As Filed with the Securities and Exchange Commission on April 5, 1999
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
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AND
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 9)*
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BRYLANE INC.
(NAME OF SUBJECT COMPANY)
BUTTONS ACQUISITION CORPORATION
PINAULT-PRINTEMPS-REDOUTE S.A.
(BIDDERS)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
117661 10 8
(CUSIP NUMBER OF CLASS OF SECURITIES)
SERGE WEINBERG SERGE WEINBERG
CHAIRMAN AND CHIEF EXECUTIVE OFFICER CHAIRMAN, CHIEF EXECUTIVE OFFICER
PINAULT-PRINTEMPS-REDOUTE S.A. AND PRESIDENT
18, PLACE HENRI BERGSON BUTTONS ACQUISITION CORPORATION
75381 PARIS CEDEX 08 C/O WACHTELL, LIPTON, ROSEN & KATZ
011 33 1 44 90 61 00 51 W. 52ND STREET
NEW YORK, NY 10019
(212) 403-1000
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSONS AUTHORIZED TO RECEIVE NOTICES
AND COMMUNICATIONS ON BEHALF OF BIDDERS)
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WITH A COPY TO:
DAVID A. KATZ, ESQ.
JOSHUA R. CAMMAKER, ESQ.
WACHTELL, LIPTON, ROSEN & KATZ
51 W. 52ND STREET
NEW YORK, NY 10019
(212) 403-1000
* This Statement also constitutes Amendment No. 9 to the Statement on Schedule
13D of Pinault-Printemps-Redoute S.A. with respect to the Common Stock, par
value $0.01 per share, of Brylane Inc. which may be deemed to be beneficially
owned by Pinault-Printemps-Redoute S.A.
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The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosure provided in a prior cover page. The information required in the
remainder of this cover page shall not be deemed to be "filed" for the purpose
of Section 18 of the Securities Exchange Act of 1934 (the "Act") or otherwise
subject to the liabilities of that section of the Act but shall be subject to
all other provisions of the Act (however, see the Notes).
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1. Name of Reporting Person
S.S. or I.R.S. Identification No. Of Person
Buttons Acquisition Corporation
Applied For
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2. Check the Appropriate Box if a Member of a Group* (a) [ ]
(b) [X]
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3. SEC Use Only
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4. Sources of Funds*
BK
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5. Check Box If Disclosure of Legal Proceedings is Required Pursuant to
Items 2(e) or 2(f) [ ]
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6. Citizenship or Place of Organization
Delaware
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7. Aggregate Amount Beneficially Owned by Each Reporting Person
0
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8. Check If the Aggregate Amount in Row (7) Excludes Certain Shares* [ ]
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9. Percent of Class Represented by Amount in Row (7)
0%
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10. Type of Reporting Person*
CO
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* See instructions before filling out.
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1. Name of Reporting Person
S.S. or I.R.S. Identification No. Of Person
Pinault-Printemps-Redoute S.A.
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2. Check the Appropriate Box if a Member of a Group* (a) [ ]
(b) [X]
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3. SEC Use Only
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4. Sources of Funds*
BK
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5. Check Box If Disclosure of Legal Proceedings is Required Pursuant to
Items 2(e) or 2(f) [ ]
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6. Citizenship or Place of Organization
France
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7. Aggregate Amount Beneficially Owned by Each Reporting Person
8,617,017 shares of common stock
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8. Check If the Aggregate Amount in Row (7) Excludes Certain Shares* [ ]
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9. Percent of Class Represented by Amount in Row (7)
49.9%
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10. Type of Reporting Person*
HC, CO
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* See instructions before filling out.
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This Amendment No. 1 to the Tender Offer Statement on Schedule 14D-1
filed on March 16, 1999 and Amendment No. 9 to the Statement on Schedule 13D
filed on April 13, 1998 (this "Amendment") is filed by Pinault-Printemps-Redoute
S.A., a societe anonyme organized under the laws of the Republic of France
("Parent"), and Buttons Acquisition Corporation, a Delaware corporation and an
indirect wholly owned subsidiary of Parent ("Purchaser"). This Amendment relates
to the offer by Purchaser to purchase all of the issued and outstanding shares
of common stock, par value $0.01 per share (the "Shares"), of Brylane Inc., a
Delaware corporation (the "Company"), not already beneficially owned by Parent
at a price of $24.50 per Share, net to the seller in cash (the "Offer Price"),
upon the terms and subject to the conditions set forth in the Offer to Purchase,
dated March 16, 1999 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which, together with the Offer to Purchase, each as amended or
supplemented from time to time, constitute the "Offer").
ITEM 10. ADDITIONAL INFORMATION.
On March 29, 1999, Parent received early termination of the applicable
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, with respect to the Offer and the Merger. Therefore, the condition
to the Offer relating to such waiting period has been satisfied.
The following amendments are set forth in this Item 10. However, the
cross-references to the Offer to Purchase contained throughout this Tender Offer
Statement, as originally filed, continue to apply, giving effect to the
amendments contained in this Item 10.
(a) Item 10(f) is hereby amended by deleting and replacing in its
entirety the fourth sentence of the fifth paragraph under "SPECIAL
FACTORS--Background of the Offer--History and Background of the Company and
Arrangements between the Company, Parent and Purchaser" on page 4 in the Offer
to Purchase with the following:
In connection with the April 1998 Stock Purchase, the Company and
Parent entered into a Governance Agreement, dated as of April 3, 1998
(the "Governance Agreement"), pursuant to which, among other things,
Parent's ability to acquire additional Shares and to take other actions
has been limited. However, the provisions of the Governance Agreement
did permit Parent (and its affiliates) to purchase a limited number of
additional Shares up to a maximum of approximately 47.5% of outstanding
Shares as set forth in the Governance Agreement (Parent's beneficial
ownership of approximately 49.9% is a result of the Company's Share
repurchases, which were approved by the independent directors). Also in
connection with the April 1998 Stock Purchase, the Company and Parent
entered into a Registration Rights Agreement, dated as of April 3, 1998
(the "Registration Rights Agreement"), pursuant to which the Company
has granted Parent certain registration rights to facilitate the resale
of the Shares beneficially owned by Parent under certain conditions.
(b) Item 10(f) is hereby amended by deleting and replacing in its
entirety the first sentence of the tenth paragraph under "SPECIAL
FACTORS--Background of the Offer--
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History and Background of the Company and Arrangements between the Company,
Parent and Purchaser" on page 4 in the Offer to Purchase with the following:
On December 2, 1998, a special meeting of the Company Board was held,
at which Mr. Weinberg stated that Parent desired to make a proposal to
acquire the outstanding Shares not beneficially owned by Parent.
