Trans World Entertainment Corporation Comments on Mark R. Higgins’ Preliminary Proxy Statement
May 28 2019 - 6:02PM
Trans World Entertainment Corporation (Nasdaq: TWMC) (the
“Company”) today issued the following statement regarding Mark R.
Higgins’ (“Mr. Higgins”) preliminary proxy statement:
The Company’s Board of Directors (the “Board”)
and management are deeply committed to enhancing value for all
shareholders and overseeing the Company’s strategy. Our Board is
comprised of six highly qualified directors who bring expansive
experience concerning retail operations, accounting and finance,
management and leadership, risk assessment and corporate
governance. Specifically, the Board has extensive knowledge of
the challenges faced by the Company in the turbulent physical
retail and physical media industries, and has been instrumental in
identifying opportunities to improve results. The Board
recognizes the importance of having the right mix of skills,
expertise and experience to effectively oversee the Company and
regularly reviews the Board’s composition and its refreshment to
ensure alignment with the interests of shareholders.
In the fye segment, over the past four years,
the Company has changed its merchandise point of view based on
unique, relevant, collaborative and exclusive merchandise.
These efforts have been well received by our customers and will
drive the continued reinvention of the fye brand throughout
2019. These changes have resulted in an increase in
contribution from our lifestyle categories to 55% of revenue in
2018 as compared to 25% in 2014. In the etailz segment,
during fiscal 2018, the Company implemented strategic initiatives,
operational efficiencies and other considerations directed towards
improving the segment’s performance, operations, and cash
flow. In the first quarter ended May 4, 2019, we saw the
benefits of the strategic initiatives, highlighted by improved
gross margins, lower SG&A expenses and improved supply chain
efficiency. As a result of these initiatives in etailz and
disciplined inventory management in the fye segment, we were able
to reduce cash used in operations by over $10 million for the first
quarter as compared to the first quarter of 2018. The Company
is committed to taking steps to improve operating results as
management diligently executes its strategy to deliver value for
shareholders.
The Company’s shareholders are not required to
take any action at this time. The Board will present its formal
recommendation regarding director nominations in the Company’s
proxy materials that will be filed with the SEC and
mailed—including a WHITE proxy card—to
shareholders eligible to vote at the 2019 Annual Meeting.
About Trans World Entertainment
Corporation
Trans World Entertainment is a leading
multi-channel retailer, blending a 40-year history of entertainment
retail experience with digital marketplace expertise. Our brands
seamlessly connect customers with the most comprehensive selection
of music, movies, and pop culture products on the channel of their
choice. For over 40 years, the Company has operated as a leading
specialty retailer of entertainment and pop culture merchandise
with stores in the United States and Puerto Rico, primarily under
the name fye, for your entertainment, and on the web at
www.fye.com and www.secondspin.com. In October 2016, the
Company acquired etailz, Inc., a leading digital marketplace expert
retailer, operating both domestically and internationally. etailz
uses a data driven approach to digital marketplace retailing
utilizing proprietary software and ecommerce insight coupled with a
direct customer relationship engagement to identify new
distributors and wholesalers, isolate emerging product trends, and
optimize price positioning and inventory purchase decisions. Trans
World Entertainment, which established itself as a public company
in 1986, is traded on the Nasdaq National Market under the symbol
“TWMC”.
Forward Looking Statements
This document includes forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements relate to analyses and other
information that are based on forecasts of future results and
estimates of amounts not yet determinable. These statements also
relate to the Company’s future prospects, developments and business
strategies. The statements contained in this document that are not
statements of historical fact may include forward-looking
statements that involve a number of risks and uncertainties.
We have used the words “anticipate”, “believe”, “could”,
“estimate”, “expect”, “intend”, “may”, “plan”, “predict”,
“project”, and similar terms and phrases, including references to
assumptions, in this document to identify forward-looking
statements. These forward-looking statements are made based on
management’s expectations and beliefs concerning future events and
are subject to uncertainties and factors relating to our operations
and business environment, all of which are difficult to predict and
many of which are beyond the Company’s control, that could cause
actual results to differ materially from those matters expressed in
or implied by these forward-looking statements. The following
factors are among those that may cause actual results to differ
materially from the Company’s forward-looking statements: new
product introductions; continued and accelerated declines in
compact disc (“CD”) and home video industry sales; highly
competitive nature of the retail entertainment business;
advancements in technology, including digital distribution and
media streaming; competitive pricing; current economic conditions
and changes in mall traffic; dependence on key employees, the
ability to hire new employees and pay competitive wages; the
Company’s level of debt and related restrictions and limitations;
future cash flows; availability of real estate; vendor terms;
interest rate fluctuations; access to third party digital
marketplaces; adverse publicity; product liability claims; changes
in laws and regulations; breach of data security; increase in
Amazon Marketplace fulfillment and storage fees and the other
matters set forth under Item 1A “Risk Factors,” Item 7
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations”, and other sections of the Company’s Annual
Report on Form 10-K filed on May 14, 2019. The reader should
keep in mind that any forward-looking statement made by us in this
document, or elsewhere, pertains only as of the date on which we
make it. New risks and uncertainties come up from time-to-time and
it’s impossible for the Company to predict these events or how they
may affect the Company. In light of these risks and uncertainties,
you should keep in mind that any forward-looking statements made in
this report or elsewhere might not occur.
Important Additional
Information
The Company will be filing a proxy statement and
accompanying WHITE proxy card with the SEC in connection with the
solicitation of proxies for its 2019 Annual
Meeting. The Company’s shareholders are strongly
encouraged to read the proxy statement (including any amendments or
supplements thereto) and the accompanying WHITE proxy card when
they become available because they will contain important
information. Shareholders will be able to obtain copies of
the Company’s 2019 proxy statement, any amendments or supplements
to the proxy statement, and other documents filed by the Company
with the SEC in connection with its 2019 Annual Meeting for no
charge at the SEC’s website at www.sec.gov. Copies will also
be available for no charge in the Investors section of the
Company’s website at www.twec.com.
The Company, its directors, executive officers
and certain employees may be deemed participants in the
solicitation of proxies from stockholders in connection with the
Company’s 2019 Annual Meeting. The Company’s 2019 proxy statement
will contain information regarding the direct and indirect
interest, by securities holdings or otherwise, of the Company’s
directors and executive officers in the Company’s securities when
it is filed with the SEC. If the holdings of the Company’s
securities change from the amounts provided in the proxy statement,
such changes will be set forth in SEC filings on Forms 3, 4 and 5,
which can be found in the Investors section of the Company’s
website at www.twec.com or through the SEC’s website
at www.sec.gov. Additional information about the Company’s
directors and executive officers is also available in the
Company’s proxy statement for its 2018 Annual Meeting
filed with the SEC on May 30, 2018.
Contact:Trans World
EntertainmentEdwin SapienzaChief Financial
Officer(518) 452-1242
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