Kidpik Corp. (NASDAQ: PIK) (“Kidpik”), a kids’ online clothing
subscription-based e-commerce company, and Nina Footwear Corp., a
private company operating a brand specializing in women’s and kids’
dress shoes and accessories for special occasions (“Nina Footwear”), today announced that they have
entered into a definitive merger agreement.
The Board of Directors of both companies have approved the
all-stock transaction. The combined company will operate as Nina
Holdings Corp. In connection with the merger, Nina Footwear
stockholders will be issued shares of common stock of Kidpik such
that upon closing thereof, Nina Footwear’s stockholders will own
80% of Kidpik’s outstanding common stock.
Kidpik is controlled by Mr. Ezra Dabah, the Chief Executive
Officer, Chairman, and majority stockholder (67% beneficial owner)
of Kidpik, who is also the Chief Executive Officer of Nina
Footwear. Mr. Dabah and his children own approximately 79.3% of
Nina Footwear, and Mr. Dabah and his extended family own 100% of
Nina Footwear. Mr. Dabah, his children and wife are expected to
continue to control approximately 76.8% of the combined company’s
voting shares following the closing of the merger.
Kidpik’s entry into the merger agreement was approved by the
Kidpik Board of Directors (with Mr. Dabah abstaining from the
vote), acting on the unanimous recommendation of a special
committee consisting of independent and disinterested directors of
Kidpik that was formed to negotiate and evaluate a potential
strategic transaction involving Kidpik.
“Our transaction is expected to increase Kidpik’s revenue,
cashflow and prospects, while also strengthening Kidpik’s balance
sheet and significantly increasing stockholder value. I am
extremely happy to fulfill the wish of my late father in-law, Mr.
Stanley Silverstein, to make Nina a public company on the heels of
the 70th anniversary of our family business,” said Mr. Dabah. He
continued, “As a team we will refocus our attention on growing Nina
through brand and category extensions, international expansion, the
resurrection of the Delman shoe brand, and mining our extensive
Nina Footwear archive for additional growth, which we believe
presents great value. I believe the retention of the net operating
loss carryforwards is of tremendous value to our shareholders in
entering into the merger,” concluded Mr. Dabah.
An important factor in the special committee of the Board of
Directors recommending the approval of the merger was that due to
Mr. Dabah’s control of both companies, it is expected that Kidpik
will retain its ability to use its significant net operating loss
(NOL) carryforwards following the merger (currently estimated at
approximately $38 million), and that the transaction is not
anticipated to be deemed a change of control under Nasdaq
rules.
About the Proposed Transaction
According to the terms of the merger agreement, Kidpik will
acquire Nina Footwear through a reverse subsidiary merger that is
intended to be a tax-free reorganization. Upon closing of the
merger, the combined company will be renamed “Nina Holding Corp.”
and its symbol will change to “NINA”. There is not expected to be
any change in Kidpik’s officers or directors as a result of the
transaction.
There are also a number of related party transactions between
Nina Footwear and Kidpik as disclosed in Kidpik’s filings with the
Securities and Exchange Commission (SEC), which are expected to be
extinguished as a result of the merger.
The closing of the transaction is subject to customary closing
conditions, including the preparation and mailing of a proxy
statement by Kidpik, and the receipt of required stockholder
approvals from Kidpik and Nina Footwear stockholders, and is
expected to close in the third quarter of 2024.
Additional information regarding the proposed merger and the
merger agreement can be found in the Current Report on Form 8-K
filed with the SEC today by Kidpik.
About Kidpik
Founded in 2016, KIDPIK (NASDAQ:PIK) is an online clothing
subscription box for kids, offering mix & match, expertly
styled outfits that are curated based on each member’s style
preferences. Kidpik delivers a surprise box monthly or seasonally,
providing an effortless shopping experience for parents and a fun
discovery for kids. Each seasonal collection is designed in-house
by a team with decades of experience designing childrenswear.
Kidpik combines the expertise of fashion stylists with proprietary
data and technology to translate kids’ unique style preferences
into surprise boxes of curated outfits. We also sell our branded
clothing and footwear through our e-commerce website,
shop.kidpik.com. For more information, visit www.kidpik.com.
About Nina Footwear
Nina Footwear has been a leader in the women’s fashion footwear
industry for over 70 years. The company was founded by Stanley and
Mike Silverstein in a factory on Prince Street in SoHo, making
women’s premium clogs. Stanley named the brand after his daughter,
Nina Miner, who is now Nina’s Chief Creative Officer. Under the
leadership of CEO Ezra Dabah, the Nina brand includes women’s and
children’s premium footwear and accessories. The Nina collection is
designed for the modern woman who enjoys glamorous footwear,
fashionable design and exceptional quality at an accessible price.
