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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
Date of Report (Date of earliest event reported)
JUNE 9, 1998
LITTLE SWITZERLAND, INC.
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(Exact name of registrant as specified in charter)
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DELAWARE 0-19369 66-0476514
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(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) identification no.)
161-B CROWN BAY CRUISE SHIP PORT, ST. THOMAS, U.S.V.I. 00802
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (809) 776-2010
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Item 5 - Other Events
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Little Switzerland, Inc. (the "Company") announced on June 9, 1998 that it
had terminated the Agreement and Plan of Merger, dated as of February 4, 1998,
with Destination Retail Holdings Corporation ("Destination") and certain of its
subsidiaries. A copy of the press release issued by the Company and
correspondence from the Company to Destination regarding such termination are
attached hereto and incorporated herein in their entirety.
Item 7 - Financial Statements, Pro Forma Financial Information and Exhibits
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(c) Exhibits
Exhibit 99.1 - Press Release of Little Switzerland, Inc., dated June 9,
1998.
Exhibit 99.2 - Correspondence from Little Switzerland, Inc. to Destination
Retail Holdings Corporation, dated June 9, 1998.
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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 thereunto duly authorized.
LITTLE SWITZERLAND, INC.
Date: June 9, 1998 By:/s/ John E. Toler, Jr.
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John E. Toler, Jr.
Chief Executive Officer
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EXHIBIT INDEX
Exhibit No. Description
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Exhibit 99.1 - Press Release of Little Switzerland, Inc., dated June 9,
1998.
Exhibit 99.2 - Correspondence from Little Switzerland, Inc. to Destination
Retail Holdings Corporation, dated June 9, 1998.
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Exhibit 99.1
PRESS RELEASE
CONTACTS:
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Jeffrey H. Cohen C. William Carey
Wasserstein Perella & Co., Inc. Little Switzerland, Inc.
(212) 969-2715 (617) 451-3312
Mary Ellen Goodall
Walter Denby
D.F. King & Co., Inc.
(212) 269-5550
FOR IMMEDIATE RELEASE
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LITTLE SWITZERLAND TERMINATES MERGER AGREEMENT
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CITES DRHC'S FAILURE TO RAISE FINANCING; SUES DRHC
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ST. THOMAS, U.S. VIRGIN ISLANDS, June 9, 1998 . . . Little Switzerland,
Inc. (NASDAQ:LSVI) today announced it has terminated its merger agreement with
Destination Retail Holdings Corporation because of Destination's inability to
raise the financing necessary to consummate the merger. Little Switzerland also
said that it will be commencing legal action against Destination, Stephen Crane
and certain related entities in the United States Federal Court for the District
of Delaware, seeking damages caused by the defendants' breach of the merger
agreement.
Since Little Switzerland's satisfaction of all conditions to the merger on
May 8, 1998, it has engaged in extensive and, in the end, unsuccessful
negotiations with Destination regarding Destination's inability to close the
merger. Destination has informed Little Switzerland that it is no longer in
active discussions with Donaldson, Lufkin & Jenrette, Inc. regarding financing
for the merger and that Donaldson, Lufkin & Jenrette will not, under any
circumstances, provide any equity financing in connection with the proposed
transaction. Moreover, Destination has no commitments in place to raise the
financing necessary to consummate the merger. The Board of Directors believes
that Little Switzerland has been irreparably harmed by Destination's inability
to honor its contractual commitments under the merger agreement and has
determined that the additional delay associated in continuing the process with
Destination would entail considerable risk and cause additional harm to Little
Switzerland's business. Despite Little Switzerland's numerous requests,
Destination has consistently refused to provide Little Switzerland with any type
of security or other consideration in exchange for an extension or to reimburse
Little Switzerland for its expenses in connection with proceeding with the
merger. In light of Destination's failure to raise the necessary financing and
the harm
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to Little Switzerland's business that would likely result from the lengthy
extension as requested by Destination, the Board of Directors of Little
Switzerland believes that termination of the merger agreement with Destination
is in the best interest of Little Switzerland and its stockholders.
Little Switzerland has indicated that it will continue to transact business
as an independent entity and will pursue its long-term business plan.
Commenting on the Company's future, Mr. C. William Carey, Chairman of Little
Switzerland, said: "Though we're disappointed to have to terminate, it has
become apparent to us that Destination doesn't have the financing and isn't
going to get it. Since announcing the merger agreement with Destination, we
have suffered the loss of certain key managers as well as adverse changes to
certain of our vendor relationships. We are now compelled to protect the
considerable assets of the Company we have today, including personnel and vendor
relationships. Notwithstanding the painful setback handed to us by Destination,
Little Switzerland remains a world class name in an important and growing
market. We intend to do everything possible to increase shareholder value,
beginning with implementing our business plan and growing our franchise."
Little Switzerland, Inc. is a leading specialty retailer of brand name
watches, jewelry, crystal, china, fragrances and accessories, operating 24
stores on ten Caribbean islands, and three stores in Alaska cruise ship
destinations. Little Switzerland's primary market consists of vacationing
tourists attracted by free-port pricing, duty-free allowances and a wide variety
of high quality merchandise.
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Exhibit 99.2
[Letterhead of Little Switzerland, Inc.]
June 9, 1998
BY FACSIMILE AND CERTIFIED MAIL
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Mr. Stephen G.E. Crane
Destination Retail Holdings Corporation
International Bazaar
P.O. Box F 40349
Freeport, Bahamas
Re: Little Switzerland, Inc./Destination Retail Holdings Corporation
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Dear. Mr. Crane:
Reference is hereby made to the Agreement and Plan of Merger, dated as of
February 4, 1998, by and among Little Switzerland, Inc. (the "Company"),
Destination Retail Holdings Corporation ("Parent"), LSI Acquisition Corp.
("Sub"), Young Caribbean Jewellery Company Limited, Alliance International
Holdings Limited and CEI Distributors Inc. (the "Merger Agreement").
Capitalized terms used but not defined herein shall have the meanings ascribed
thereto in the Merger Agreement.
As you were notified on May 8, 1998 by telecopy (which was confirmed) and
by certified mail (return receipt requested), all of the conditions set forth in
Article VI of the Merger Agreement were satisfied as of such date. The Merger
Agreement has not been consummated and neither Parent nor Sub has deposited the
Merger Consideration with the Paying Agent as provided in Section 2.02 of the
Merger Agreement since such date. Accordingly, the Company hereby terminates the
Merger Agreement in accordance with Section 7.01(e) thereof. The Company
reserves its ability to enforce all of its rights, remedies and privileges under
the Merger Agreement or otherwise to the fullest extent of the law, including,
without limitation, its right to pursue a claim for monetary damages or
equitable relief. In accordance with Section 7.02 of the Merger Agreement, this
termination does not relieve Parent, Sub or any of the Parent Related Entities
from liability for any breach of the Merger Agreement.
Sincerely,
/s/ John E. Toler, Jr.
John E. Toler, Jr.
cc: Charles H. Baker, Esq.
Kevin M. Dennis, Esq.
Joseph L. Johnson III, Esq.
