Frederick's of Hollywood (AMEX: FOH) Exploring Strategic Alternatives for Wholesale Division

Frederick's of Hollywood Group Inc

Frederick's of Hollywood Group Inc. announced today they will be identifying strategic alternatives for its wholesale division, Movie Star, in order to increase the company's shareholder value. Investment banking firm Avalon Group, Ltd., based in New York, will be helping Fredrick's in identifying available strategic alternatives.

"Movie Star has a long history of supplying many well-known retailers with a wide variety of quality lingerie and undergarments. However, we have chosen to seek alternatives for the Movie Star wholesale business as we concentrate on building Frederick's of Hollywood into a global lifestyle brand. By selling the wholesale division, we can focus more of our resources on strengthening our retail division and expanding into new product categories through strategic domestic and international licensing agreements for the Frederick's of Hollywood brand," stated Thomas Lynch, the Company's Chairman and Chief Executive Officer.

"Considering Movie Star's history, broad product lines and extensive customer list of retailers, we are confident in our ability to identify an appropriate buyer for the business", said Lynch.

The Movie Star wholesale division designs, manufactures, sources, distributes and sells women's intimate apparel to mass merchandisers and department stores throughout the United States and Canada. The products of this line include pajamas, nightgowns, baby dolls, nightshirts, dusters, shifts, sundresses, rompers, short sets, beachwear, peignoir ensembles, robes, soft bras, panties, slips, half-slips, teddies, camisoles, and much more.

The company has not decided on a timetable for completing a transaction involving the Movie Star division and there are no assurances that the above described process will result in the completion of any transaction. Frederick's will not be disclosing any information concerning the development of this process unless and until the Board of Directors approves a specific transaction and the company enters into a binding agreement.

Shares of Frederick's are barely moving on way less than average volume today. Nonetheless, the stock is trading up $.03, or 3% at $1.03 a share.

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Frederick's of Hollywood (AMEX: FOH) Exploring Strategic Alternatives for Wholesale Division

By: Ronald Russo

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