<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )*
Strouds, Inc.
-------------
(Name of Issuer)
Common Stock
-----------------------------
(Title of Class of Securities)
863451100
------------
(CUSIP Number)
Mr. J. Ezra Merkin With a copy to:
Gabriel Capital, L.P. Robert M. Friedman, Esq.
450 Park Avenue, Ste. 3201 Shereff, Friedman, Hoffman & Goodman, LLP
New York, New York 10022 919 Third Avenue
(212) 838-7200 New York, New York 10022
(212) 758-9500
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
September 15, 1997
---------------------------------------
(Date of Event which Requires Filing of
this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
statement because of Rule 13d-1(b) (3) or (4), check the following: [ ].
Note: One copy and an EDGAR version of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other parties to
whom copies are to be sent.
*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
disclosures provided in a prior cover page.
The information required on 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 ("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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SCHEDULE 13D
CUSIP No. 863451100 Page 2 of 11 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Gabriel Capital, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
NUMBER OF --------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 247,789
OWNED BY --------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON --------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
247,789
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
247,789
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.90%
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14 TYPE OF REPORTING PERSON*
PN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO
ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP No. 863451100 Page 3 of 11 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Ariel Fund Limited
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
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3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
CAYMAN ISLANDS
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7 SOLE VOTING POWER
NUMBER OF --------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 365,537
OWNED BY --------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON --------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
365,537
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
365,537
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.28%
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14 TYPE OF REPORTING PERSON*
CO
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO
ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP No. 863451100 Page 4 of 11 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Ariel Management Corp.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF --------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 365,537
OWNED BY --------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON --------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
365,537
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
365,537
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.28%
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO
ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP No. 863451100 Page 5 of 11 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
J. Ezra Merkin
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- -------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF --------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 613,326
OWNED BY --------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON --------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
613,326
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
613,326
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.19%
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO
ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
ITEM 1. SECURITY AND ISSUER
Securities acquired: Common Stock, $.0001 par value ("Common
Stock")
Issuer: Strouds, Inc.
780 South Nogales Street
City of Industry, California 91748
ITEM 2. IDENTITY AND BACKGROUND
(a), (b), (c) and (f) This Schedule 13D is being filed jointly by
Gabriel Capital L.P., a Delaware limited partnership ("Gabriel"), Ariel Fund
Limited, a Cayman Islands corporation ("Ariel Fund"), Ariel Management Corp., a
Delaware corporation ("Ariel"), and the Investment Advisor of Ariel Fund, and
J. Ezra Merkin ("Merkin"), the general partner of Gabriel. Merkin is also the
sole shareholder, sole director and president of Ariel. Gabriel, Ariel Fund,
Ariel and Merkin are hereinafter sometimes referred to collectively as the
"Reporting Persons." The business address of each of Gabriel, Ariel and Merkin
is 450 Park Avenue, New York, New York 10022 and the business address of Ariel
Fund is c/o Maples & Calder, P.O. Box 309, Grand Cayman, Cayman Islands,
British West Indies.
Gabriel and Ariel Fund are private investment funds. Ariel and Merkin
are private investment managers.
Merkin is a United States citizen.
See Item 5 for information regarding ownership of Common Stock.
(d) and (e). During the past five years, none of the Reporting Persons
has been convicted in any criminal proceeding (excluding traffic violations or
similar misdemeanors) or been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with respect to such
laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS
Gabriel purchased an aggregate of 247,789 shares of Common Stock at an
aggregate cost of $555,385.17 using its own funds. Ariel Fund purchased an
aggregate of 365,537 shares of Common Stock at an aggregate cost of $819,286.33
using its own funds. See Item 5 and Schedule I hereto.
Page 6 of 11
<PAGE>
ITEM 4. PURPOSE OF THE TRANSACTION
All of the shares of Common Stock reported herein were acquired for
investment purposes. Each of the Reporting Persons may acquire or dispose of
securities of the Issuer, including shares of Common Stock, directly or
indirectly, in open-market or privately negotiated transactions, depending upon
the evaluation of the performance and prospects of the Issuer by the Reporting
Persons, and upon other developments and circumstances, including, but not
limited to, general economic and business conditions and stock market
conditions.
Except for the foregoing, no Reporting Person has any present plans or
proposals which relate to or would result in any of the actions or events
described in paragraphs (a) through (j) of Item 4 of Schedule 13D. However, the
Reporting Persons retain their respective rights to modify their plans with
respect to the transactions described in this Item 4, to acquire or dispose of
securities of the Issuer and to formulate plans and proposals which could
result in the occurrence of any such events, subject to applicable laws and
regulations.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) and (b) Gabriel is the beneficial owner of 247,789 shares of Common
Stock, for a total beneficial ownership of 2.90% of the outstanding shares of
Common Stock.
Ariel Fund is the beneficial owner of 365,537 shares of Common Stock,
for a total beneficial ownership of 4.28% of the outstanding shares of Common
Stock.
Ariel, as Investment Advisor to Ariel Fund, has the power to vote and
to direct the voting of and the power to dispose and direct the disposition of
the 365,537 shares of Common Stock owned by Ariel Fund. Accordingly, Ariel may
be deemed to be the beneficial owner of 365,537 shares of Common Stock, or
4.28% of the outstanding shares of Common Stock.