Pursuant to the Governance Agreement, Mr. Weinberg requested that the
independent directors of the Company consent to Parent's making a
proposal. The special meeting was temporarily adjourned to permit the
independent directors to meet separately to consider Parent's request.
The independent directors concluded that there was no inherent reason
why a proposal to acquire the remaining Shares should not be
considered, that without knowing the terms of Parent's proposal the
independent directors could not determine whether the proposal was in
the best interests of the Stockholders, other than Parent, and that,
accordingly, the independent directors should waive the provisions of
the Governance Agreement to the extent necessary to permit Parent to
present its proposal to the Company Board. At that meeting, the
independent directors did not waive the provisions of the Governance
Agreement which prohibited Parent from conducting a tender offer. The
special meeting of the Company Board reconvened and Parent submitted a
proposal letter (the "Proposal Letter") to the Company Board.
(c) Item 10(f) is hereby amended by adding the following immediately
prior to the text of the Proposal Letter under "SPECIAL FACTORS--Background of
the Offer--History and Background of the Company and Arrangements between the
Company, Parent and Purchaser" on page 5 in the Offer to Purchase:
Parent is aware that the Commission takes the position that the safe
harbor for forward-looking statements does not apply to statements made
in a press release in connection with a tender offer.
(d) Item 10(f) is hereby amended by adding the following after the
fourth paragraph following the text of the Proposal Letter under "SPECIAL
FACTORS--Background of the Offer--History and Background of the Company and
Arrangements between the Company, Parent and Purchaser" on page 7 in the Offer
to Purchase:
The preliminary analysis of the Proposal that Bear Stearns presented at
the January 29, 1999 meeting of the Special Committee was based, in
part, on the Budget Projections (as defined below) provided to Bear
Stearns by the Company's management in early January 1999 after being
retained by the Special Committee. In the course of the meeting, Bear
Stearns indicated that it had not yet completed its due diligence but
was attempting to provide the Special Committee with its preliminary
findings based on the information available at that time.
The analysis of the Proposal was based, in part, upon the Budget
Projections, which were the only projections available at that time. As
described in "--Certain Financial Projections (Unaudited)," the Budget
Projections, at the time of their preparation, reflected management's
best judgment as to the most likely future financial results of the
Com-
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pany. The Budget Projections no longer represent the Company's
management's judgment of the most likely future financial results of
the Company. See "--Certain Financial Projections (Unaudited)" for a
description of the difference between the Budget Projections and the
Management Projections (as defined below).
Bear Stearns utilized several valuation methodologies in order to frame
a preliminary range of values for the Special Committee.
Comparable Public Company Analysis
Bear Stearns initially reviewed a broad universe of direct marketing
retailers. Applying a 11x-13x price earnings multiple to the 1999
Budget Projection of earnings per share of $2.29 implied a value range
of $25-$30 per share. Applying a slightly higher 12x-14x price earnings
multiple to the consensus estimate of four Wall Street equity research
analysts for 1999 of $1.66 implied a value range of $20-$23 per share.
Present Value of Hypothetical Stock Price
Bear Stearns conducted a theoretical analysis of the present value of
future share prices of the Company assuming the achievability of the
Budget Projection of earnings per share of $2.29 for 1999, $2.65 for
2000 and $3.08 for 2001. Bear Stearns assumed a range of required
annual return on equity of between 15%-20% and price earnings multiple
of 12x-14x. The range of values implied by this analysis was $26-$32
per share.
Comparable Acquisitions/Precedent Transaction Analysis
Using publicly available information, Bear Stearns applied 1998 mean
multiples for earnings per share and earnings before interest, taxes,
depreciation and amortization (EBITDA) from precedent transactions to
the preliminary 1998 Company earnings per share of $1.25 and EBITDA of
$89 million (taken from the Budget Projections). In addition, Bear
Stearns noted the acquisition of Arizona Mail Order by Fingerhut
Companies Inc. as being particularly recent and comparable at 6.7x
latest twelve months EBITDA. The range of values implied by this
analysis was $22-$27 per share.
Discounted Cash Flow Analysis
Bear Stearns performed a discounted cash flow analysis of the Company
for the fiscal years ended 1999 through 2003 based on the Budget
Projections and a sensitivity case reflecting less aggressive sales and
earnings recovery assumptions. Bear Stearns' analysis applied a range
of discount rates from 11-11.5% and exit multiples of 6.0-7.5x EBITDA
for 2003. The implied value range based on the Budget Projections was
$25-$35 per share. The sensitivity case, which assumed compounded
annual sales growth of 4.0% for 1998-2000 versus the Budget Projections
of 5.5% and operating income margin of 6.4% for 1999 and 6.8% average
for 2000-2003 versus the Budget Projections of 7.3% for 1999 and 7.9%
average for 2000-2003. The implied value range based on the sensitivity
case was $18-$26 per share.
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A copy of the written materials prepared by Bear Stearns for the
January 29, 1999 meeting of the Special Committee containing the
foregoing analyses is filed as Exhibit (b)(6) to the Schedule 13E-3.
(e) Item 10(f) is hereby amended by deleting and replacing in their
respective entireties the sixth, ninth and tenth bullet points of the first
paragraph under "SPECIAL FACTORS--Position of Parent and Purchaser Regarding
Fairness of the Offer and the Merger--Position of Parent and Purchaser" on page
9 in the Offer to Purchase with the following:
-- the historical and projected financial performance of the Company
and its financial results (including, without limitation, sales,
EBITDA, and net income), and Parent's views as to the likelihood of
achieving such results under various scenarios (See "--Certain
Financial Projections (Unaudited)");
-- the consideration to be paid to the Stockholders is entirely in
cash, which is more liquid, and the value of which is more easily
ascertainable and less subject to risk, than securities;
-- in the Merger, Stockholders will receive an amount in cash equal to
$24.50 or any greater amount per Share paid pursuant to the Offer
(the "Per Share Amount"), so that Stockholders that do not
participate in the Offer receive the same consideration as
Stockholders that do participate; and
(f) Item 10(f) is hereby amended by deleting and replacing in its
entirety the second paragraph under "SPECIAL FACTORS--Position of Parent and
Purchaser Regarding Fairness of the Offer and the Merger--Position of Parent and
Purchaser" on page 9 in the Offer to Purchase:
Parent and Purchaser did not find it practicable to assign, nor did
they assign, relative weights to the individual factors considered in
reaching their conclusion as to fairness. In light of the nature of the
Company's business as a financially sound and growing corporation,
Parent and Purchaser did not deem net book value, going concern value
or liquidation value to be relevant indicators of value of the Shares.
