| Fashion Mag Apparel, Inc. | |||
| Proposed Ticker: | FMAI | 3745 Overland Avenue | |
| Exchange: | NASDAQ-Small Cap Market | Los Angeles, CA 90034 | |
| Industry: | Manufacturing (SIC Code 2339) | (310) 836-8200 | |
| # of Employees: | 43 | ||
| Type of Shares: | Common Shares | Filing Date: | 12/3/97 | |
| U.S. Shares Filed: | 1,000,000 | Filing Price: | $5.00 | |
| Non-U.S. Shares Filed: | 0 | Offering Amount: | $5,000,000 | |
| Primary Shares: | 1,000,000 | Expenses: | - | |
| Secondary Shares: | 0 | Shares Out After: |
| Manager | Tier | Phone |
| Strasbourger Pearson Tulcin Wolff Inc. | Lead Manager | (212) 425-2320 |
| Issuer's Law Firm: | Stroock & Stroock & Lavan |
| Bank's Law Firm: | Sills Cummis Zuckerman Radin Tischman Epstein |
| Auditor: | Grobstein, Horwath & Company LLP |
| Registrar/Transfer Agent: | U. S. Stock Transfer Corporation |
Dollar amounts in U.S. millions except for per share data | |||||
| 9 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/96 | 9/30/97 | 9/30/96 | 9/30/97 | ||
| Revenue: | $3.07 | $2.45 | $2.30 | Assets: | $1.30 |
| Net Income: | $0.22 | $0.14 | $0.17 | Curr Assets: | $1.21 |
| EPS: | $0.15 | $0.10 | $0.11 | Liabilities: | $0.93 |
| Prior EPS: | -$0.09 | $0.04 | -$0.02 | Curr Liabilities: | $0.69 |
| Cash Flow/Oper: | $0.07 | -$0.02 | $0.07 | Equity: | $0.36 |
| Cash Flow/Fin: | $0.00 | -$0.01 | -$0.04 | Cash: | $0.01 |
| Cash Flow/Inv: | -$0.07 | -$0.01 | Working Cap: | $0.53 | |
| Business Description |
| The company designs, sources, markets and distributes women's activewear and swimwear in the United States and Canada under an exclusive license using the ELLE trademark and under private labeling arrangements. The Company also has produced licensed and private labeled swimwear and other apparel using the Hard Rock Cafe, Harley-Davidson, Everlast and B.U.M. Equipment trademarks. The Company believes its ELLE Products are uniquely positioned between high-end designer labels and mid-range labels. Industry sources indicate that an identifiable label is an essential element of popular activewear. The Company believes the ELLE Products have earned a reputation as a stylish and high quality, yet affordable brand. Activewear is a popular and rapidly growing segment of the apparel industry. The popularity of activewear is largely attributed to more active, casual lifestyles. Activewear combines casualwear and exercisewear that is designed for more informal settings, including casual social gathering, shopping and leisure time activities. ELLE Products are designed to be both sporty and elegant, offering a sophisticated and chic appearance. The Company's line of activewear consists of highly comfortable fashion-forward cotton knit shorts and tops, long and short tunics, coverups, leggings and fleece tops and bottoms. The Company's swimwear product line includes bathing suits, cover-ups, robes and tote bags that are designed to be fashionable and flattering. In the women's swimwear market, consumer's buying decisions tend to be based primarily on styling and appearance. |
| Competition |
| There is intense competition in the sectors of the apparel industry in which the Company participates. The Company competes with many other apparel companies, some of which are larger and have better established brand names and greater resources than the Company. In some cases, the Company also competes with private-label brands of its department store customers. The Company believes that in order to be successful in its industry, it must be able to evaluate and respond to changing consumer demand and taste and to remain competitive in the areas of style, quality and price while operating within the significant production and delivery constraints of the industry. Furthermore, the Company's traditional department store customers, which account for a substantial portion of the Company's business, encounter intense competition from so-called "off-price" and discount retailers, mass merchandisers and specialty stores. The Company believes that its ability to increase its present levels of sales will depend on such customers' ability to maintain their competitive position. |
| Business Plan |
| The Company's strategy is to expand the Company's operations and to become a leading brand name supplier of women's activewear and swimwear. Key elements of this strategy include (i) expanding products, styles and price ranges; (ii) implementing an advertising and marketing program; and (iii) expanding the distribution system for the Company's products through relationships with a broad network of retailers in the United States, Canada and (subject to expanding the territories in which the ELLE Products and future products are permitted to be sold) elsewhere. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used for repayment of outstanding indebtedness, payment of S Corporation dividends, accrued salaries to officers and to provide working capital to support the growth and expansion of the company's product lines. |
| Name of Shareholder | % Owned Before | % Owned After |
| Lawrence A. Dear | 50.00% | 30.00% |
| Lori Dorough Eisenberg | 25.00% | 15.00% |
| Jon Eisenberg | 25.00% | 15.00% |
| Officer Name | Title | Age |
| Morton Dear | Chairman of the Board of Directors nominee | 59 |
| Lawrence A. Dear | Chief Executive Officer, Chief Financial Officer, President and Director | 33 |
| Lori Dorough Eisenberg | Vice President of Design and Merchandising and Director | 35 |
| Jon Eisenberg | Vice President of Purchasing/National Sales and Director | 31 |
| Additional Underwriter Compensation |
| Warrant to purchase 100,000 shares/units at a nominal price. |