As the General Partner of Gabriel, Merkin has the power to vote and to
direct the voting of and the power to dispose and direct the disposition of the
247,789 shares of Common Stock owned by Gabriel. In addition, as the sole
shareholder and president of Ariel, Merkin may be deemed to have the power to
vote and to direct the voting of and the power to dispose and direct the
disposition of the 365,537 shares of Common Stock owned by Ariel Fund.
Accordingly, Merkin may be deemed to be the beneficial owner of 613,326 shares
of Common Stock, or 7.19% of the outstanding shares of Common Stock.
The number of shares beneficially owned by each of the Reporting
Persons and the percentage of outstanding shares represented thereby, have been
computed in accordance with Rule 13d-3 under the Securities Exchange Act of
1934, as amended. The ownership of the Reporting Persons is based on 8,535,812
outstanding shares of Common Stock of the
Page 7 of 11
<PAGE>
Issuer as of July 11, 1997, as reported in the Issuer's Quarterly Report on
Form 10-QSB for the period ended May 31, 1997.
(c) Schedule I indicates the transactions effected by the Reporting
Persons in the Common Stock during the past 60 days. Except as indicated, all
such trades were purchases and were effected through the public markets.
(d) Not Applicable.
(e) Not Applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDING OR RELATIONS WITH RESPECT TO
SECURITIES OF THE ISSUER
Not Applicable.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit A. Agreement of Joint Filing.
Page 8 of 11
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
GABRIEL CAPITAL, L.P.
BY: /S/ J. EZRA MERKIN
-----------------------------------
Title: General Partner
ARIEL FUND LIMITED
BY: MEESPIERSON MANAGEMENT
(CAYMAN) LIMITED
BY: /S/ ROGER HANSON/JOHN LYSAGHT
-----------------------------------
Name: Roger Hanson/John Lysaght
Title: Directors
ARIEL MANAGEMENT CORP.
BY: /S/ J. EZRA MERKIN
-----------------------------------
Name: J. Ezra Merkin
Title: President
/S/ J. EZRA MERKIN
--------------------------------------
J. Ezra Merkin
Dated: September 23, 1997
Page 9 of 11
<PAGE>
SCHEDULE I
PURCHASE (SALE) OF SHARES OF COMMON STOCK WITHIN THE LAST 60 DAYS
<TABLE>
<CAPTION>
Number of Shares
Aggregate ------------------------------
Price Per Share Ariel Private
Date Share Amount Fund Gabriel Account
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
7/24/97 $2.1250 (7,204) -- -- (7,204)
7/24/97 $2.1250 7,204 4,294 2,910 --
7/25/97 $2.0000 5,000 2,980 2,020 --
7/28/97 $1.8750 4,000 2,384 1,616 --
7/29/97 $1.9375 3,200 1,907 1,293 --
8/01/97 $1.9375 8,500 5,066 3,434 --
8/01/97 $2.0625 (100,000) (59,600) (40,400) --
8/04/97 $1.9375 26,500 15,794 10,706 --
8/05/97 $1.9375 10,000 5,960 4,040 --
8/19/97 $1.8125 6,500 3,874 2,626 --
8/26/97 $1.8750 (100,000) (59,600) (40,400) --
8/27/97 $1.8750 40,000 23,840 16,160 --
8/27/97 $1.9583 15,000 8,940 6,060 --
8/28/97 $2.0000 (600) (358) (242) --
8/29/97 $2.0625 50,000 29,800 20,200 --
8/29/97 $2.0625 (5,000) (2,980) (2,020) --
8/29/97 $2.1250 50,000 29,800 20,200 --
9/03/97 $1.9375 9,000 5,364 3,636 --
9/15/97 $2.1250 15,000 8,940 6,060 --
9/16/97 $2.1250 175,000 104,300 70,700 --
9/22/97 $2.1250 5,000 2,980 2,020 --
9/22/97 $2.0000 2,000 1,192 808 --
Page 10 of 11
</TABLE>
<PAGE>
EXHIBIT A
AGREEMENT OF JOINT FILING
In accordance with Rule 13d-1(f) under the Securities
Exchange Act of 1934, as amended, the undersigned hereby agree to the joint
filing with all other Reporting Persons (as such term is defined in the
Schedule 13D referred to below) of a statement on Schedule 13D or any
amendments thereto, with respect to the Common Stock, $.0001 par value, of
Strouds, Inc., and that this Agreement be included as an Exhibit to such
filing.
This Agreement may be executed in any number of counterparts
each of which shall be deemed to be an original and all of which together shall
be deemed to constitute one and the same Agreement.
IN WITNESS WHEREOF, the undersigned hereby execute this
Agreement on the 23rd day of September, 1997.
GABRIEL CAPITAL, L.P.
BY: /S/ J. EZRA MERKIN
-------------------------------------
Title: General Partner
ARIEL FUND LIMITED
BY: MEESPIERSON MANAGEMENT
(CAYMAN) LIMITED
BY: /S/ ROGER HANSON/JOHN LYSAGHT
-------------------------------------
Name: Roger Hanson/John Lysaght
Title: Directors
ARIEL MANAGEMENT CORP.
BY: /S/ J. EZRA MERKIN
-------------------------------------
Name: J. Ezra Merkin
Title: President
/S/ J. EZRA MERKIN
----------------------------------------
J. Ezra Merkin
Page 11 of 11