Moreover, Parent is not aware of any firm offers made by any
unaffiliated person during the preceding 18 months for the merger or
consolidation of the Company, the sale or transfer of all or any
substantial part of the assets of the Company or securities of the
Company which would enable the holder thereof to exercise control of
the Company. In their fairness determination, Parent and Purchaser
considered the fact that Parent, through its subsidiaries, acquired
Shares at prices significantly higher than $24.50 within the past year.
See "--Background of the Offer" and "--Interests of Certain Persons in
the Offer and the Merger." However, Parent and Purchaser believe that
the present and projected performance of the Company and the decline in
the trading prices of the Shares indicate that the Share prices paid by
Parent's subsidiaries significantly in excess of $24.50 are no longer
indicative of the current value of the Company.
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(g) Item 10(f) is hereby amended by adding the following sentence at
the end of the second paragraph under "SPECIAL FACTORS--Position of Parent and
Purchaser Regarding Fairness of the Offer and the Merger--J.P. Morgan Reports"
on page 9 in the Offer to Purchase:
The November 17 Report contained a review of the Company and Parent's
investment in the Company, including:
-- global market factors (turmoil in financial markets, collapse in
exports and a lowering of business confidence), direct mail and
apparel sector factors (catalog sales for Christmas season 20% below
expectations at the time of the November 17 Report, increasing
competition, softening of the apparel sector as more dollars shift
towards home furnishings) and Company-specific factors (a general
slowdown continuing accross all catalog divisions, continued
weakness in the Lerner catalogs due to merchandising miscues,
slowdown in core large size Lane Bryant catalog and sustained
pressure on Chadwick's performance, increased markdowns on fall
inventories and increased competition), all of which have negatively
impacted the Company's performance and prospects;
-- the recent Share price performance, including in relation to that of
the Company's peers and the broader market (indicating
underperformance), and factors relating to such Share price
performance (including lower analysts earnings per share estimates
and significant contraction in 12 month-forward earnings per share
and price earnings ratios, which are consistent with share price
erosion and multiple contraction in the direct mail/apparel sector);
-- significant reductions in analysts' earnings estimates for the
Company, to a Street median as of November 13, 1998 of $2.06 and
$2.55 earnings per share estimates for fiscal years ended January
1999 and January 2000, respectively; and
-- analysts' comments in the fall of 1998 emphasizing the weaknesses in
the Company's catalogs and the Company's below-expectations
performance.
The November 17 Report set forth the valuation implications of the
Company, reviewing J.P. Morgan's discounted cash flow analysis,
comparative trading analysis, comparative operating performance
analysis, and comparable trading multiples analysis, all of which were
based on publicly available information and which showed a range of $18
to $30 per Share. The November 17 Report also contained a review of
certain issues to consider, such as acquisition premia, in an
exploration of alternatives, including a possible acquisition. For more
detailed information regarding the foregoing, see the full text of the
November 17 Report, filed as Exhibit (b)(5) to the Schedule 13E-3.
(h) Item 10(f) is hereby amended by adding the following sentence after
the second sentence of the third paragraph under "SPECIAL FACTORS--Position of
Parent and Purchaser Regarding Fairness of the Offer and the Merger--J.P. Morgan
Reports" on page 9 in the Offer to Purchase:
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The February 22 Report reviewed the fiscal year 1998 below-expectations
operating performance for the Company. The February 22 Report then set
forth that the Company management's projection of an extremely rapid
recovery from the challenges that the Company faced in fiscal year
1998, including the projections that fiscal year 1999 operating profit
would grow 24% over (pre-reserve) fiscal year 1998 levels and that the
West Bridgewater division's operating profit would grow 61% over
(pre-reserve) fiscal year 1998 levels. For more detailed information
regarding such projections, "--Certain Financial Projections
(Unaudited)--Brylane Inc. Budget Projections."
In response to such projections, the February 22 Report reviewed
strategic concerns, operating risks and challenges associated with the
Company, including:
-- problems associated with the Company's Chadwick's division for the
second half of fiscal year 1998, including the facts that average
revenue per order on customer sales were off over 20% from the prior
year, that response rates on customer sales, reactivations and
prospects were off 9%, 22% and 17% over the prior year,
respectively, and operating income (before inventory adjustment) of
$(1.5) million compared to $32.5 million one year prior;
-- the short-term nature of the Company's contract with Sears, which
accounted for approximately 18.7% of second half of fiscal year 1998
operating profit and 11.5% of fiscal year 1998 operating profit;
-- recent order fulfillment problems, which are expected to take two
years to turn around;
-- the aggressive nature of the Budget Projections, including the facts
that fiscal year 1999 response rates were forecast to exceed the
record fiscal year 1997 results, and that gross margin improvement
is projected given an aggressive pricing policy;
-- expectations regarding future capital expenditures;
-- increasing competition in the Company's core markets;
-- expiration of certain key trademarks in October 2007 which will
necessitate higher advertising expenditures; and
-- chief executive officer succession planning.
The February 22 Report set forth the valuation implications of the
Company, reviewing J.P. Morgan's discounted cash flow analysis,
discounted cash flow sensitivity analysis, and comparable company
trading multiples analysis. The highest implied value per Share derived
from the foregoing analyses was $23.89 based on the most optimistic
case analyzed. For more detailed information regarding the foregoing,
see the full text of the February 22 Report, filed as Exhibit (b)(4) to
the Schedule 13E-3.
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(i) Item 10(f) is hereby amended by adding the following sentence at
the end of the fifth paragraph under "SPECIAL FACTORS--Position of Parent and
Purchaser Regarding Fairness of the Offer and the Merger--J.P. Morgan Reports"
on page 10 in the Offer to Purchase:
J.P. Morgan has consented to the inclusion of the descriptions of its
November 17 Report, February 22 Report and March 4 Report contained herein and
to the filing of such Reports as exhibits to the Schedule 13E-3.