The highly sought-after brand has been worn by many style icons and
celebrities. To discover the collection visit
www.ninashoes.com.
About Ezra Dabah
Ezra Dabah has served as the Chief Executive Officer and
director of the Company since April 2015 and as Chairman since
October 2021. Mr. Dabah has also served since 2012 as the Chief
Executive Officer and member of the Board of Directors of, and is
the majority owner of, Nina Footwear Corp., a wholesaler of women’s
and kids’ shoes and accessories. From 2013 to June 2015, Mr. Dabah
served as the Chief Executive Officer of Ezrani 2 Corp. d/b/a RUUM
American Kid’s Wear (“RUUM”), a
company which owned and operated childrenswear specialty retail
stores. Mr. Dabah purchased this business from American Eagle
Outfitters Inc (NYSE: AEO) and rebranded the stores and business
from 77 kids by American Eagle to RUUM American kids wear. Ezrani 2
Corp., voluntarily filed for Chapter 7 bankruptcy on June 18, 2015,
while Mr. Dabah was its Chief Executive Officer, which bankruptcy
was closed in August 2018. Mr. Dabah has over 45 years of
experience in apparel wholesale and retail operations. From 1972 to
1993, he was a director and an executive officer of The Gitano
Group, Inc. (NYSE:GIT)(“Gitano”),
where he managed product design, merchandising, and procurement. In
1984, he founded and became president of E.J. Gitano, a children’s
apparel division of Gitano. In 1991, Mr. Dabah joined The
Children’s Place Retail Stores, Inc. (NASDAQ:PLCE) as its Chairman
and CEO, leading the company’s turnaround and repositioning it from
a store that sold discounted brands to a single vertically
integrated brand that has stores, taking it public in 1997. In
November 2004, The Children’s Place purchased The Disney Stores
(300+ stores) from the Walt Disney Co (NYSE: DIS). Under Mr.
Dabah’s leadership the store count grew from approximately 150 in
1990 to almost 1,200 and sales reached $2 billion by the end of
2006. Mr. Dabah resigned from The Children’s Place as its Chief
Executive in September 2007. Between 2007 and 2012, Mr. Dabah
developed Ahhmigo, a natural and organic energy drink with patented
ingredients dispensing cap technology.
Changes and Additional Information About the Proposed Merger
and Where to Find It
This communication is not intended to be, and is not, a
substitute for the proxy statement or any other document that
Kidpik has filed or may file with the Securities and Exchange
Commission (“SEC”) in connection with
the proposed merger.
In connection with the proposed merger, Kidpik intends to file a
proxy statement with the SEC (the “Proxy
Statement”), that will be distributed to holders of Kidpik’s
common stock in connection with its solicitation of proxies for the
vote by Kidpik’s stockholders with respect to the proposed merger
and other matters as may be described in the Proxy Statement. The
Proxy Statement, when it is filed and mailed to stockholders, will
contain important information about the proposed merger and the
other matters to be voted upon at a meeting of Kidpik’s
stockholders to be held to approve the proposed merger and other
matters (the “Meeting”). Kidpik may
also file other documents with the SEC regarding the proposed
merger. Kidpik stockholders and other interested persons are
advised to read, when available, the Proxy Statement, as well as
any amendments or supplements thereto, because they will contain
important information about the proposed merger. When available,
the definitive Proxy Statement will be mailed to Kidpik
stockholders as of a record date to be established for voting on
the proposed merger and the other matters to be voted upon at the
Meeting.
Kidpik’s stockholders may obtain copies of the aforementioned
documents and other documents filed by Kidpik with the SEC, without
charge, once available, at the SEC’s web site at www.sec.gov, on
Kidpik’s website at https://investor.kidpik.com/sec-filings or,
alternatively, by directing a request by mail, email or telephone
to Kidpik at 200 Park Avenue South, 3rd Floor, New York, New York
10003; ir@kidpik.com; or (212) 399-2323, respectively.
