SCHEDULE 14A
(Rule 14a-101)
Information Required In Proxy Statement
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
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Check the appropriate box:
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DESIGNS, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
FOR IMMEDIATE RELEASE
For Information, Contact:
Carolyn R. Faulkner, Vice President,
Chief Financial Officer and Treasurer
Designs, Inc.
(781) 444-7222
Shareholder Information Line
1-888-DESI-333
DESIGNS, INC. SPECIAL COMMITTEE
SENDS LETTER TO HOLTZMAN
(Needham, MA, February 11, 1999) -- Designs, Inc. (NASDAQ:DESI) announced
that the Special Committee of its Board of Directors today delivered a
letter to dissident stockholder Seymour Holtzman addressing various
statements contained in a press release issued by Mr. Holtzman on Tuesday
which the Special Committee believes are grossly false and misleading.
Designs announced on Monday that it had prevailed in Mr. Holtzman's
solicitation of consents from the Company's stockholders to remove five of
the six members of the Company's Board of Directors and replace them with
his own nominees.
A representative of the Special Committee stated, "We are extremely
disappointed that Mr. Holtzman continues to engage in disruptive conduct
and to mislead our stockholders, especially after our efforts to settle our
differences with him. We had hoped that the termination of Holtzman's
consent solicitation would allow us to turn our attention back to our
principal task of finding a buyer for the Company. However, Mr. Holtzman's
insinuations in his recent press release that he is considering another
consent solicitation, even though our stockholders have clearly spoken on
this issue, are quite disconcerting. This ongoing disruptive activity by
Holtzman can only drain the Company of more and more resources and will
only serve as a distraction from the process of selling the Company."
A copy of the letter sent by the Special Committee to Mr.
Holtzman follows.
* * * * *
Special Committee of the Board of Directors
Designs, Inc.
66 B Street
Needham, Massachusetts 02494
February 11, 1999
BY FAX
Seymour Holtzman
Chairman, President and Chief Executive Officer
Jewelcor Management, Inc.
100 North Wilkes-Barre Blvd.
Wilkes-Barre, Pennsylvania 18702
Dear Mr. Holtzman:
We are writing to express our outrage and disbelief at the utter
nonsense contained in your press release on Tuesday. Despite the fact that
late last week we at Designs, Inc. had every reason to believe that we were
clearly prevailing in the consent solicitation initiated by you, we
continued our attempts to work with you in good faith towards a settlement
in which, among other things, we would have expanded our board of directors
by two members and appointed two of your nominees to fill the new seats.
An offer of this type is almost unheard of in the context of prevailing in
a consent solicitation, but the offer was nonetheless extended because of
Designs' genuine belief that ending our differences would facilitate the
process of seeking a buyer for Designs. You have responded by threatening
another consent solicitation while providing our stockholders and the
general public with a grossly false and misleading characterization of our
discussions last week.
Your press release was riddled with inaccuracies. Your claim
that you received support from holders of 43% of the outstanding shares is
inaccurate and inflated. And your assertion that you have "continually
initiated settlement discussions" with us is simply false. The truth is
that Designs has continually pursued settlement talks with you, including
sending you a term sheet which we were led to believe was acceptable to
you. Likewise, your statement that we have insisted that the terms of any
settlement agreement would prohibit you from commenting on any proposal to
sell the company is just not true.
Moreover, we reject your insinuation that we do not intend to
sell the Company at the highest available price. We remain fully committed
to that goal. Furthermore, your statement that we are unwilling to
"stipulate that management would not receive preferential treatment in any
sale transaction" is particularly outrageous since your attorneys have
never even requested such a representation. And in any event, as far as we
know, there is no plan on the part of any member of management to submit a
bid for the company. But even if such a bid were made, the management
bidder would be treated like any other bidder in the process.
Your conduct on Tuesday was shameless and appalling. How can you
expect us to trust you to engage in good faith negotiations with us? Or to
refrain from continually misleading our stockholders in an effort to
further your own interests? Your actions continue to serve no purpose
other than to force us to expend additional time and resources in
responding to and correcting your misleading public statements. You appear
to have no real interest in reaching an agreement with us or in allowing us
to tend to our principal task of selling the company at the highest
attainable price.
Sincerely,
SPECIAL COMMITTEE OF THE
BOARD OF DIRECTORS
By: /s/ Peter L. Thigpen
--------------------------------
Peter L. Thigpen
* * * * *
Forward-looking information requires the Company to make certain estimates
and assumptions regarding the Company's strategic direction and the effect
of such plans on the Company's financial results. The Company's actual
results and the implementation of its plans and operations may differ
materially from forward-looking statements made by the Company. The
Company encourages readers of forward-looking information concerning the
Company to refer to its prior filings with the Securities and Exchange
Commission that set forth certain risks and uncertainties that may have an
impact on future results and direction of the Company.
Designs, Inc. operates 113 outlet and specialty retail apparel stores in
two retail formats. These stores are located in outlet parks and enclosed
regional shopping malls throughout the eastern United States.
# # # # #
Designs, Inc. ("Designs") and certain other persons named below may be
deemed to be participants in the solicitation of consents (the
"Solicitation") in opposition to the consent solicitation by Seymour H.
Holtzman and certain companies controlled by him for the purpose of, among
other things, removing five of the six current members of the Board of
Directors of Designs and electing five new directors. The participants in
this Solicitation may include the following directors of Designs: Stanley
I. Berger, Joel H. Reichman, James G. Groninger, Bernard M. Manuel, Melvin
I. Shapiro and Peter L. Thigpen; the following executive officers of
Designs: Joel H. Reichman, Scott N. Semel and Carolyn R. Faulkner; and
the following officer of Designs: Anthony E. Hubbard, the Company's Vice
President and Deputy General Counsel (collectively, the "Designs
Participants"). As of the date of this communication, Stanley I. Berger,
Joel H. Reichman, Scott N. Semel, Carolyn R. Faulkner, James G. Groninger,
Melvin I. Shapiro, Bernard M. Manuel, Peter L. Thigpen and Anthony E.
Hubbard beneficially owned 1,199,003, 362,455, 280,537, 55,333, 57,383,
58,783, 69,210, 36,083, and 11,100 shares of Designs common stock,
respectively (including shares subject to stock options exercisable within
60 days).
Designs has retained Shields & Company, Inc. (the "Financial Advisor") to
act as its financial advisor in connection with the Solicitation for which
it may receive substantial fees, as well as reimbursement of reasonable
out-of-pocket expenses. In addition, Designs has agreed to indemnify the
Financial Advisor and certain persons related to it against certain
liabilities arising out of their engagement. The Financial Advisor is an
investment banking and advisory firm that provides a range of financial
services for institutional and individual clients. The Financial Advisor
does not admit that it or any of its directors, officers or employees is a
"participant" as defined in Schedule 14A promulgated under the Securities
Exchange Act of 1934, as amended, in the Solicitation, or that Schedule 14A
requires the disclosure of certain information concerning the Financial
Advisor. In connection with the Financial Advisor's role as financial
advisor to Designs, the Financial Advisor and the following investment
banking employees of the Financial Advisor may communicate in person, by
telephone or otherwise with a limited number of institutions, brokers or
other persons who are stockholders of Designs: Thomas J. Shields and
Jeffrey C. Bloomberg. None of the Financial Advisor, Thomas J. Shields or
Jeffrey C. Bloomberg beneficially own any of Designs' outstanding equity
securities.