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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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): December 27, 2000
DAMARK INTERNATIONAL, INC.
(Exact name of Registrant as specified in its charter)
MINNESOTA 1-19902 41-1551116
(State of Incorporation) (Commission File Number) (I.R.S. Employer
Identification No.)
7101 Winnetka Avenue North
Minneapolis, Minnesota 55428
(Address of principal executive offices)
(Zip Code)
(612) 531-0066
(Registrant's telephone number, including area code)
EXHIBIT INDEX LOCATED AT PAGE 4
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ITEM 5. OTHER EVENTS.
On December 27, 2000, Damark International, Inc. announced that it will
actively pursue a sale of the operations of its ClickShip Direct subsidiary that
provides outsourcing of order fulfillment and customer care services to
retailers, direct marketers and manufacturers. Substantial negative changes in
capital market conditions - both equity and debt markets - prevented the company
from obtaining sufficient capital to permit a spin-off to shareholders on an
acceptable basis. The exit from the e-fulfillment business will be conducted
with an eye toward preserving capital for Provell, the company's membership
services business. While a sale of the ClickShip Direct subsidiary will be
explored, there can be no assurance as to the exact exit strategy. Failure to
sell the business would result in significant wind-down costs. The company
intends to manage an exit from e-fulfillment to a conclusion by the end of the
first quarter of 2001.
In a related development, the company also announced the sale of its
720,000 square foot fulfillment center for $22.0 million. ClickShip Direct has
agreed to a two-year lease back of 471,000 square feet, which is the space
currently utilized for its order fulfillment and customer care business. Damark
has guaranteed the obligations of ClickShip Direct under the lease and a
security deposit of $1.9 million was paid to the landlord. The proceeds of the
sale were $11.7 million after payment of the construction loan for the recently
completed expansion of the facility, of which $10 million was applied to the
company's revolving credit facility. The company estimates a pre-tax loss of
approximately $2.5 million on the sale of the fulfillment center.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
Exhibit No. Description of Exhibit
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99.1 Press Release dated December 27, 2000
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on it behalf by
the undersigned, thereunto duly authorized.
DAMARK INTERNATIONAL, INC.
Dated: December 28, 2000 By
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Mark A. Cohn
Chairman and Chief Executive Officer
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EXHIBIT INDEX
Exhibit No. Description of Exhibit
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99.1 Press Release dated December 27, 2000
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