UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): February 11, 2005
Hanover Direct, Inc.
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-12082 13-0853260
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(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification Number)
1500 Harbor Boulevard
Weehawken, New Jersey 07086
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(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code: (201) 863-7300
115 River Road, Building 10, Edgewater, NJ 07020
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240-14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Section 1 - Registrant's Business and Operations
Item 1.01 Entry into a Material Definitive Agreement
(a) On February 11, 2005, Hanover Direct, Inc. (the "Company") entered into a
Stock Purchase Agreement ("Agreement") to sell all of the stock of Gump's Corp.
and Gump's By Mail, Inc. ("Gump's") to Gump's Holdings, LLC (the "Purchaser")
for approximately $8.5 million. The closing is expected to be concluded during
March 2005 and is subject to customary closing conditions. Chelsey Direct, LLC,
which holds the Company's Series C Preferred Stock, has consented to the
application of the sales proceeds to reduce the Company's revolving credit
facility in lieu of the current redemption of a portion of Chelsey's Series C
Preferred Stock.
After the closing, the Company will continue as the guarantor of the lease
for Floors B through 4 of the Gump's premises located in San Francisco,
California. Under the Agreement, the Purchaser is required to use its
commercially reasonable efforts to secure the Company's release from the
guarantee within a year of the closing. If the Purchaser cannot secure the
Company's release within a year of the closing, an affiliate of the Purchaser
will either (i) transfer a percentage interest in its business so that the
Company will own, indirectly, 5% interest of the Purchaser's common stock, or
(ii) provide the Company with a $2.5 million stand-by letter of credit or other
form of compensation acceptable to the Company to reimburse it for any
liabilities it incurs under the guarantee until the Company is released from the
guarantee or the lease is terminated.
Keystone Internet Services, LLC, a wholly owned Company subsidiary, will
enter into a Direct Marketing Services Agreement with the Purchaser to provide a
full range of merchandise fulfillment services for the Gump's catalog and direct
marketing businesses for 18 months, subject to Keystone's option to extend the
term for an additional 18 months, subject to certain conditions.
Section 8 - Other Events
Item 8.01 Other Events
The Company entered into a 10 year extension of the lease for its
Weehawken, New Jersey premises and has relocated its executive offices to that
facility. It will consolidate all of its New Jersey operations into the
Weehawken facility when its Edgewater, New Jersey facility closes at the end of
the lease on May 31, 2005.
The Company is also relocating the International Male business from San
Diego to the Weehawken facility. The Company will record a one time charge of
approximately $900,000 in its fiscal year 2004 fourth quarter in connection with
the relocation of International Male.
Section 9 - Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
Exhibit 2.4 Stock Purchase Agreement dated as of February 11, 2005 by and
among Hanover Direct, Inc., The Company Store Group, LLC and
Gump's Holdings, LLC
Exhibit 99.1 Press Release, dated February 16, 2005
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HANOVER DIRECT, INC.
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(Registrant)
February 16, 2005 By: /s/ Charles E. Blue
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Name: Charles E. Blue
Title: Senior Vice President and
Chief Financial Officer