Cautionary Statement Regarding Forward-Looking
Statements
Certain statements contained in this press release regarding
matters that are not historical facts, are forward-looking
statements within the meaning of Section 21E of the Securities and
Exchange Act of 1934, as amended, and the Private Securities
Litigation Reform Act of 1995 (the “PSLRA”). These include, but are not limited to,
statements regarding the anticipated completion and effects of the
proposed merger, projections and estimates of Kidpik’s corporate
strategies, future operations and plans, including the costs
thereof; and other statements regarding management’s intentions,
plans, beliefs, expectations or forecasts for the future. No
forward-looking statement can be guaranteed, and actual results may
differ materially from those projected. Kidpik and Nina Footwear
undertake no obligation to publicly update any forward-looking
statement, whether as a result of new information, future events or
otherwise, except to the extent required by law. We use words such
as “anticipates,” “believes,” “plans,”
“expects,” “projects,” “future,”
“intends,” “may,” “will,”
“should,” “could,” “estimates,”
“predicts,” “potential,” “continue,” “guidance,” and similar expressions to identify
these forward-looking statements that are intended to be covered by
the safe-harbor provisions of the PSLRA. Such forward-looking
statements are based on our expectations and involve risks and
uncertainties; consequently, actual results may differ materially
from those expressed or implied in the statements due to a number
of factors, including, but not limited to, the outcome of any legal
proceedings that may be instituted against Nina Footwear or Kidpik
following the announcement of the merger; the inability to complete
the merger, including due to the failure to obtain approval of the
stockholders of Kidpik or Nina Footwear; delays in obtaining,
adverse conditions contained in, or the inability to obtain
necessary regulatory approvals or complete regular reviews required
to complete the merger, if any; the inability to recognize the
anticipated benefits of the merger, which may be affected by, among
other things, competition, the ability of the combined company to
grow and successfully execute on its business plan; costs related
to the merger; changes in the applicable laws or regulations; the
possibility that the combined company may be adversely affected by
other economic, business, and/or competitive factors; the combined
company’s ability to manage future growth; the combined company’s
ability to raise funding; the complexity of numerous regulatory and
legal requirements that the combined company needs to comply with
to operate its business; the reliance on the combined company’s
management; the prior experience and successes of the combined
company’s management team are not indicative of any future success;
Kidpik’s and the combined company’s ability to meet Nasdaq’s
continued listing requirements; Kidpik and the combined company’s
ability to maintain the listing of their common stock on Nasdaq;
the ability to obtain additional funding, the terms of such funding
and potential dilution caused thereby; the continuing effect of
rising interest rates and inflation on Kidpik’s and the combined
company’s operations, sales, and market for their products;
deterioration of the global economic environment; rising interest
rates and inflation and Kidpik’s and the combined company’s ability
to control costs, including employee wages and benefits and other
operating expenses; Kidpik’s decision to cease manufacturing new
products; Kidpik’s history of losses; Kidpik’s and the combined
company’s ability to maintain current members and customers and
grow members and customers; risks associated with the effect of
global pandemics, and governmental responses thereto on Kidpik’s
and the combined company’s operations, those of Kidpik’s and the
combined company’s vendors, Kidpik’s and the combined company’s
customers and members and the economy in general; risks associated
with Kidpik’s and the combined company’s supply chain and
third-party service providers, interruptions in the supply of raw
materials and merchandise; increased costs of raw materials,
products and shipping costs due to inflation; disruptions at
Kidpik’s and the combined company’s warehouse facility and/or of
their data or information services, Kidpik’s and the combined
company’s ability to locate warehouse and distribution facilities
and the lease terms of any such facilities; issues affecting our
shipping providers; disruptions to the internet; risks that effect
our ability to successfully market Kidpik’s and the combined
company’s products to key demographics; the effect of data security
breaches, malicious code and/or hackers; increased competition and
our ability to maintain and strengthen Kidpik’s and the combined
company’s brand name; changes in consumer tastes and preferences
and changing fashion trends; material changes and/or terminations
of Kidpik’s and the combined company’s relationships with key
vendors; significant product returns from customers, excess
inventory and Kidpik’s and the combined company’s ability to manage
our inventory; the effect of trade restrictions and tariffs,
increased costs associated therewith and/or decreased availability
of products; Kidpik’s and the combined company’s ability to
innovate, expand their offerings and compete against competitors
which may have greater resources; the fact that Kidpik’s Chief
Executive Officer has majority voting control over Kidpik and will
have majority control over the combined company; if the use of
“cookie” tracking technologies is further restricted, regulated, or
blocked, or if changes in technology cause cookies to become less
reliable or acceptable as a means of tracking consumer behavior;
