By  on February 25, 2008

FOH Holdings, the parent of Frederick's of Hollywood, and Movie Star Inc. have completed their merger and retail expansion is a priority.

The union of the two intimate apparel powerhouses — Frederick's, a $220 million retail business, and Movie Star, a $51 million manufacturer — has been in the works since December 2006 and has created a $20 million rights offering. This allows the company's existing shareholders to buy a proportional number of additional securities at a given price, usually at a discount, within a fixed period.

Frederick's plans to expand its existing base of 137 stores nationwide by 50 units within the next 36 months, and invest in growing its catalogue and e-commerce businesses, said Linda LoRe, president and chief executive officer of Frederick's.

"The $20 million is earmarked for the growth of the brands," LoRe said. "The real focus of the company will be to grow the retail division and continue growth in direct channels, as well as enhancing our catalogue."

LoRe said an important part of Frederick's retail expansion will be to develop multiple store concepts that address individual markets. The flagship, on which a majority of the new stores will be based, will be designed to "capture a feeling of modern, sexy Hollywood glamour" that features Frederick's signature red, gold and leopard accents, she said.

"The new stores will represent a certain fashion iconism, a blend of Old Hollywood and new, and will include very modern fixtures and chandeliers," LoRe added. "All stores will range from 1,500 to 2,200 square feet."

Five Frederick's boutiques have launched in Las Vegas since 2007. The next premium locations in California will be Los Angeles, San Diego and Orange County, as well as spots in Florida.

Asked about the strategy to keep Frederick's on a solid foundation during the economic downturn, LoRe said, "Giving a lot of fashion and color and not just relying on basics. It's been so difficult for people that they turn to each other for more meaningful relationships. And I'm really glad, because they did so for Valentine's Day. Feb. 13 was the biggest [selling] day of the year for us."

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