NEW YORK--The number of potential suitors for a hefty stake in Frederick's of Hollywood is being narrowed down. As reported, the intimate apparel retailer and the trusts set up by its founders hired investment firm Janney Montgomery Scott Inc. in June as a financial adviser to explore ways to enhance shareholder value, including a possible sale. In addition to shares owned by the trusts, the program could include the sale of all shares or assets, a merger or a joint venture. The trusts own 50.2 percent of the firm's outstanding shares. So far, more than a dozen large-size investment firms and companies--out of 40 parties that have expressed interest--have been qualified by Janney Montgomery Scott to make a bid, sources said. A spokesman for Janney Montgomery Scott said: "It's a situation where we've been talking to a number of people." He would not elaborate. Meanwhile, sources noted that the founders' trusts are being forced to sell their shares to pay off an estimated $11 million to $12 million in federal taxes. The late Frederick Mellinger founded the specialty chain in New York in 1946 as a mail order operation specializing in lingerie in the color black, which was considered risquA at that time. He moved his business to Los Angeles in 1947 and opened the first Frederick's store. Mellinger died in June 1990, and his wife, Harriet, died in April 1993. Sources say the trusts have since been forced to pay annual interest of $700,000 against the liability owed, but the IRS wants to have its money in full next spring. "The government allowed three years of interest payments. Now, they want it all," a source said. Officials at the Frederick's offices in Los Angeles could not be reached.
Hermès is launching a Laundromat pop-up shop in NYC - dubbed Hermèsmatic - where customers can bring their old scarves to be dip-dyed by an expert. Get all the details on WWD.com. #wwdnews (📷: @donstahl)