April 3, 1996
Securities & Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D. C. 20549
Re: Value Merchants, Inc.
Commission File No. 1-10973
Form 8-K dated March 15, 1996
Ladies and Gentlemen:
Enclosed is the Form 8-K dated March 15, 1996 including
exhibits.
If you have any questions concerning this filing, please
feel free to call me.
Thank you.
Sincerely,
Ronald E. Skelton
Vice President, Treasurer
RES/spy
enclosure
<PAGE>
FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) March
15, 1996
VALUE MERCHANTS, INC.
(Exact name of registrant as specified in its charter)
1-10973
Commission File Number
Wisconsin
(State of other jurisdiction of incorporation or
organization)
39-1103185
(I.R.S. Employer Identification No.)
710 North Plankinton Avenue
Milwaukee, Wisconsin 53203
(Address of principal executive officers, including zip
code)
(414) 274-2575
(Registrant's telephone number, including area code)
<PAGE>
Item 3. Bankruptcy or Receivership
On March 21, 1996, the Company and its subsidiary,
Everything's A Dollar, Inc. filed petitions for relief
under Chapter 11 of the Bankruptcy code. The petitions
were filed in the United States Bankruptcy Court for
the Eastern District of Wisconsin and were assigned
case number 96-22218 and 96-22219, respectively. Each
company will be a debtor-in-possession under the
Bankruptcy Code.
Item 5. Other Events
On March 15, 1996, the Company announced the
resignation of Steven J. Appel as Chairman of the
Board, President and Chief Executive Officer. The
resignation was mutually agreed upon by Mr. Appel and
the Board of Directors.
On March 21, 1996 the Company announced that William B.
Edwards, a member of the Board of Directors of Value
Merchants, Inc., assumed the responsibility of Chief
Operating Officer. Mr. Edwards' retail experience
includes serving as President and Chief Operating
Officer of Revco Drug Stores and President and Chief
Executive Officer of F & M Distributors.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1 Press release issued by the Company on March 15,
1996.
99.2 Press release issued by the Company on March 21,
1996.
99.3 Voluntary Petition of Value Merchants, Inc. under
Chapter 11 of the Bankruptcy Code.
99.4 Voluntary Petition of Everything's A Dollar, Inc.
under Chapter 11 of the Bankruptcy Code.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned hereunto
duly authorized.
VALUE MERCHANTS, INC.
Date: March 22, 1996
By: Ronald E. Skelton
Ronald E. Skelton, Vice President, Treasurer
<PAGE>
EXHIBIT INDEX
99.1 Press release issued by the Company on March 15,
1996.
99.2 Press release issued by the Company on March 21,
1996.
99.3 Voluntary Petition of Value Merchants, Inc. under
Chapter 11 of the Bankruptcy Code.
99.4 Voluntary Petition of Everything's A Dollar, Inc.
under Chapter 11 of the Bankruptcy Code.
<PAGE>
EXHIBIT 99.1
For further information contact:
Gary I. Kastel
(414) 274-2976
For Immediate Release:
Steven J. Appel Resigns as Chairman and CEO
Of Value Merchants, Inc.
(Milwaukee, WI...March 15, 1996) Value Merchants, Inc.
to day announced the resignation of Steven J. Appel as
Chairman of the Board, President and Chief Executive
Officer. The resignation was mutually agreed upon by
Mr. Appel and the Board of Directors.
The Board of Directors and Mr. Appel have agreed not to
comment further regarding the resignation.
<PAGE>
EXHIBIT 99.2
FOR IMMEDIATE RELEASE:
For further information contact:
Mr. Gary I. Kastel, Director of Communications
(414)274-2976
VALUE MERCHANTS, INC. FILES CHAPTER 11;
SEEKS PROTECTION TO MAINTAIN OPERATIONS AND REORGANIZE
DIRECTORS APPOINT NEW CHIEF OPERATING OFFICER
(MILWAUKEE, WI--March 21, 1996) - Value Merchants,
Inc. (OTC-VLMI) announced today that the Company and
its subsidiary, Everything's A Dollar, Inc., have filed
for protection under Chapter 11 of the United States
Code which governs reorganization cases.
The Company stated that it has been operating under
significant working capital constraints during the past
three years and has made every attempt to improve its
performance to continue to profitably operate as many
store locations as economically feasible since emerging
from its prior bankruptcy case.
The Company stated that it continues to have good
relationships with its secured lenders who have
demonstrated a continuing belief in the viability of
the business. The lenders have continued to finance
the business through recent financial distress which
resulted in defaults of the loan agreements. The
Company announced it has a tentative agreement with its
currently secured lenders, contingent on court
approval, for Debtor-In-Possession financing. When
approved, this financing will allow the Company to pay
its vendors on a current basis for purchases after the
bankruptcy filing and to sustain operations.
"Unfortunately for the retail segment of the economy,
1995 was a dismal year," the Company stated. "It is
disappointing that the Company did not achieve its
business plan in fiscal 1995. Our emerging from
bankruptcy in a difficult year for retailing made it
that much more difficult to achieve our expectations."
<PAGE>
The Company's December sales reflected the general weak
retail trend for the month with Everything's $1.00
comparable store sales down 10.4% from a year ago.
Christmas sales for most retailers were well below
expectations and December sales were perhaps the worst
they have been in about 10 years.
Virtually, every major chain, which generally anchor
Everything's $1.00 mall locations and attract traffic,
had holiday season sales below expectations despite the
high level of promotion and price reductions. The
Company was further limited due to the lack of working
capital availability.
Although Everything's A Dollar has been able to sustain
its retail operations over the past nine months, EAD
has consistently lost money at certain store locations
The companies can no longer continue to operate such
stores. Accordingly, after extensive analysis, the
Companies have determined that it is necessary to
downsize operations in order to preserve a core group
of stores as a viable business enterprise.
The Debtors propose to sell their assets in an orderly
fashion with a view to maximizing the value of those
assets for the benefit of the creditors. The sales are
contemplated to take place in two phases: (1)
Everything's A Dollar will immediately close and
conduct "store closing" sales at approximately 102 of
its stores which continue to operate at a substantial
loss; and, (2) Everything's A Dollar will attempt to
immediately market and sell the remaining company as a
going concern.
The companies believe that the orderly closing and sale
of the stores in these cases presents the best if not
the only opportunity to maximize value of their assets
for creditors and preserve the jobs of approximately
1,200 of the employees.
To give the company the leadership it requires during
its Chapter 11 case and to restore its viability and
profitability, the Board of Directors has announced
that William B. Edwards, a member of the Board of
Directors of Value Merchants, Inc., will assume the
responsibilities of chief operating officer effective
immediately. Mr. Edwards is a highly regarded retail
expert. His consulting firm W. B. E. Inc. has
specialized in strategic planning, development and
installation of business re-engineering, marketing,
distribution and other key facets of retailing and
distribution through retailers since 1990.
<PAGE>
Mr. Edwards' retail experience includes serving in a
number of leadership positions including President and
Chief Operating Officer of Revco Drug Stores and
President and Chief Executive Officer of F&M
Distributors.
