Frederick’s of Hollywood to Launch Spin-off

Best known for its racy lingerie, Frederick’s of Hollywood is aiming for more-mainstream consumers. The cataloger/retailer is launching a 68-page book that will sell “fashion-forward ready-to-wear apparel,” according to Danielle Savin, vice president/general manager of Frederick’s direct division. Titled inFocus, the catalog is scheduled to mail on Jan. 12.

In addition to dresses, pants, and other women’s clothing, inFocus will sell some swimwear. Its lingerie offerings will be minimal, however.

The more modest product offerings of the new title makes it much easier to find available lists for prospecting, Savin says. “We had really good lists to work from,” she says. “In the past, some list owners would see the Frederick’s name and decline us for certain merchandise qualifications. But with this name no one had any objections.” About 40% of the mailing will go to rented names, with the rest going to Frederick’s customers.

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Frederick’s poised to emerge from bankruptcy

If the U.S. Bankruptcy Court approves its reorganization plan, apparel and lingerie cataloger Frederick’s of Hollywood could emerge from Chapter 11 bankruptcy protection as early as this fall. Frederick’s has a Sept. 4 hearing with the Court.

The Hollywood, CA-based Frederick’s, which has been operating under Chapter 11 since July 2000, announced its plan on Aug. 9 for its creditors to convert substantial debt to equity, and to provide a platform for the company to emerge from Chapter 11 following bankruptcy court approval, according to president Linda LoRe.

In addition to the plan’s goal of the conversion of significant debt to equity by the company’s lender group and general unsecured creditors, it also calls for a liquidity provision established by members of Frederick’s lender group, budgeted capital and marketing expenses, and the anticipated continuation of the company’s senior management team.

“Hopefully the court will accept the plan to go forward so we can emerge from bankruptcy, but you never know,” LoRe says. “We thought we had things lined up before, but then Sept. 11 happened.”

Under Chapter 11, Frederick’s has opened or remodeled more than 20 stores, built its Website, and introduced numerous new product lines.

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Frederick’s suitors put on hold

Bankrupt women’s apparel cataloger/retailer Frederick’s of Hollywood, which in October signed a letter of intent to be purchased, will likely not complete that or any other deal until the the third quarter, says spokesperson Seth Jacobson.

Frederick’s, which filed Chapter 11 in July 2000, signed the letter of intent to be purchased by two New York-based private equity groups, Cerberus Capital Management and TGV Partners. According to mergers-and-acquisitions publication “The Daily Deal,” the agreement called for the formation of a new entity to purchase Frederick’s assets for $15 million in cash. It would also get 10% of the company’s common stock as well as warrants to buy up to an additional 10%. Cerberus did not return phone calls.

But Frederick’s will wait until after the results from the just-ended holiday season and the upcoming Valentine’s Day have been tallied before moving forward, Jacobson says.

In other Frederick’s news, published reports say that the marketer sued accounting firm Andersen in the beginning of the year, accusing it of negligence. Frederick’s claims that Andersen improperly dropped the cataloger/retailer as an account without completing its 1999 audit. The lack of an audit, the suit contends, made the company unable to get necessary loans, forcing it to file for bankruptcy.

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