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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): September 25, 1996
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Cole National Group, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 33-66342 34-1744334
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
5915 Landerbrook Drive, Mayfield Heights, Ohio 44124
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (216) 449-4100
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Item 5. Other Events.
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Cole National Corporation issued a press release on September
25, 1996, a copy of which is filed as Exhibit 28.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
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(c) Exhibits.
28 Press Release dated September 25, 1996, from Cole
National Corporation.
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SIGNATURE
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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.
COLE NATIONAL GROUP, INC.
Date: September 25, 1996 By: /s/Wayne L. Mosley
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Vice President
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EXHIBIT INDEX
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Pagination by
Sequential Numbering
Exhibit Description of Exhibit System
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28 Press Release dated 5
September 25, 1996,
from the Company.
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Exhibit 28
PRESS RELEASE FOR IMMEDIATE RELEASE
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COLE NATIONAL CORPORATION Listed on New York Exchange
5915 Landerbrook Drive Symbol "CNJ"
Cleveland, Ohio 44124 Contact: Joseph Gaglioti
(216) 449-4100
COLE NATIONAL TO ACQUIRE PEARLE, INC.
Cleveland, Ohio, September 25, 1996 -- Cole National
Corporation (NYSE:CNJ) announced that it has agreed to purchase the
stock and certain assets of Pearle, Inc., an optical retailer, from The
Pillsbury Company, a subsidiary of Grand Metropolitan PLC. In a related
transaction, Cole National has agreed to sell Pearle's European
business, operated through a Dutch company known as Pearle B.V., to a
company organized by HAL Investments B.V., a Rotterdam-based investment
group, together with certain members of the Pearle B.V. management
team. Cole National will retain a minority interest in the European
operations. The acquisition, which is expected to be completed during
Cole National's fourth quarter, is subject to customary closing
conditions, including regulatory approvals and financing.
The Pearle system includes 692 retail locations in North
America, including 343 company-owned stores and 349 franchised
locations in 43 states, Canada, Puerto Rico and the U.S. Virgin
Islands, as well as 183 locations in The Netherlands and Belgium
operated by Pearle B.V. Cole National, through its subsidiary Cole
Vision Corporation, currently operates more than 1,000 optical retail
locations, primarily in host stores, under the names "Sears Optical,"
"Montgomery Ward Vision Center," "BJ's Optical" and "Target Optical."
The acquisition of Pearle would allow Cole National Corporation to
become a branded name optical retailer.
The Company expects to maintain the well-known Pearle
Vision(TM) name and to keep the Pearle retail system separate from the
existing Cole Vision operations. "The acquisition of Pearle adds a
well-known brand name to our optical business," said Jeffrey A. Cole,
Chairman and Chief Executive Officer of Cole National Corporation. "We
are delighted to have the opportunity to become associated with the
professionals of the Pearle system. I have the greatest respect for
Dr. Stanley Pearle, the founder of Pearle, Inc., and the quality eye
care that his name stands for. We also look forward to building a
constructive and mutually satisfying relationship with Pearle's
franchisees."
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Brian Smith, President and Chief Operating Officer of Cole
National Corporation, said that "The acquisition of Pearle represents a
significant repositioning of our company. It provides us access to a
more upscale, fashion conscious customer base, and dramatically expands
our optical operations beyond our traditional leased department format.
As a result of this acquisition, we believe that we will establish Cole
National as a leading provider of eyewear to all segments of the
optical retail market. We also hope the addition of the 692 Pearle
locations to our existing 1,500 location eye care network will make our
network more attractive as a managed vision care provider to HMOs and
other organizations."
Cole National will pay an aggregate of approximately $165
million for its acquisition of Pearle, Inc. and minority investment in
Pearle's European operations. The Company expects to finance the
acquisition through available cash resources and by the private
issuance of up to $150 million of subordinated debt by the Company's
wholly-owned subsidiary, Cole National Group, Inc. Such securities will
not be registered under the Securities Act of 1933 or any state
securities laws and accordingly cannot be offered or sold without
registration or applicable exemption from registration under federal
and applicable state securities laws.
The combination is expected to bring Cole National's annual
revenues to more than $900 million. "We expect the acquisition of
Pearle will be accretive to our earnings starting in our next fiscal
year," said Mr. Cole. "We believe that we can, by working with Pearle's
employees and franchisees, build the Pearle system into an excellent
complement to our existing operations."
"Grand Metropolitan has indicated for some time that Pearle
was not a good long-term fit with its business strategy. We've been
consistently building strength in our optical management team to be
prepared for significant growth and believe that we are well-positioned
to rebuild Pearle and its franchise organization," said Mr. Smith.
"This acquisition will allow us to better serve the growing number of
Americans who, as the population continues to age, will need vision
products.
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Cole National, headquartered in Cleveland, Ohio, also operates
more than 780 personalization gift stores in enclosed malls through its
Things Remembered, Inc. subsidiary and more than 500 personalization
gift centers in host store environments through its subsidiary Cole
Gift Centers, Inc.
The expectations, beliefs and other non-historical statements
contained in this press release are forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995.
Actual results may differ materially due to a variety of factors that
affect the Company, including the risks associated with acquiring
Pearle, such as uncertainties relating to its franchise operations, the
ability of the Company's management to achieve the expected operational
efficiencies from the combined companies and unforeseen difficulties
arising from the acquisition, the uncertainties associated with the
proposed financing, such as market conditions, interest rates and other
factors affecting the terms or availability of such financing, and
factors that can adversely affect the Company's operating results,
liquidity and financial condition such as the Company's ability to
select and stock merchandise attractive to customers, general economic
cycles affecting consumer spending, weather factors affecting retail
operations, its quality controls in optical manufacturing and
engraving, operating factors affecting customer satisfaction, the
Company's relationships with its host stores, the mix of goods sold,
pricing and other competitive factors, and the seasonality of the
Company's business.
