Movie Star, Inc. Announces Completion of Frederick ’s of Hollywood Merger and$20 Million Rights OfferingEffects 1 for 2 Reverse Stock Split · Movie Star changes name to Frederick’s of Hollywood Group Inc.
· Ticker symbol to change to FOH on January 29, 2008
· Management optimistic about growth potential
NEW YORK, NY and LOS ANGELES, CA – January 28, 2008 – Movie Star, Inc.
(AMEX: MSI) (“Movie Star”) and FOH Holdings, Inc. (“Frederick’s”), the parent
company of Frederick’s of Hollywood, Inc., announced today the completion of
their merger, a $20 million rights offering and a one-for-two reverse stock
split. Effective January 29, 2008, the
combined company will be called Frederick’s of Hollywood Group Inc. and its
common stock will be traded on a post-merger, post-split basis on the American
Stock Exchange under the new symbol “FOH.”
Frederick’s of Hollywood Group Inc. is well positioned to capitalize on
significant growth opportunities in the intimate apparel market. The companies bring together Frederick’s of
Hollywood’s strong merchandising capabilities and multi-channel retail
distribution, and Movie Star’s well-developed sourcing capabilities. With the combined company now generating over
$200 million in annual sales, the transaction is expected to drive top-line
growth, increase gross margins and improve operational efficiencies.
Peter Cole has become Executive Chairman and will lead the company’s post-merger operations integration and strategic planning initiatives. Both companies will retain their seasoned leadership teams, with Linda LoRe, President and CEO of Frederick’s, and Melvyn Knigin, President and CEO of Movie Star, continuing to lead their respective businesses. In addition, Thomas Rende, CFO of Movie Star, has become CFO of the combined company.
Linda LoRe, CEO of Frederick’s, stated, “We are pleased and excited to
have completed the merger of these two well established companies. The merger and the $20 million rights
offering are catalysts for an accelerated growth plan. This plan includes the opening or renovation
of between approximately 40 and 50 Frederick’s of Hollywood store locations
within the next 36 months. We will also
continue to focus on the expansion and enhancement of Frederick’s successful
online and catalog businesses.”
Melvyn Knigin, CEO of Movie Star, stated, “We are delighted to have
completed the merger and appreciate the hard work of everyone at Frederick’s
and Movie Star who has helped get us to where we are today. We also appreciate our shareholders’ trust
and patience and I am confident that we have created a company that will become
an even more prominent player in the intimate apparel business.”
About FOH
Holdings, Inc.
FREDERICK’S
OF HOLLYWOOD has been recognized as one of the world’s most well known brands,
with more than 135 specialty retail stores nationwide, a world-famous catalog
and online shop at www.fredericks.com. By keeping an eye toward modern
About Movie Star, Inc.
Movie
Star, Inc. designs, manufactures (through independent contractors), imports,
markets and distributes women’s intimate apparel, including sleepwear, robes,
leisurewear and daywear, to mass merchandisers, specialty and department
stores, discount retailers, national and regional chains and direct mail
catalog marketers throughout the United States.
Current collections include the Cinema Etoile premium line of intimate
apparel and the Movie Star line of apparel sold as private label programs.
Forward Looking Statement
Certain of the matters set forth in this press release
are forward-looking and involve a number of risks and uncertainties. Among the factors that could cause actual
results to differ materially are the following: competition; business
conditions and industry growth; rapidly changing consumer preferences and
trends; general economic conditions; large variations in sales volume with
significant customers; addition or loss of significant customers; continued
compliance with government regulations; loss of key personnel; labor practices;
management of growth, increases in costs of operations or inability to meet
efficiency or cost reduction objectives; the timing of orders and deliveries of
products; foreign government regulations and risks of doing business abroad;
failure to realize the merger’s anticipated synergies; and the other risks that
are described from time to time in Frederick’s of Hollywood Group Inc.’s SEC
reports.
CONTACT: INVESTOR
RELATIONS:
Thomas
Rende, CFO Stanley Berger
(212)
798-4700 (216)
464-6400