Frederick's, Movie Star Deal Done
After more than a year, the merger between New York–based Movie Star Inc. and Los Angeles–based FOH Holdings Inc., the parent company of Frederick’s of Hollywood Inc., has been completed. The deal is a $20 million rights offering and a one-for-two reverse-stock split. As of Jan. 29, the combined company will be called Frederick’s of Hollywood Group Inc., and its stock will be traded on the American Stock Exchange under the symbol “FOH.” According to the newly merged company, the deal marries Frederick’s strong merchandising capabilities and multi-channel retail distribution with Movie Star’s well-developed sourcing capabilities. Peter Cole will lead the new company as executive chairman. Linda LoRe, president and chief executive officer of Frederick’s, and Melvyn Knigin, president and chief executive officer of Movie Star, will remain in their positions, each heading up their respective businesses. Thomas Rende, chief financial officer of Movie Star, is now chief financial officer of the combined company. According to LoRe, plans are underway to open or renovate 40 to 50 Frederick’s of Hollywood store locations within the next 36 months. In addition, the company plans to expand Frederick’s online and catalog businesses.
