Contacts: Xxxxxxx Xxxxxxx / Xxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxxxx Xxxxxxx Xxxxxxx
(000) 000-0000
Xxxx X'Xxxxx / Xxxx Xxxxxxxxx
Financial Dynamics
(000) 000-0000
FOR IMMEDIATE RELEASE
XXXXXX XXXXXX, LTD. AND THE BARINGTON CAPITAL GROUP
REACH AGREEMENT -
COMPANY WILL ALLOCATE $25 MILLION TO
SHARE REPURCHASE AND/OR DIVIDENDS IN 2005
~ Company will add an Additional Independent Director to the Board ~
LONG ISLAND CITY, N.Y. - February 2, 2005 - Xxxxxx Xxxxxx, Ltd. (the
"Company") and a group of investors led by Barington Capital Group, L.P. (the
"Barington Group") that has reported beneficial ownership of approximately
7.7% of the Company's outstanding shares, announced today that they have
reached an agreement that will avoid a proxy contest at the Company's 2005
annual meeting of shareholders.
Under the terms of the Settlement Agreement, the current Board, in
its sole discretion, will determine who will be nominated for re-election to
the Board of Directors at the 2005 annual meeting. The Company will also add a
new independent Board member who will join the recently elected Xxxxxx X. Xxxx
as independent candidates for election at the 2005 annual meeting. The
Barington Group has agreed to vote for the election of each of the Board's
nominees.
The Settlement Agreement includes assurances that the Company will
dedicate additional capital resources to the enhancement of shareholder value
through share repurchases (including possibly by self-tender offer) and/or
dividends. For the fiscal year ended December 31, 2004 the Company repurchased
a total of 545,100 shares for an aggregate of $9.7 million. For 2005, the
Company has committed to spend $25 million, an increase of approximately 150%
over 2004. It has further committed to spend an additional $10 million in
2006. Final programs utilizing cash resources are subject to market conditions
and applicable legal requirements.
Under the Agreement the Board will meet with representatives of the
Barington Group on a quarterly basis to engage in an open dialogue with the
Board. The Company has also agreed to appoint one of its independent directors
as a lead director.
Finally, the Agreement provides that the Barington Group will abide
by certain standstill provisions for a two year period. The Barington Group
will support the Board through the 2006 annual meeting of shareholders,
subject to the terms of the Settlement Agreement, which will be incorporated
into a Report on Form 8-K to be filed by the Company this week.
Xxxxx Xxxxxx, Chairman and Chief Executive Officer of Xxxxxx Xxxxxx,
Ltd. and the Outside Directors of the Company stated, "We are pleased that
this matter has been resolved in a manner that serves the best interests of
our stockholders. It has always been our intent to enhance shareholder value
and this Agreement clearly evidences that intent."
"Our Board of Directors and the management team are very focused on
growing the business, improving profitability of various divisions, further
building and leveraging the Xxxxx Xxxxxx brand, and enhancing shareholder
value for the long-term. We collectively look forward to turning our full
attention to ensuring that Xxxxxx Xxxxxx, Ltd. remains one of the premier
fashion footwear companies in the marketplace."
Xxxxx X. Xxxxxxxxxxx, Chairman and Chief Executive Officer of
Barington Capital Group, stated, "This agreement demonstrates the commitment
of all parties to addressing the interests of all stockholders in a
significant and positive way. As we have previously stated, we are pleased the
Company added Xxx Xxxx to its Board last December so that the existing
management team can benefit from Xx. Xxxx'x retail and merchandising
expertise. We are also pleased with the agreement to appoint a lead director
and an additional independent director to the Board and that the Company will
dedicate $35 million over the next two years to stockholders through share
repurchases and/or dividends. We believe these actions will provide
significant value to shareholders. We are looking forward to engaging in a
constructive dialogue with the Board."
Xxxxxx Xxxxxx, Ltd. designs and markets fashion-forward footwear for
women, men and children. The shoes are sold through Xxxxx Xxxxxx retail
stores, department stores, apparel and footwear specialty stores, and on-line
at xxxx://xxx.xxxxxxxxxxx.xxx . The Company has several licenses for the Xxxxx
Xxxxxx and Stevies brands, including eyewear, hosiery, and belts, owns and
operates one retail store under its Xxxxxx xxxxx, and is the licensee for
l.e.i Footwear, Xxxxxx's Footwear and Unionbay Men's Footwear.
Barington Capital Group, L.P. is an investment management firm that
primarily invests in undervalued, small-capitalization companies. Barington
and its principals are experienced value-added investors who have taken active
roles in assisting management teams in creating or improving shareholder
value.
Statements in this press release that are not statements of historical or
current fact constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other unknown
factors that could cause the actual results of the Company to be materially
different from the historical results or from any future results expressed or
implied by such forward-looking statements. In addition to statements which
explicitly describe such risks and uncertainties readers are urged to consider
statements labeled with the terms "believes", "belief", "expects", "intends",
"anticipates" or "plans" to be uncertain and forward-looking. The forward
looking statements contained herein are also subject generally to other risks
and uncertainties that are described from time to time in the Company's
reports and registration statements filed with the Securities and Exchange
Commission.
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