A discussion draft of the Online Sales Tax Simplification Act of 2016 is expected to be introduced in Congress soon.
Investment firm Harbinger Group and existing shareholders will take control of the company, which sells through stores, catalogs and the web. The women’s clothing retailer will become a privately owned company. Frederick’s also reported declining total sales in the first quarter of fiscal 2014, though direct sales held steady.
Women’s apparel and accessories retailer Frederick’s of Hollywood Group Inc. has agreed to be acquired by HGI Funding LLC, a subsidiary of holding company Harbinger Group Inc., and a group of current shareholders who own approximately 88.6% of the company’s common stock. The rest of the company’s shareholders will receive $0.27 per share when the deal is closed, a price that values the company at under $11 million.
Once the deal closes, Frederick’s of Hollywood will be privately held and no longer traded on the OTCQB marketplace.
CEO Thomas Lynch will remain in his role for three years after the deal closes; Frederick’s, No. 397 in Internet Retailer’s Top 500 Guide, has not commented on whether other executives will keep their jobs.
Frederick’s announced the sale along with its latest quarterly report. For the first quarter of fiscal 2014 which ended October 27, 2013, Frederick’s of Hollywood reports:
- Net sales are down 12.1% from the same period last year from $22.45 million to $19.73 million.
- Direct sales, which includes both e-commerce and catalog sales, increased slightly to $6.499 million from $6.493 million in Q1 2013.
- Total store sales are down 15.2%, from $15.15 million in Q1 2013 to $12.86 million.
- Comparable-store sales went down 11.7%.
- Frederick’s reduced its number of stores during fiscal year 2013 from 118 to 112.
Among Harbinger Group’s other holdings is Spectrum Brands, which markets products from such well-known names as Rayovac, Farberware and George Foreman.