(j) Item 10(f) is hereby amended by adding the following sentence after
the first sentence of the second paragraph under "SPECIAL
FACTORS--Recommendation of the Company Board; Fairness of the Offer and the
Merger--Recommendation of the Special Committee and the Company Board--Company
Board" on page 13 in the Offer to Purchase:
The Company Board and the Special Committee concluded that the Offer
Price adequately reflected the Company's historical results of
operations based on the Bear Stearns' precedent transaction analysis,
and that the Offer Price adequately reflected the Company's future
growth prospects based on the Bear Stearns' comparable public company
and discounted cash flow analyses, all of which are discussed under
"--Opinion of Bear Stearns." The Company Board also recognized that the
Offer Price was significantly lower than prices the Company paid to
repurchase Shares in the open market less than six months before the
Offer commenced, but concluded that in light of the lower than expected
Company earnings and the decline in the trading price of the Shares,
those prices were not relevant to a determination at this time of
whether the Offer Price was fair to the Stockholders other than Parent.
(k) Item 10(f) is hereby amended by moving the nineteenth paragraph
under "SPECIAL FACTORS--Recommendation of the Company Board; Fairness of the
Offer and the Merger--Opinion of Bear Stearns" on page 16 to follow the seventh
paragraph under "SPECIAL FACTORS--Recommendation of the Company Board; Fairness
of the Offer and the Merger--Opinion of Bear Stearns" on page 15 in the Offer to
Purchase.
(l) Item 10(f) is hereby amended by amending and restating the first
sentence of the eighth paragraph under "SPECIAL FACTORS--Recommendation of the
Company Board; Fairness of the Offer and the Merger--Opinion of Bear Stearns" on
page 15 in the Offer to Purchase as follows:
Set forth below is a brief summary of certain analyses performed by
Bear Stearns, contained in the Bear Stearns Report and reviewed with
the Special Committee on March 9, 1999 in connection with the
preparation of Bear Stearns' opinion.
(m) Item 10(f) is hereby amended by adding the following sentence after
the first sentence of the fourteenth paragraph under "SPECIAL
FACTORS--Recommendation of the Company Board; Fairness of the Offer and the
Merger--Opinion of Bear Stearns" on page 16 in the Offer to Purchase:
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Based on guidance from the Company's management, solely for purposes of
the discounted cash flow analysis, Bear Stearns assumed that net sales
would grow at a 7.5% annual rate in years 2002 and 2003, that the
EBITDA margin to sales would be 7.8% in 2002 and 8.2% in 2003, and that
working capital would remain at a constant percentage of sales as in
prior years. Bear Stearns also used the Company's management's estimate
for capital expenditures of $50 million and $20 million in 2002 and
2003, respectively. No other material assumptions regarding 2002 and
2003 were necessary for Bear Stearns' discounted cash flow analysis or
any other analyses undertaken by Bear Stearns.
(n) Item 10(f) is hereby amended by adding the following sentence as
the last paragraph under "SPECIAL FACTORS--Recommendation of the Company Board;
Fairness of the Offer and the Merger--Opinion of Bear Stearns" on page 17 in the
Offer to Purchase:
Bear Stearns has consented to the references to its opinion and the
foregoing description of the analyses it performed in this Offer to
Purchase.
(o) Item 10(f) is hereby amended by deleting and replacing in its
entirety the fourth paragraph under "SPECIAL FACTORS--Certain Financial
Projections (Unaudited)" on page 17 in the Offer to Purchase with the following:
Several factors were considered by the Company's management in
developing the Management Projections, including, without limitation:
-- substantially fewer orders from certain initial spring mailings
reflecting disappointing responses to several merchandising changes,
resulting in, among other things, an approximately 15% decline in
projected orders from the Company's Bridgewater catalog and an
approximately 13% decline in the projected orders from the Company's
combined Lerner weekend and spring sale catalogs;
-- changes in the industry indicating more intense competition from
existing and new entrants (including the recent acquisition of
Fingerhut Companies, Inc. by Federated Department Stores, Inc.)
-- changes in the industry resulting in more alternatives for the
customer, including the Internet as a distribution channel, at
competitive prices; and
-- loss of key management in the Chadwick's division, including the
resignation of Carol Meyrowitz, head merchandiser for Chadwick's,
and of the chief financial officer of Chadwick's and the vice
president of operations of Chadwick's.
(p) Item 10(f) is hereby amended by deleting the second to the last
sentence under "SPECIAL FACTORS--Cautionary Statement Concerning Forward-Looking
Statements" on page 20 in the Offer to Purchase.
(q) Item 10(f) is hereby amended by deleting and replacing in its
entirety the first paragraph under "SPECIAL FACTORS--Purpose and Structure of
the Offer; Reasons of Parent
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and Purchaser for the Offer and the Merger" on page 20 in the Offer to Purchase
with the following:
The purpose of the Offer, the Merger and the Merger Agreement is to
enable Parent to acquire complete control of the Company Board and the
entire equity interest in the Company. The possible alternatives
available to Parent to accomplish its purpose were restricted by the
standstill provisions of the Governance Agreement. See "--Interests of
Certain Persons in the Offer and the Merger--Governance Agreement."
Parent sought to achieve its goal of acquiring complete control of the
Company Board and the entire equity interest in the Company through the
means which it believed had the greatest likelihood of success in a
relatively short timeframe. Based on advice from its legal and
financial advisors, Parent believed that the Offer and Merger were the
means to achieve its goal with the greatest likelihood of success in a
relatively short timeframe. Therefore, Parent did not consider or
pursue any alternative means to accomplish its goal of acquiring the
entire equity interest of the Company and complete control of the
Company Board.
Upon consummation of the Merger, the Company will become a wholly owned
subsidiary of Parent. The Offer is being made pursuant to the Merger
Agreement. The two-step Offer and Merger structure has been used in
lieu of a one-step merger because Parent believes that a tender offer
may be consummated more quickly than a one-step merger transaction.
(r) Item 10(f) is hereby amended by adding the following sentence after
the third sentence of the third paragraph under "SPECIAL FACTORS--Purpose and
Structure of the Offer; Reasons of Parent and Purchaser for the Offer and the
Merger" on page 20 in the Offer to Purchase:
Parent has not yet taken any steps to implement the changes referenced
in the preceding sentence.
(s) Item 10(f) is hereby amended by adding the following paragraph
after the third paragraph under "SPECIAL FACTORS--Purpose and Structure of the
Offer; Reasons of Parent and Purchaser for the Offer and the Merger" on page 20
in the Offer to Purchase:
The Company Board and the Special Committee had no role in determining
the timing of Parent in making its proposal to acquire the outstanding
Shares that it does not already beneficially own or the Offer.
Recognizing that Parent's proposal to acquire the outstanding Shares
that it does not already beneficially own and the transactions
contemplated by the Offer could be amended or withdrawn by Parent at
any time in its discretion, the Company Board and the Special Committee
concluded that because they had determined that the Offer was fair to
and in the best interests of the Stockholders, other than Parent, the
prohibitions of the Governance Agreement should be waived rather than
risking withdrawal of Parent's proposal or the transactions
contemplated by the Offer.
