View:
SCHEDULE 14A INFORMATION
REQUIRED IN PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant { }
Filed by a Party other than the Registrant { x }
Check the appropriate box:
{ } Preliminary Consent Statement
{ } Confidential, for Use of the Commission Only (as Permitted by Rule 14a-
6(e)(2))
{ } Definitive Consent Statement
{ x } Definitive Additional Materials
{ } Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.
14a-12
DESIGNS, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
JEWELCOR MANAGEMENT, INC.
(NAME OF PERSON(S) FILING DEFINITVE ADDITIONAL MATERIAL, IF OTHER THAN
REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
{ x } No Fee required.
{ } Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11:
FOR IMMEDIATE RELEASE
December 29, 1998
Wilkes-Barre, Pennsylvania
Contact: Jacqueline Quigley (717) 822-6277
Designs, Inc. may be back peddling on commitment to sell the company.
Shareholder activist Seymour Holtzman is very concerned by Designs,
Inc.'s press release issued yesterday which stated that while a sale of the
company is likely, "it is considering other options, including strategic
alliances." Holtzman contends that this statement reflects the current Board of
Directors' lack of commitment to sell the company and enhance shareholder value.
On December 11, 1998, a press release announced that Designs, Inc.
hired an investment banking firm to seek buyers for the company. In that press
release, the company's CFO, Carolyn Faulkner, further stated, "We believe a sale
will generate a price well in excess of the company's book value", which is
approximately $4.00 per share. This press release clearly shows that the
company's stated course of action is to sell the company.
Despite these previous statements, the company issued a press release
yesterday stating that the company is considering other options, including
strategic relationships. Holtzman stated, "This statement shows that the company
is now back-peddling from its prior commitment to sell the company and raises
concerns regarding its real intentions. The shareholders should be aware of the
fact that the company did not announce any intent to sell the company until
Jewelcor Management, Inc. (JMI), the owner of 9.9% of the company stock, filed a
consent statement seeking, among other things, to remove 5 of the 6 members of
the company's Board of Directors.
Holtzman questions, "Was the current management and Board of Directors
sincere in their statement that they are seeking to sell the company to enhance
shareholder value or are they more interested in making strategic alliances that
could benefit themselves?"
Holtzman stated, "I do not believe that the current management and
Board of Directors, who are responsible for the $71.4 million loss during the 21
month period ending October 31, 1998, have an interest in providing a "level
playing field" for all potential acquirors. With the exception of founder and
Chairman Stanley Berger, who owns 958,606 shares of the company's stock and
supports JMI's efforts, the current management and Board of Directors own only
approximately 1% of the outstanding stock of the company. Holtzman does not
believe that these individuals have the incentive to sell the company. "In my
opinion, the Board of Directors substantially ignored the shareholders until I
sent them a "wake-up call."
I am nervous that the company is now getting ready to enter into a
transaction that will not maximize shareholder value and instead will preserve
the status quo, continuing positions for management that was at the helm during
the company's historical loss record.
If the company enters into a "strategic alliance" or other
transaction, it could implement bust-up fees, management contracts and
significant shark repellents that could make it impossible for a new Board to
strike a better deal for the shareholders. The current Board of Directors could
also grant dilutive stock options to a potential acquiror to purchase up to
19.9%, or approximately 3.25 million shares of the company's stock. Management's
priorities may be what's best for them rather then what's best for the
shareholders. The shareholders should remember that the Board of Directors is
not obligated to disclose the terms of any transaction that it does not accept.
In such a case, the opportunity to appoint new directors who are
committed to enhancing stockholder value, and the enhancement of shareholder
value they believe they can create, may well be lost permanently. I do not want
the current management and Board of Directors to enter into a strategic
relationship that would be in their best interest but detrimental to the
stockholders.
The consent solicitation is a unique opportunity for us, said
Holtzman, takeover defenses could be put into place. I am speaking up for the
benefit of all stockholders. My motto is "silent investor, silent loser."