Lyndhurst, N.J. – Harvey Electronics, the struggling New York area A/V chain, has postponed its annual shareholders meeting, originally scheduled for June 30, until July 21 in order to allow further communications with stockholders regarding the company’s proposed change in ownership.
In April, Harvey announced plans for a $4 million capital infusion from two private equity firms in exchange for four seats on the retailer’s board, including that of chairman Michael Recca.
Harvey said it will use the funds to refurbish its stores and add new locations.
The capital is coming from several institutional investors led by Trinity Investment Partners and Firebrand Partners, an investment firm focused on the specialty retail sector.
Trinity founder Andy Stackpole is expected to succeed Recca as chairman, while Harvey’s management team, including CEO Franklin Karp and chief financial officer Joseph Calabrese, will remain in their current positions following the investment. Joining Stackpole on the board are Trinity managing partners Ron Jones and Charles Berger. Another Trinity partner, Peter Larson, is expected to assume the role of special advisor to the chairman, while Firebrand’s Scott Galloway will likely assume a fourth seat on Harvey’s board.
Harvey’s remaining board members were expected to step down at the annual meeting, and be replaced by a new slate of directors to be voted on by shareholders.
Harvey said it will use the capital primarily to refurbish existing stores and add new locations employing the Harvey Design Studio retail concept that will showcase the company’s premium products and services in lifestyle vignettes that “reflect the design and comfort found in the homes of its high-end customers.” In addition, the funds will be used for general corporate purposes and working capital.
At the time of the announcement, the plan called for investors to purchase newly issued shares of 8 percent convertible preferred stock, convertible into common stock at $0.70 per share and receive approximately 1.7 million Series A seven-year warrants exercisable at $1.40 per share.
Harvey was trading at $.67 a share as of June 30, and faces delisting from the Nasdaq Capital Market for its consistent under-a-dollar share price.