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(t) Item 10(f) is hereby amended by deleting and replacing in its
entirety the fourth paragraph under "THE TENDER OFFER--Section 8. Certain
Information Concerning Parent and Purchaser" on page 44 of the Offer to Purchase
with the following:
On March 10, 1999, Parent announced its audited consolidated results
for the year ended December 31, 1998. As at such date, Parent had
consolidated revenues of 108,329 million French Francs (or
approximately $18,080 million), operating income of 5,977 million
French Francs (or approximately $998 million) and net income of 3,331
million French Francs (or approximately $556 million). The foregoing
approximate dollar equivalents are based on the exchange rate on March
10, 1999 of 5.9916 French Francs to a United States dollar, as reported
in The Wall Street Journal for such date. A copy of the Parent Results
Press Release is filed as Exhibit (a)(12) to the Schedule14D-1.
Parent's financial statements are prepared in accordance with French
generally accepted accounting principles ("French GAAP"). Parent does
not, nor is it otherwise required to, audit its financial statements in
accordance with GAAP. The following represents, in the opinion of
Parent, the significant differences between GAAP and French GAAP that
would affect the foregoing financial data of Parent. No attempt has
been made to identify future differences between GAAP and French GAAP
resulting from prescribed changes in accounting standards. It should
also be noted that regulatory bodies that promulgate French GAAP and
GAAP have significant on-going projects which could affect comparisons
between GAAP and French GAAP. Finally, the following does not identify
all of the differences between French GAAP and GAAP that may be
relevant.
Deferred taxation
Under French GAAP, deferred tax is calculated under the liability
method on temporary timing differences between taxable and accounting
earnings.
Net deferred tax balances are calculated on the basis of the tax
position of each company or group of companies participating in a group
tax election. Deferred tax assets are capitalized only if the company
or the fiscally consolidated entity has a reasonable degree of
certainty of recovering them during subsequent years; the assets
corresponding to carried forward tax losses are capitalized only when
they are virtually certain to be offset against future taxable profits.
Irrecoverable taxes relative to the payment of dividends of
consolidated entities are provisioned. No provision is made for
possible future distribution of reserves of either consolidated or
unconsolidated companies.
Where there is no intention of disposal, potential tax liabilities on
intangible assets recognized at the time of the acquisitions are not
recorded.
Under GAAP, deferred taxes are provided for all temporary differences
between the tax and commercial balance sheets. Not all these
differences that qualify for deferred tax calculation are permissible
under French GAAP. Under GAAP, deferred taxes are also calculated for
tax loss carryforwards and certain other adjustments using the
liability method
-12-
<PAGE>
and based on enacted tax rates. A valuation allowance
is established when it is more likely than not that deferred tax assets
will not be realized.
Consolidation Policies
Parent does not consolidate certain entities in which it owns a
majority interest, in particular its Financial Services Division is
accounted for under the equity method. Under GAAP, majority owned
entities (over 50% ownership) are generally required to be fully
consolidated, whereas non-majority owned entities are generally
required to be accounted for using either the cost or equity method
depending upon the amount of influence the applicable company is able
to exert over the owned entity.
Depreciation/Amortization Policies
As permitted under French GAAP, Parent has not amortized certain
intangible assets (trade names and market shares). Under GAAP these
intangible assets would be amortized over their expected useful lives,
not exceeding 40 years.
Lease Transactions
Parent has entered into certain lease transactions for land buildings
and other fixed assets. Pursuant to French GAAP Parent has disclosed
the nature of the transactions, the gross amount of the related
contracts, and the remaining amounts due under these contracts. Under
French GAAP the related obligations under these contracts are
considered period expenses and are not accrued for in the balance sheet
(i.e., the obligation is considered an operating lease obligation).
Under GAAP such leases would be considered capital leases and would
require that an asset and related debt liability be initially recorded
and subsequently adjusted to reflect the lease payments and use of the
asset.
(u) Item 10(f) is hereby amended by deleting and replacing in its
entirety the last sentence of the first paragraph before the bulleted list under
"THE TENDER OFFER--Section 12. Certain Conditions of the Offer" on page 46 in
the Offer to Purchase with the following:
Furthermore, notwithstanding any other provision of the Offer,
Purchaser may, subject to the terms of the Merger Agreement, amend or
terminate the Offer or postpone the acceptance for payment of or
payment for tendered Shares if at any time on or after March 10, 1999
(unless otherwise indicated below) and before the Expiration Date, any
of the following events shall occur:
(v) Item 10(f) is hereby amended by making the following revisions to
Schedule I to the Offer to Purchase:
(i) the second sentence of the Employment History of Philippe LaGayette
under Parent is amended and restated as follows: President of J.P.
Morgan et cie S.A. since 1998; (ii) the second sentence of the
Employment History of Francois Henrot under Parent is amended and
restated as follows: General Partner of Rothschild et Cie Banque since
March, 1997; (iii) the first sentence under Parent and the second
sentence under Purchaser of the Employment History of Serge Weinberg
are amended and restated as follows: Chairman of the Management Board
since July, 1995; (iv) the second sentence of
-13-
<PAGE>
the Employment History of Serge Weinberg under Redcats is amended and
restated as follows: Chairman of the Management Board of Parent since
July, 1995 (v) the Employment History of Francois Henri Pinault under
Parent is hereby amended and restated as follows: Member of Management
Board since 1993. Member of Artemis since 1992. Chairman of the Board
of FNAC since May, 1997; (vi) the Employment History of Francois Henri
Pinault under Artemis is hereby amended and restated as follows:
Director for more than 5 years. Chairman of the Board of FNAC since
May, 1997; (vii) the Employment History of Andre Guilbert under Parent
is hereby amended and restated as follows: Member of Management Board
since 1998; and (viii) Jean Loyrette no longer sits on the Board of
Parent.
-14-
<PAGE>
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS
Item 11 is hereby amended by adding the following exhibits:
EXHIBIT EXHIBIT NAME
NO.
(a)(16) Memorandum, dated March 29, 1999, to Participants in the 1996
Stock Option Plan and 1996 Performance Stock Option Plan.
(a)(17) Memorandum, dated March 29, 1999, to Participants in the Brylane,
L.P. Savings and Retirement Plan and Brylane Inc. Employee Stock
Purchase Plan.
