SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the registrant [_]
Filed by a party other than the registrant [X]
Check the appropriate box:
[_] Preliminary proxy statement
[_] Confidential, for use of the Commission Only (as permitted by Rule
14a-6(e)(2)
[_] Definitive Proxy statement
[_] Definitive additional materials
[X] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
DESIGNS, INC.
(Name of Registrant as Specified in its Charter)
JEWELCOR MANAGEMENT, INC.
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
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[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
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September 10, 1999
Dear _______:
By now, you have no doubt received proxy material from both Designs, Inc.
(Designs) and Jewelcor Management, Inc. (JMI). As outlined in JMI's Proxy
Statement, JMI is soliciting proxies from Designs' shareholders to elect its
slate of directors and to terminate the Company's Poison Pill at the annual
meeting scheduled on October 4, 1999.
JMI, the owner of approximately 9.9% of Designs' common stock, is gravely
concerned that the Company may not survive without a change in the current
management and Board of Directors. Based on the deteriorating financial
condition of the Company, we believe a change in management is critical. Under
the leadership of Joel Reichman and the current Board, Designs has suffered
enormous operating losses of approximately $78 million in the last 2 1/2 years.
To make matters worse, comparable store sales have decreased for 3 1/2
consecutive years, and the trend continues.
Since Joel Reichman cannot defend his record (for which he is not even
apologetic), he and the current Board have resorted to scare tactics to, in our
opinion, divert the shareholders' attention away from the Company's dismal
financial performance while perpetuating their continued control. In that
regard, Designs has sent a letter to you from Levi Strauss containing certain
mischaracterizations of JMI and myself. Upon receipt of this letter, JMI
immediately withdrew my name as a candidate for the Board of Directors to
dispel any concern about JMI's involvement on the Board. Each of JMI's nominees
are independent businessmen, and none are affiliated with JMI.
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JMI believes that it is obvious what precipitated the letter from Levi
Strauss. In our view, Mr. Reichman considers the relationship with Levi Strauss
to be personal and that no one other than himself will be acceptable to
perpetuate the business relationship. This relationship is an asset of
paramount importance that belongs to Designs and its shareholders, and not Joel
Reichman. As noted by Levi Strauss and the Company, this business relationship
is important to both companies.
After JMI decided to nominate a slate of directors, it sought
recommendations from investment banking firms, a big five accounting firm, and
others interested in the success of the Company to identify potential
candidates. JMI's five distinguished nominees include three senior retail
executives who have no prior relationship with JMI, and who will constitute a
majority of the Board if elected. These senior retail executives are: John J.
Schultz, who served as Executive Vice President of Bloomingdale's Department
Store; Jeremiah P. Murphy, Jr., President of the Harvard Cooperative Society
and a former Vice President for Neiman Marcus; and Joseph Pennacchio, who was
the President of Jordan Marsh Department Stores. For your convenience, I am
enclosing information regarding the extensive qualifications of each of these
nominees, which is also contained in the Proxy Statement filed by JMI.
If the JMI Nominees are elected as directors of the Company, they intend to
immediately take the following steps in an attempt to enhance shareholder
value:
1. Seek to Reduce Overhead. The Nominees expect that possible areas of savings
could include the following:
-Substantially reduce the size of the Company's corporate office space,
together with a commensurate reduction in personnel and other office
overhead.
-Eliminate warehouse expenses by shipping merchandise directly to store
locations.
-Eliminate all company vehicles and institute a mileage reimbursement
program for business related travel.
-Control corporate expenses relating to travel, lodging, and attending
conferences, conventions and trade shows.
-Substantially reduce recurring legal, investment banking and other
professional and consulting fees.
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-Reduce the number of buyers since the Company has essentially only one
supplier of merchandise.
-Eliminate in-house legal staff.
-Maintain better inventory management.
2. Eliminate Poison Pill and Anti-Takeover Provisions.
3. Implement a Stock Repurchase program.
4. Review potential for sale of the Company.
Please refer to JMI's Proxy Statement for a more detailed discussion of
these issues.
JMI has also received suggestions and telephone calls from several
individuals concerning senior retail executives who have expressed an interest
in becoming the CEO of our Company. These potential candidates have impressive
credentials, and have successfully managed similar large retail chains of
factory outlet stores. If elected, JMI's independent nominees are committed to
finding the best qualified individuals to manage our Company.
Enclosed is JMI's proxy card. We urge you to vote for our nominees and to
remove the Poison Pill. Be mindful that the Poison Pill provision is precatory,
and does not obligate the Company to implement this proposal even if it
receives the requisite shareholder vote. Consequently, there is no assurance
that the current Board of Directors will take the action recommended by the
shareholders.
If you have any questions, please feel free to call me at (800) 880-6972,
ext. 23. Thank you.
Sincerely,
Seymour Holtzman
SH/jmq
Enclosures
[Enclosures Omitted]
