NEW YORK — Cygne Designs, a private label apparel manufacturer, has registered to offer 3.5 million common shares in a secondary offering, of which inside shareholders would sell 1.5 million.
In a filing with the Securities and Exchange Commission, the company said the proceeds from the 2 million shares it plans to sell will be used to repay a $6 million note, for working capital and for potential acquisitions. At the current market price, the 2 million shares would realize an estimated $38.7 million. Cygne’s stock, traded over the counter, closed Monday at 19 1/2, down 1 .
According to the filing, the selling shareholders include Fenn Wright & Manson, a private label sportswear manufacturer acquired by Cygne last month for $44 million in Cygne stock and $10,000 in cash. The sale of 510,597 shares will reduce FWM’s interest in Cygne to 10.7 percent. Irving Benson, Cygne president, plans to sell 404,986 shares, reducing his stake in Cygne to 12.5 percent.
The $6 million note was issued by FWM in connection with its acquisition by Cygne.
The company said it will have 12 million shares outstanding after the offering.
PaineWebber, Furman Selz and Smith Barney Shearson will underwrite the sale. Cygne said 2.8 million shares will be offered in the U.S. and 700,000 will be sold in international markets. Cygne’s initial public offering of 2.4 million shares was priced at $10 a share on July 30, 1993.
For the year ended Jan. 29, Cygne’s earnings — excluding Fenn Wright & Manson — nearly doubled to $6.1 million, or 92 cents, from $3.1 million, or 59 cents. Sales rose 76.7 percent to $220.2 million from $124.7 million. Combined, Cygne and Fenn Wright had sales of $371.5 million in 1993.