(a)(18) Memorandum, dated March 29, 1999, to Participants in the Brylane
Inc. Stock Subscription Plan.
-15-
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, each of
the undersigned hereby certifies that the information set forth in this
statement is true, complete and correct.
April 5, 1999
PINAULT-PRINTEMPS-REDOUTE S.A.
By: /s/ SERGE WEINBERG
-------------------------------------
Name: Serge Weinberg
Title: Chairman and Chief Executive Officer
BUTTONS ACQUISITION CORPORATION
By: /s/ SERGE WEINBERG
-------------------------------------
Name: Serge Weinberg
Title: Chairman and Chief Executive Officer
-16-
<PAGE>
EXHIBIT INDEX
EXHIBIT EXHIBIT NAME
NO.
(a)(16) Memorandum, dated March 29, 1999, to Participants in the 1996
Stock Option Plan and 1996 Performance Stock Option Plan.
(a)(17) Memorandum, dated March 29, 1999, to Participants in the Brylane,
L.P. Savings and Retirement Plan and Brylane Inc. Employee Stock
Purchase Plan.
(a)(18) Memorandum, dated March 29, 1999, to Participants in the Brylane
Inc. Stock Subscription Plan.
Exhibit (a)(16)
M E M O R A N D U M
To: Participants in the 1996 Stock Option Plan and 1996 Performance Stock
Option Plan (the "Option Plans")
From: Robert A. Pulciani
Date: March 29, 1999
Re: PPR Transaction--Treatment of Stock Options
________________________________________________________________________________
BACKGROUND
TENDER OFFER. Pinault-Printemps-Redoute, S.A. ("PPR") currently
beneficially owns approximately 49.9% of Brylane's stock. A subsidiary of PPR
has made an offer to purchase all of the outstanding stock of Brylane that PPR
does not beneficially own now at the price of $24.50 per share (the "Tender
Offer"). The purpose of this memo is to give you some background information on
the Tender Offer and how it will affect the treatment of stock options you were
granted.
MERGER. PPR will acquire 100% of the stock of Brylane if Brylane is
merged into PPR (the "Merger") as is expected following the closing of the
Tender Offer. As a result of the Merger, all of the remaining stockholders of
Brylane who did not tender their shares in the Tender Offer will receive cash in
an amount equal to the price paid in the Tender Offer (the "Offer Price") at the
time of the Merger. The following situations are the possible outcomes that
could happen as a result of the Tender Offer:
o If PPR does not acquire at least 90% of the shares of Brylane stock
(including the shares it already beneficially owns), it can (1) elect
not to purchase any stock pursuant to the Tender Offer or (2) extend
the Tender Offer for certain periods past April 12 until 90% is
obtained (after which point the Merger would close as soon as
possible).
o If PPR acquires 90% of the shares of Brylane stock (including the
shares it already beneficially owns), it will purchase such shares, and
the Merger will close as soon as possible.
o If PPR acquires at least 75% (including the shares it already
beneficially owns), PPR may, but is not obligated to, close the Tender
Offer. PPR could also extend the Tender Offer for certain periods past
April 12 until 90% is obtained (after which point the
<PAGE>
Merger would close as soon as possible). If PPR elects to close the
Tender Offer upon the acquisition of at least 75% but less than 90%, it
will also cause the Merger to be consummated, but only after holding a
meeting of Brylane's stockholders. The Merger would still occur, but
not for several weeks (a minimum of 45 days after April 12).
TREATMENT OF OPTIONS
As a holder of options to purchase shares of common stock of Brylane
("Options") granted pursuant to the 1996 Stock Option Plan or the 1996
Performance Stock Option Plan (collectively, the "1996 Plans"), you of course
have an interest in the Tender Offer and the Merger. You were granted Options to
purchase a certain number of shares of Brylane common stock set forth in the
Stock Option Agreement between yourself and Brylane at the exercise price
indicated therein. Pursuant to the terms of the 1996 Plans, the 1996 Plans and
all Options granted thereunder would normally terminate upon the close of the
Merger. However, PPR and Brylane have agreed, at and contingent upon the
consummation of the Merger, to cash out all option holders who have outstanding
Options at the effective time of the Merger. Your Options are eligible to be
cashed out if they have an exercise price per share lower than the price paid in
the Tender Offer (the "Offer Price"), whether or not your Options have vested,
so long as you are an employee or director of the Company or any of its
subsidiaries at the effective time of the Merger.
If your Options have a per share exercise price greater than the Offer
Price, you will not receive a cash payment for those Options, and the Options
will terminate as described above. However, if any of your Options have a per
share exercise price less than the Offer Price, you will receive in cash an
amount equal to the excess of the Offer Price over the Option exercise price per
share (less any applicable withholding taxes), multiplied by the number of
shares represented by such options (the "Option Consideration"). Cash payment of
the Option Consideration will be made to you as soon as practicable after (and
contingent upon) consummation of the Merger, without interest, and your Options
will be canceled. ALL OF YOUR OPTIONS WITH A PER SHARE EXERCISE PRICE LESS THAN
THE OFFER PRICE, WHETHER VESTED OR UNVESTED, WILL BE CASHED OUT AS DETAILED IN
THIS MEMO WITHOUT ANY FURTHER ACTION REQUIRED ON YOUR PART, SUBJECT TO THE
CONDITIONS DESCRIBED HEREIN.
Of course, you remain free to exercise, through April 2, 1999, all or
any portion of your vested Options (including those that would vest on or before
the close of the Merger), and then to hold such shares received upon exercise,
tender them in the offer or, subject to securities law restrictions as well as
Brylane's insider trading and "blackout" policies, sell them in the open market.
Please note, however, that you will not be charged any stock brokerage
commissions if your options are cashed out as described in this memo or if you
decide to exercise your Options and then participate in the Tender Offer.
<PAGE>
Please complete the attached form acknowledging receipt of the above
information and fax it to Chuck Burtch at (317) 266-3954 on or before April 8,
1999.
Should you have any questions about the information included in this
memo, please call Chuck Burtch at (317) 266-3225.
Very truly yours,
----------------------------------
Robert A. Pulciani
Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer
<PAGE>
I, ___________________________ hereby acknowledge receipt of the information set
forth in the memo dated March 29, 1999, regarding the cash out of my Options
under the 1996 Stock Option Plan and/or the 1996 Performance Stock Option Plan
at the effective time (and contingent upon consummation) of the Merger.
