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DESIGNS, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
JEWELCOR MANAGEMENT, INC.
(NAME OF PERSON(S) FILING DEFINITVE ADDITIONAL MATERIAL, IF OTHER THAN
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FOR IMMEDIATE RELEASE
December 28, 1998
Wilkes-Barre, Pennsylvania
Press Contact: Jacqueline Quigley (717) 822-6277
Designs, Inc. Founder and Chairman backs Holtzman's move to oust 5 of 6
board members.
Seymour Holtzman, the President and CEO of Jewelcor Management, Inc.
(JMI), announced today that Stanley Berger, the founder and Chairman of Designs,
Inc. (Designs), has delivered his written consent voting in favor of JMI's
proposals. JMI, which owns 9.9% or 1,570,200 shares of common stock of Designs,
is seeking written consents from the stockholders of Designs to, among other
things, remove all of the current members of the Board of Directors of Designs,
Inc. with the exception of Stanley Berger. Mr. Berger, who developed the Levi
Strauss relationship 22 years ago and is the owner of 958,606 shares of the
company's stock, has indicated his willingness to continue as the Chairman of
the Board of Designs. Mr. Holtzman contends that Mr. Berger's continued
involvement with the company is a great benefit to the stockholders. "I am
gratified that Mr. Berger has provided his written consent. To me, this is a
clear indication that Mr. Berger believes that I am more motivated and suited to
enhance stockholder value than management and the current Board of Directors,
who, with the exception of Mr. Berger, only have a small ownership interest in
the company."
Mr. Holtzman is concerned by the substantial decline in the market
price of Designs' common stock, the decrease in comparable store sales and
Designs' substantial operating losses. During the 21 month period ending October
31, 1998, Designs reported operating losses of $71.4 million. Moreover, the
market value of Designs' stock declined approximately 90% during the period from
December 31, 1994 to November 25, 1998. Ironically, after JMI filed its Schedule
13D with the Securities and Exchange Commission on November 27, 1998, the market
price of the company's stock increased from $.75 per share to a closing of $2.00
per share on December 22, 1998. Mr. Holtzman stated, "these facts speak for
themselves. Even this price is only approximately 1/2 of book value based upon
the company's most recent financial statements. On December 11, 1998, the CFO of
Designs, Inc. stated that the company is worth well in excess of the current
book value. Since the stock is currently selling for approximately 1/2 of book
value, my opinion is that there are obviously a lot of investors who do not
believe that current management will sell the company."
Mr. Holtzman stated, "I have great concerns regarding the current
Board's involvement in negotiating a sale of the company. With the exception of
Mr. Berger, the current Board of Directors and management,
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Designs, Inc.
December 28, 1998
only own (excluding options) approximately 1% of the outstanding stock. With
that in mind, they could negotiate substantial incentive fees for management in
connection with the sale or merger, receive substantial sign up bonuses for
current management and obtain substantial breakup fees if the transaction is not
completed. Most importantly, management could also grant a dilutive option to a
potential acquiror to purchase in excess of 3 million shares of Designs stock. I
intend to work diligently for the benefit of all stockholders, and maintain a
"level playing field" for all potential purchasers. If JMI's proposals are
passed, the company's stockholders should be comforted by the fact that two of
the largest stockholders will be involved with the process of selling the
company."
Mr. Holtzman stated that, "Stockholders should be aware of the fact
that the Board of Directors is not obligated to disclose the price of any
transaction it decides not to accept, and there can be no assurance that the
Board of Directors would not seek to impose shark repellents or other
anti-takeover devices to hinder a transaction that it does not want to accept. I
am fearful that the stockholders will not have another opportunity to sell the
company, and I am seeking the written consents to accomplish our mutual goals."
As the founder of the company, Mr. Berger has an excellent longstanding
22 year relationship with Levi Strauss & Co. Mr. Holtzman said, "When Stanley
Berger retired four years ago, the company was highly profitable and financially
sound. Since that time, the company has reported substantial cumulative
operating losses. In my opinion, present management is not sufficiently
motivated to sell the company. Why should they vote themselves out of a job? The
present management of the company has done such a dismal job, that, in my view,
they are not the best choice to be involved in the sale of the company."
Seymour Holtzman is a highly regarded, experienced businessman and has
a reputation that is well known in the banking community for exerting pressure
on under-performing banks to sell to larger financial institutions. He has been
applauded numerous times by institutional and individual stockholders for his
efforts as a shareholder activist.
Holtzman believes that in spite of current management's poor
performance, Designs, Inc. is an excellent company, and if sold, will no doubt
be a great fit for a desirable strategic partner.