)
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Page 1 of 6 pages.
The exhibit index appears on page 4.
Item 5. Other Events.
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On November 26, 1996, L.A. Gear, Inc. (the "Company")
announced the restructuring and consolidating of certain of its
operations pursuant to a cost reduction plan, as described in the
press release attached hereto and filed herewith as Exhibit 99.12
(the "Press Release"). The full text of the Press Release is
incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
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(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
99.12 Press Release of L.A. Gear, Inc. dated November
26, 1996.
SIGNATURES
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Pursuant to the requirements of the Securities
Exchange Act of 1934, as amended, the registrant has duly
caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
L.A. GEAR, INC.
Dated: November 26, 1996 By: /s/ Thomas F. Larkins
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Thomas F. Larkins
Chief Administrative Officer
EXHIBIT INDEX
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Exhibit Page
No. Document No.
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99.12 Press Release of L.A. Gear, Inc.
dated November 26, 1996. 5
Contact: Victor J. Trippetti
L.A. Gear, Inc.
310-581-7146
L.A. GEAR ANNOUNCES FOURTH QUARTER RESTRUCTURING
CHARGE AND EXECUTIVE REORGANIZATION
SANTA MONICA, CALIFORNIA, November 26, 1996 -- L.A. Gear,
Inc. (NYSE:LA) announced today that, in light of continuing
operating losses, the Company has adopted a cost reduction plan
aimed at bringing the Company's operating expenses in line with
its anticipated sales base. This plan primarily consists of the
following key elements:
-- an approximately 55% reduction in the Company's full-
time domestic workforce (from approximately 310 to
140 employees);
-- reduction of corporate overhead through space
consolidation at the Company's Santa Monica
headquarters and Ontario, California distribution
center; and
-- a consolidation and restructuring of the Company's
European operations, including, where appropriate,
servicing the Company's European customers through
independent distributors rather than a direct
subsidiary sales force.
The Company anticipates that its fourth quarter operating
results will be adversely affected by between $28 million to $33
million of restructuring charges in connection with the
implementation of this plan. It is anticipated that
approximately $17 million to $20 million of the estimated
restructuring charge will be of a non-cash nature, primarily
related to asset write-downs and goodwill write-offs associated
with certain of the Company's European subsidiaries. The
domestic workforce reductions will occur in the first quarter of
fiscal 1997, and substantially all of the estimated cash costs
associated with the plan will be incurred over the next six to
twelve months. As previously disclosed, the Company anticipates
a loss for the fourth quarter and year ended November 30, 1996.
The Company also announced that William L. Benford,
President and Chief Operating Officer, will join Shamrock Capital
Advisors, Inc. in early February 1997. Effective immediately,
Bruce MacGregor will assume Mr. Benford's duties on an interim
basis. Mr. MacGregor previously served as Vice President-
Marketing at Avia and Co-Founder, President and Chief Executive
Officer of Deja Shoe, before joining the Company in August 1996
as Senior Vice President-Product Marketing. Prior to his
departure, Mr. Benford will assist in the transition and be
responsible for the implementation of certain key elements of the
Company's restructuring plan. Mr. Benford will continue to serve
on the Company's Board of Directors. In addition, the Company
announced that Victor J. Trippetti has been elevated to the
position of Senior Vice President and Chief Financial Officer.
Mr. Trippetti joined the Company in October 1989 and has served
as Vice President and Treasurer since July 1992.
Stanley P. Gold, Chairman of the Board, said, "We have
endeavored to streamline the organization, while maintaining the
Company's focus on its heritage as a premier designer and
marketer of women's and children's footwear. By consistently
reinforcing the ultimate importance of retailer and consumer
satisfaction in every element of our sales, marketing and product
design and development programs, we will seek to enhance brand
image, generate increased sales velocity with existing customers,
attract new customers and increase penetration into international
markets. It is only by taking bold measures to position the
Company to compete effectively in an intensely competitive and
consolidating branded athletic footwear industry that we can
continue to strive toward a return to profitability and enhanced
shareholder value."
The matters discussed in this press release include "forward
looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward looking statements
involve known and unknown risks, uncertainties, and other factors
which may cause the actual results, performance or achievements
of the Company to be materially different from any future
results, performance or achievements expressed or implied by such
forward looking statements. Such factors include, among others,
the Company's ability to reduce expenses, the effect of the
restructuring and reorganization on the Company's sales and
marketing efforts, changing market conditions, retailer and
consumer acceptance of new products and continuing product
demand, the impact of competitive products and pricing, changing
worldwide economic and business conditions, competition, brand
awareness, the existence or absence of adverse publicity;
availability, terms and deployment of capital, and the
availability of and ability to retain qualified personnel.
L.A. Gear designs, develops and markets a broad range of
quality athletic and lifestyle footwear for adults and children.