Signature: ______________________________
Name (please print): ______________________________
Daytime Telephone Number:______________________________
Date: ______________________________
Exhibit (a)(17)
MEMORANDUM
TO: Participants in the Brylane, L.P. Savings and Retirement Plan ("SARP")
and Brylane Inc. Employee Stock Purchase Plan ("ESPP")
FROM: Robert A. Pulciani
DATE: March 29, 1999
RE: PPR Transaction--Treatment of SARP and ESPP
________________________________________________________________________________
BACKGROUND
TENDER OFFER. Pinault-Printemps-Redoute, S.A. ("PPR") currently
beneficially owns approximately 49.9% of Brylane's stock. A subsidiary of PPR
has made an offer to purchase all of the outstanding stock of Brylane that PPR
does not beneficially own now at the price of $24.50 per share (the "Tender
Offer"). The purpose of this memo is to give you some background information on
the Tender Offer and how it will affect any shares of Brylane stock that you own
in the SARP and/or the ESPP. Additionally, this memo tells you how you can
implement an election to sell or not to sell your stock to PPR in response to
the Tender Offer.
MERGER. PPR will acquire 100% of the stock of Brylane if Brylane is
merged into PPR (the "Merger") as is expected following the closing of the
Tender Offer. As a result of the Merger, all of the remaining stockholders of
Brylane who did not tender their shares in the Tender Offer will receive cash in
an amount equal to the price paid in the Tender Offer (the "Offer Price") at the
time of the Merger. The following situations are the possible outcomes that
could happen as a result of the Tender Offer:
o If PPR does not acquire at least 90% of the shares of Brylane stock
(including the shares it already beneficially owns), it can (1) elect
not to purchase any stock pursuant to the Tender Offer or (2) extend
the Tender Offer for certain periods past April 12 until 90% is
obtained (after which point the Merger would close as soon as
possible).
o If PPR acquires 90% of the shares of Brylane stock (including the
shares it already beneficially owns), it will purchase such shares, and
the Merger will close as soon as possible.
o If PPR acquires at least 75% (including the shares it already
beneficially owns), PPR may, but is not obligated to, close the Tender
Offer. PPR could also extend the Tender Offer for certain periods past
April 12 until 90% is obtained (after which point the Merger would
close as soon as possible). If PPR elects to close the Tender Offer
upon
<PAGE>
the acquisition of at least 75% but less than 90%, it will also cause
the Merger to be consummated, but only after holding a meeting of
Brylane's stockholders. The Merger would still occur, but not for
several weeks (a minimum of 45 days after April 12).
IF THE MERGER IS CONSUMMATED, YOUR SHARES WILL BE AUTOMATICALLY
CONVERTED INTO THE RIGHT TO RECEIVE THE OFFER PRICE, WHETHER OR NOT YOU TENDERED
YOUR SHARES TO PPR IN THE TENDER OFFER.
SAVINGS AND RETIREMENT PLAN
This provision applies to you only if you have elected to use some of
the money in your account in the SARP to purchase Brylane stock. In such a case,
you can decide whether or not you wish to tender the shares of Brylane stock
held in your account. When you "tender" your shares, that means that you are
agreeing to sell your shares to PPR for $24.50 per share.
You will shortly receive information from Merrill Lynch, which is the
trustee of the SARP. The information will provide more detail regarding the
Tender Offer and how you can tell Merrill Lynch whether or not you wish to
tender the shares held in your account. Please read these materials carefully.
If you have any questions on how to fill out any of the forms, you should call
Merrill Lynch at (800) 483-7283 or the Information Agent at (800) 322-2885. Your
choices are basically as follows:
o If you tell Merrill Lynch to tender your shares, they will be sold to
PPR in accordance with the terms of the Tender Offer;
o If you tell Merrill Lynch not to tender your shares, those shares will
remain in your account in the SARP; or
o If you don't tell Merrill Lynch whether or not to tender your shares,
those shares will be sold to PPR in accordance with the terms of the
Tender Offer.
If you wish to tender your shares, you must call Merrill Lynch at (800)
483-7283 by 3:30 p.m. (Eastern Standard Time) on Friday, April 9, 1999. If you
wish to withdraw any shares that you have previously instructed to be tendered,
you must call Merrill Lynch at (800) 483-7283 by 3:30 p.m. (Eastern Standard
Time) on Friday, April 9, 1999.
If the shares you tender are sold, the sales proceeds will be placed in
the Retirement Preservation Trust, which is essentially a money market fund that
is available under the SARP. You will not be charged any stock brokerage
commissions on the sale of your shares to PPR.
Please note that, if the Merger occurs, you will no longer be able to
purchase Brylane stock under the SARP.
-2-
<PAGE>
EMPLOYEE STOCK PURCHASE PLAN AND MERRILL LYNCH ACCOUNT
ESTABLISHED AT THE TIME OF THE INITIAL PUBLIC OFFERING
This provision applies to you only if you have purchased Brylane stock
under the ESPP, or a Merrill Lynch account was established for you as part of
Brylane's February 1997 initial public offering. Any shares of Brylane stock
that you purchased under the ESPP are held in your personal account at Merrill
Lynch. You can decide whether or not you wish to tender those shares. You will
shortly receive information from Merrill Lynch, which will provide more detail
regarding the Tender Offer and how you can tell Merrill Lynch whether or not you
wish to tender the shares held in your account. Please read these materials
carefully. If you have any questions on how to fill out any of the forms, you
should call Merrill Lynch at (800) 483-7283 or the Information Agent at (800)
322-2885. Your choices are basically as follows:
o If you tell Merrill Lynch to tender your shares, they will be sold to
PPR in accordance with the terms of the Tender Offer;
o If you tell Merrill Lynch not to tender your shares, those shares will
remain in your personal account at Merrill Lynch; or
o If you don't tell Merrill Lynch whether or not to tender your shares,
your shares will not be tendered (so that they will remain in your
personal account).
If you wish to tender your shares, you must call Merrill Lynch at (800)
637-3766 by 3:30 p.m. (Eastern Standard Time) on Friday, April 9, 1999. If you
wish to withdraw any shares that you have previously instructed to be tendered,
you must call Merrill Lynch at (800) 637-3766 by 3:30 p.m. (Eastern Standard
Time) on Friday, April 9, 1999.
If the shares you tender are sold, a check in the amount of the sales
proceeds will be mailed to your home address. You will not be charged any stock
brokerage commissions on the sale of your shares to PPR.
Please note that if the Merger occurs, the ESPP will be terminated.
PARTICIPATION IN BOTH PLANS
If you have purchased Brylane stock under both the SARP and the ESPP,
you will need to make two phone calls to Merrill Lynch, one for each account.