Kidpik’s and the combined company’s ability to comply with the
covenants of future loan and lending agreements and covenants;
Kidpik’s and the combined company’s ability to prevent credit card
and payment fraud; the risk of unauthorized access to confidential
information; Kidpik’s and the combined company’s ability to protect
intellectual property and trade secrets, claims from third-parties
that Kidpik and/or the combined company have violated their
intellectual property or trade secrets and potential lawsuits in
connection therewith; Kidpik’s and the combined company’s ability
to comply with changing regulations and laws, penalties associated
with any non-compliance (inadvertent or otherwise), the effect of
new laws or regulations, and Kidpik’s and the combined company’s
ability to comply with such new laws or regulations; changes in tax
rates; Kidpik’s and the combined company’s reliance and retention
of management; the outcome of future lawsuits, litigation,
regulatory matters or claims; the fact that Kidpik and the combined
company have a limited operating history; the effect of future
acquisitions on Kidpik’s and the combined company’s operations and
expenses; and others that are included from time to time in filings
made by Kidpik with the Securities and Exchange Commission, many of
which are beyond the control of Kidpik and the combined company,
including, but not limited to, in the “Cautionary Note Regarding
Forward-Looking Statements” and “Risk Factors” sections in Kidpik’s
Form 10-Ks and Form 10-Qs and in its Form 8-Ks, which it has filed,
and files from time to time, with the Securities and Exchange
Commission, including, but not limited to its Annual Report on Form
10-K for the year ended December 31, 2022 and its Quarterly Report
on Form 10-Q for the quarter ended September 30, 2023, and its
Annual Report on Form 10-K for the year ended December 30, 2023,
when filed. These reports are available at www.sec.gov and on
Kidpik’s website at https://investor.kidpik.com/sec-filings. Kidpik
cautions that the foregoing list of important factors is not
complete. All subsequent written and oral forward-looking
statements attributable to Kidpik or any person acting on behalf of
Kidpik are expressly qualified in their entirety by the cautionary
statements referenced above. Other unknown or unpredictable factors
also could have material adverse effects on Kidpik’s and the
combined company’s future results and/or could cause their actual
results and financial condition to differ materially from those
indicated in the forward-looking statements. The forward-looking
statements included in this press release are made only as of the
date hereof. Kidpik cannot guarantee future results, levels of
activity, performance or achievements. Accordingly, you should not
place undue reliance on these forward-looking statements. Except as
required by law, neither Nina Footwear nor Kidpik undertakes any
obligation to update publicly any forward-looking statements for
any reason after the date of this press release to conform these
statements to actual results or to changes in their expectations.
If they update one or more forward-looking statements, no inference
should be drawn that they will make additional updates with respect
to those or other forward-looking statements.
No Offer or Solicitation
This communication is for informational purposes only and is not
intended to and shall not constitute a proxy statement or the
solicitation of a proxy, consent or authorization with respect to
any securities or in respect of the merger agreement and is not
intended to and shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy or subscribe for any securities or a solicitation of any vote
of approval, nor shall there be any sale, issuance or transfer of
securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under
the securities laws of any such jurisdiction.
Participants in the Solicitation
Kidpik, Nina Footwear, and their respective directors, executive
officers and other members of management and employees may be
deemed to be participants in the solicitation of proxies from
Kidpik’s stockholders with respect to the proposed merger.
Information regarding the persons who may be deemed participants in
the solicitation of proxies from Kidpik’s stockholders in
connection with the proposed merger will be contained in the Proxy
Statement relating to the proposed merger, when available, which
will be filed with the SEC. Additionally, information about
Kidpik’s directors and executive officers and their ownership of
Kidpik is available in Kidpik’s Definitive Information Statement on
Schedule 14A, as filed with the Securities and Exchange Commission
on May 1, 2023 (the “Annual Meeting Proxy Statement”) and the
Current Report on Form 8-K filed with the SEC on December 8, 2023.
To the extent holdings of securities by potential participants (or
the identity of such participants) have changed since the
information printed in the Annual Meeting Proxy Statement, such
information has been or will be reflected on Kidpik’s Statements of
Change in Ownership on Forms 3 and 4 filed with the SEC. You may
obtain free copies of these documents using the sources indicated
above.
Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained in
the Proxy Statement and other relevant materials to be filed with
the SEC regarding the merger agreement when they become available.
Investors should read the Proxy Statement carefully when it becomes
available before making any voting or investment decisions. You may
obtain free copies of these documents from Kidpik using the sources
indicated above.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240401494590/en/
Investor Relations: ir@kidpik.com
Media: press@kidpik.com
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