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): October 21, 1999
TOPS APPLIANCE CITY, INC.
(Exact name of registrant as specified in its charter)
New Jersey 0-20498 22-3174554
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
45 Brunswick Avenue, Edison, New Jersey 08818
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code:(908) 248-2850
N/A
(Former name or former address, if changed since last report)
Item 1. Changes in Control of Registrant
Not Applicable
Item 2. Acquisition or Disposition of Assets
Not Applicable
Item 3. Bankruptcy or Receivership
Not Applicable
Item 4. Changes in Registrant's Certifying Accountant
Not Applicable
Item 5. Other Events
The Registrant has announced plans to convert its store
format. The Registrant has entered into an agreement to sell
three of its store leases to Best Buy and is negotiating new
leases to accommodate its new store format. A copy of the
Press Release describing such plans is attached hereto as
Exhibit A.
Item 6. Resignations of Registrant's Directors
Not Applicable
Item 7. Financial Statements and Exhibits
(a) Financial statements of business acquired.
Not Applicable
(b) Pro forma financial information
Not Applicable
(c) Exhibits
A. Press Release dated October 21, 1999.
Item 8. Change in Fiscal Year
Not Applicable
SIGNATURE
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.
TOPS APPLIANCE CITY, INC.
BY: /s/ Thomas L. Zambelli
---------------------------------
THOMAS L. ZAMBELLI
Executive Vice President
Dated: October 27, 1999
<PAGE>
EXHIBIT A
FOR IMMEDIATE RELEASE
FOR: TOPS APPLIANCE CITY, INC.
APPROVED BY: Thomas L. Zambelli
Executive Vice President and
Chief Financial Officer
Tops Appliance City, Inc.
(732) 248-2918
CONTACT: Cheryl Schneider/John Blackwell
Press: Michael McMullan/David Nugent
Morgen-Walke Associates, Inc.
(212) 850-5600
TOPS APPLIANCE CITY, INC. TO CONVERT TO NEW STORE FORMAT
--Agrees to Sell Three Store Leases to Best Buy for $10.5 Million
--Expects Significant Increases in Net Income and Operating Margins
Edison, NJ, October 21, 1999 - Tops Appliance City, Inc. (Nasdaq:
TOPS), a leading retailer of home appliances and consumer electronics, today
announced the Company will be converting to a unique new store format, in which
it will be selling higher-margin major appliances, housewares, kitchen cabinets
and countertops. This new store format is expected to result in significant
increases in net income and operating margins, beginning in the year 2000.
Tops Appliance City is planning to open two newly formatted stores by
year-end, and will continue to aggressively add additional stores and convert
some of its existing stores to the new format in the year 2000. The Company's
first new store is scheduled to open in November 1999 in Jersey City, New
Jersey. Each store will carry a broad array of high-end major appliances and
housewares as well as kitchen cabinetry and countertops, through its Kitchen
Place showrooms, located within the stores. Tops intends to operate
20,000-25,000 square-foot stores in its current marketplace, the New York
metropolitan area, and anticipates expanding further into the mid-Atlantic
region over the coming years. Currently, Tops locations average 50,000 square
feet, with approximately 15,000 square feet devoted to major appliances and
housewares. Tops' sales efforts will be supported by a new advertising and
direct mail campaign, which is expected to be launched next month.
In conjunction with its new business plans, Tops Appliance City:
<PAGE>
signed an agreement to sell three of its store leases to Best Buy
(NYSE:BBY) for $10.5 million, and has begun negotiating the sale of some of
its other existing store leases. The proceeds from the sale of Tops' leases
will be used to finance the opening of the Company's new stores.
currently in negotiation on five new leases and has begun to seek
additional new leases on other locations that better match its new store
profile.
begun to liquidate all of its consumer electronics offerings.
announced a planned reduction in staffing.
Tops Appliance City expects that the steps it has taken to convert its
stores to the new format will result in significant improvements to its
operations beginning in the year 2000. For the full year the Company
anticipates:
opening 10 - 15 new stores in the New York metropolitan area.
increasing gross margins by over 200 basis points.
reducing S G & A expenses by 50%.
Richard L. Jones, President and Chief Executive Officer of Tops Appliance
City commented, "With the arrival of Best Buy and other national competitors to
our region, the consumer electronics and retail computer marketplace will become
increasingly more competitive. By proactively shifting our focus to the home
appliance and housewares market we will be able to concentrate on growing what
has been the strongest and more profitable segment of our business. Currently,
major appliances, housewares and kitchen solutions account for approximately 50%
of our revenues and 60% of gross profits. The shift to our new format, combined
with our recently announced reduction in staff, will provide us with more growth
opportunities and greater shareholder value."
Mr. Jones continued, "Our new retail store format will create what we
believe will be a real category killer--the first home appliance and kitchen
superstore in the marketplace. While our emphasis will be on high-end, high
quality products, our selection will be the most complete one to be found under
one roof as we will also carry a wide range of quality, moderately priced
products providing retail and commercial customers with the right solution for
their particular needs. All of our salespeople will undergo a new, upgraded
training program and designers will be available to assist customers in creating
the kitchen of their dreams. This will be accomplished at our expanded Kitchen
Place departments within the stores at which interior designers and architects
will be able to create customized kitchens and demonstrate their design ideas
and capabilities."
Mr. Jones concluded, "Our exciting and unique new format will position Tops
Appliance City as the dominant home appliance and kitchen outfitter in the New
York metropolitan area and will create additional opportunities for expansion
into new markets. We're enthusiastic about the changes that are occurring, both
for our customers and for our shareholders."
Headquartered in Edison, New Jersey, Tops Appliance City, Inc. is a leading
retailer of home appliances and consumer electronics in New Jersey and New York,
serving a customer base within the Greater New York Metropolitan Area.
This release contains forward-looking statements about the Company, which
are subject to risk and uncertainties. Many factors may cause the Company's
results to differ from those set forth in any forward-looking statements.
Accordingly, there can be no assurances that any future results will be
achieved. The Company's SEC filings contain additional information on the
Company and the related risk factors that could cause actual results to differ
from management's expectations.
