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LONDON FOG AND PACIFIC TRAIL PLAN MERGER; MERGED COMPANY TO BE MARKET LEADER IN RAINWEAR AND OUTERWEAR

 ELDERSBURG, Md., Jan. 12 /PRNewswire/ -- London Fog Corporation, the leading designer, manufacturer and distributor of rainwear and outerwear, announced today that it has signed a letter of intent to merge with PTI Holding Corporation, the parent company of Pacific Trail, Inc., the Seattle-based outerwear designer and distributor. The merged company will continue to be called London Fog Corporation. Pacific Trail will maintain its present management and brand identity, while functioning as a division of London Fog.
 The anticipated merger constitutes the latest step in a series of significant changes initiated by Arnold P. Cohen, London Fog's recently appointed chairman and chief executive officer. Cohen, who will continue in his role as chairman and CEO, spent more than five years as president and chief operating officer of apparel catalog retailer J. Crew Group, Inc., after serving as an executive at both Gucci America and Bloomingdale's.
 London Fog is controlled by investment funds managed by Merrill Lynch Capital Partners, Inc. Pacific Trail is controlled by GKH Partners. The merged company will continue to be controlled by Merrill Lynch Capital Partners, which will hold a majority stake in the company's common equity, and GKH Partners.
 The management teams of London Fog and Pacific Trail will also have a significant ownership position in the merged company. The financial terms of the transaction were not disclosed.
 James D. Milligan, most recently president and CEO of Sunbeam Corporation after serving in the same capacity at Spalding and Evenflo Companies, Inc. and as president of Borden's Foods Division, will join Cohen as a member of London Fog's board of directors and will also serve as chairman of the board's executive committee. Dan Lufkin of GKH Partners and Robert F. End of Merrill Lynch Capital Partners, will serve on the executive committee as well.
 Among those joining Cohen and Milligan on the company's board of directors will be John Varvatos, London Fog's vice chairman and executive vice president, Douglas C. Hillman, London Fog's president and chief operating officer, and Robert C. Grayson, formerly a senior executive at Limited Corp.
 "This will create the most dynamic company in the outerwear apparel industry," said Cohen, who described the merger as, "a perfect business marriage between leading companies with extremely complementary strengths and highly compatible management teams." According to Cohen, "this is the first major step in the ongoing revitalization and growth of London Fog, America's premier outerwear company."
 London Fog, which was founded in the 1920s and is based in Eldersburg, has about $350 million in annual sales as a leading manufacturer of men's and women's raincoats and outerwear sold primarily by department and specialty stores. Pacific Trail has operated for about 50 years and sells its value-oriented men's, women's and children's outerwear through specialty and department stores. It also has a well-regarded ski and outdoor division that serves ski specialty and sporting goods stores. Pacific Trail's revenues in 1993 are expected to be approximately $60 million.
 Following the merger, London Fog will solidify its position as the U.S. market leader in outerwear and rainwear. The merged company will also strengthen its position in women's and children's outerwear. London Fog will continue to operate its network of over 100 factory stores. Projected revenues for the merged company in calendar year 1994 are expected to approach $500 million.
 "This merger blends the strengths of London Fog, a company with strong domestic and international manufacturing and sourcing capabilities and a well-established brand identity, with Pacific Trail, a company which markets to younger consumers and has strong design and offshore sourcing capabilities," said Cohen. "The complementary nature of both companies' extensive distribution networks, marketing capabilities and customer bases presents exciting opportunities for the new London Fog."
 Merrill Lynch Capital Partners, a wholly owned subsidiary of Merrill Lynch & Co., Inc., acts as a general partner for two leveraged buyout funds, whose limited partners are institutional investors. Investments made by Merrill Lynch Capital Partners are funded by the limited partners, and include up to a 20 percent co-investment by Merrill Lynch. Merrill Lynch Capital Partners' holdings include significant interests in Ann Taylor Stores Corp., First USA, Inc., Simmons Company, Borg-Warner Automotive Inc., Borg-Warner Security Corp. and Pathmark Stores, Inc.
 Chicago-based GKH Partners, L.P., an investment partnership whose general partners are entities controlled by Jay and Tom Pritzker, Dan Lufkin and Mel Klein. Jay and Tom Pritzker are private investors and chairman and president, respectively, of the Hyatt Corporation. Lufkin is a founder of the investment banking firm of Donaldson, Lufkin & Jenrette, a former governor of the New York Stock Exchange and a private investor. Klein is an attorney and private investor, based in Corpus Christi, Texas.
 -0- 1/12/94
 /CONTACT: Michael Millican or Marilyn Rachap of Robert Marston and Associates, 212-371-2200/


CO: London Fog Corporation; PTI Holding Corporation;
 Pacific Trail, Inc. ST: Maryland, Washington IN: TEX SU: TNM


PS-JG -- NY033 -- 1392 01/12/94 11:44 EST
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Publication:PR Newswire
Date:Jan 12, 1994
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