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REEDS ANNOUNCES EARLY RETIREMENT OF DEBT; Purchases Interest Rate Cap on Revolving Bank Facility.

WILMINGTON, N.C.--(BUSINESS WIRE)--March 8, 1996--Reeds Jewelers, Inc. (Nasdaq:REED) today announced that it has recently retired the remaining $4,286,000 of its 10.79% Senior Notes previously scheduled to mature in October 1998. The Company incurred prepayment penalties totaling $293,000, which will be reflected in the fourth quarter ending February 29, 1996. Reeds expects to recover this entire amount over the next three years due to reduced interest expenses.

The Company also announced that it has purchased an interest rate cap on $30,000,000 of its borrowings under the revolving bank credit facility, in order to hedge its interest rate exposure. Reeds' borrowings under its revolving bank facility are priced at the 30-day LIBOR rate. The cap protects the Company against 30-day LIBOR rising above 6.0%.

Alan M. Zimmer, President and CEO of Reeds, commented, "Both of these financing arrangements give us financial flexibility and illustrate our commitment to improving every area of our business where we can better control costs."

Reeds Jewelers is a specialty retailer presently operating 96 stores primarily in enclosed regional shopping malls in 12 states principally in the Southeastern and Mid-Atlantic states. The Company specializes in the sale of fine jewelry, and emphasizes, "Quality, Value, and Service."

CONTACT: REEDS JEWELERS, INC.

Alan M. Zimmer

President & CEO

910/350-3111

James R. Rouse

Treasurer & CFO

910/350-3116

or

Betsy Brod/Stephanie Conzelman

Media Contact:

Suzanne Miller

Morgen-Walke Associates

212/850-5600
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Publication:Business Wire
Date:Mar 8, 1996
Words:240
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