SALES UNRELATED TO THE TENDER OFFER
If you elect not to tender your shares to PPR, you will still be able
to sell the shares held in your accounts in the SARP and the ESPP at any time up
to the close of the Merger, subject to
-3-
<PAGE>
securities law restrictions and the Company's insider trading and "blackout"
policies, and you may have to pay stock brokerage commissions. You will not be
charged any stock brokerage commissions if you tender your shares to PPR in the
Tender Offer. IF THE MERGER OCCURS, YOUR SHARES WILL BE CONVERTED INTO THE RIGHT
TO RECEIVE THE OFFER PRICE, WHETHER OR NOT YOU TENDERED YOUR SHARES TO PPR IN
THE TENDER OFFER.
FOR FURTHER INFORMATION
If you have any questions, please contact the Human Resources
Department.
-4-
Exhibit (a)(18)
M E M O R A N D U M
To: Participants in the Brylane Inc. Stock Subscription Plan ("SSP")
From: Robert A. Pulciani
Date: March 29, 1999
Re: PPR Transaction--Treatment of Subscription Stock
________________________________________________________________________________
BACKGROUND
TENDER OFFER. Pinault-Printemps-Redoute, S.A. ("PPR") currently
beneficially owns approximately 49.9% of Brylane's stock. A subsidiary of PPR
has made an offer to purchase all of the outstanding stock of Brylane that PPR
does not beneficially own now at the price of $24.50 per share (the "Tender
Offer"). The purpose of this memo is to give you some background information on
the Tender Offer and how it will affect any subscription shares of Brylane stock
that you own. Additionally, this memo tells you how you can implement an
election to sell or not to sell your stock to PPR in response to the Tender
Offer.
MERGER. PPR will acquire 100% of the stock of Brylane if Brylane is
merged into PPR (the "Merger") as is expected following the closing of the
Tender Offer. As a result of the Merger, all of the remaining stockholders of
Brylane who did not tender their shares in the Tender Offer will receive cash in
an amount equal to the price paid in the Tender Offer (the "Offer Price") at the
time of the Merger. The following situations are the possible outcomes that
could happen as a result of the Tender Offer:
o If PPR does not acquire at least 90% of the shares of Brylane stock
(including the shares it already beneficially owns), it can (1) elect
not to purchase any stock pursuant to the Tender Offer or (2) extend
the Tender Offer for certain periods past April 12 until 90% is
obtained (after which point the Merger would close as soon as
possible).
o If PPR acquires 90% of the shares of Brylane stock (including the
shares it already beneficially owns), it will purchase such shares, and
the Merger will close as soon as possible.
o If PPR acquires at least 75% (including the shares it already
beneficially owns), PPR may, but is not obligated to, close the Tender
Offer. PPR could also extend the Tender Offer for certain periods past
April 12 until 90% is obtained (after which point the Merger would
close as soon as possible). If PPR elects to close the Tender Offer
upon the acquisition of at least 75% but less than 90%, it will also
cause the Merger to be consummated, but only after holding a meeting of
Brylane's stockholders. The Merger would still occur, but not for
several weeks (a minimum of 45 days after April 12).
<PAGE>
IF THE MERGER IS CONSUMMATED, YOUR SHARES WILL BE AUTOMATICALLY
CONVERTED INTO THE RIGHT TO RECEIVE THE OFFER PRICE, WHETHER OR NOT YOU TENDERED
YOUR SHARES TO PPR IN THE TENDER OFFER.
This memo is being provided to you because you participate in
the SPP, and gives you basic information on how to tender your shares of Brylane
stock if you desire to do so. There are two different mechanisms for tendering
your shares of subscription stock; which mechanism you'll use will be determined
by whether or not your shares are held in a brokerage account.
A. IF YOUR BRYLANE STOCK IS HELD IN A PERSONAL BROKERAGE ACCOUNT AT
MERRILL LYNCH OR AT ANOTHER BROKER: You can decide whether or not you wish to
tender the shares of Brylane stock held in your account. As a stockholder of
Brylane, your broker will send materials to you describing the transaction as
well as instructions as to how to instruct your broker as to whether or not you
wish to tender the shares in your personal account. Please read these materials
carefully; if you have any questions on how to fill out the forms, call your
broker or the Information Agent at (800) 322-2885. Your choices are as follows:
o If you tell your broker to tender your shares, they will be sold to PPR
in accordance with the Tender Offer;
o If you tell your broker not to tender your shares, those shares will
remain in your personal account with your broker; or
o If you don't tell your broker whether or not to tender your shares,
your shares will not be tendered (so that they will remain in your
personal account).
If your shares are sold because you tendered them, a check in the
amount of the sales proceeds will be mailed to you.
B. IF YOUR BRYLANE STOCK IS NOT HELD IN A BROKERAGE ACCOUNT: If you
would like to tender your shares, you are encouraged to deposit your shares in
your brokerage account as soon as possible, as it will significantly reduce the
amount of paperwork you will have to complete to tender your shares. If you do
deposit the shares with your broker, you should follow the instructions set
forth under Part A above. If you elect not to deposit your shares with your
broker, you will be mailed a package of documents that you will need to fill
out. You should carefully read the instructions and fill out the correct forms
if you decide to tender your shares; call the Information Agent at (800)
322-2885 if you have any questions on how to fill out the forms. If you deposit
your shares with a broker, the broker will take care of most of the paperwork.
You can decide whether or not you wish to tender your shares of Brylane stock.
Your choices are as follows:
o If you tender your shares by filling out and returning the proper forms
before the expiration date of the Tender Offer, and sending in your
stock certificate or certificates,
<PAGE>
they will be sold to PPR in accordance with the Tender Offer; or
o If you don't do anything, your shares will not be tendered.
If your shares are sold because you tendered them, a check in the
amount of the sales proceeds will be mailed to you.
ALL PARTICIPANTS PLEASE NOTE
Whether or not you have your stock held in a personal brokerage
account, you of course remain free to sell your subscription stock in the open
market at any time up to the time the Merger occurs, subject to securities law
restrictions as well as the Company's insider trading and "blackout" policies.
Please note, however, that you will not be charged any stock brokerage
commissions on the sale of your shares to PPR if you decide to tender your
shares in the Tender Offer. In addition, IF THE MERGER OCCURS, YOUR SHARES WILL
BE CONVERTED INTO THE RIGHT TO RECEIVE THE PRICE PAID IN THE TENDER OFFER,
WHETHER OR NOT YOU TENDERED YOUR SHARES TO PPR.
