1



                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

           -----------------------------------------------------------

                                    FORM 8-K

                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

         DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): MAY 16, 2001
         --------------------------------------------------------------

                              HANOVER DIRECT, INC.
          -------------------------------------------------------------
               (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

                                     1-12082
                       ----------------------------------
                            (COMMISSION FILE NUMBER)

          DELAWARE                                     13-0853260
- -----------------------------------           -----------------------------
(STATE OR OTHER JURISDICTION                        (I.R.S. EMPLOYER
      OF INCORPORATION)                          IDENTIFICATION NUMBER)

    1500 HARBOR BOULEVARD
    WEEHAWKEN, NEW JERSEY                                 07087
- -----------------------------------                  --------------
    (ADDRESS OF PRINCIPAL                              (ZIP CODE)
     EXECUTIVE OFFICES)



         REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (201) 863-7300
                                                        -------------------


- --------------------------------------------------------------------------------
           (FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)



   2



ITEM 9.  REGULATION FD DISCLOSURE.

     Hanover Direct, Inc. (the "Company") held a conference call on Wednesday,
May 16, 2001, to review the fiscal 2001 results and related matters with
participants. The following is an unofficial transcript of the conference call:

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the
Hanover Direct first quarter 2001 earnings release conference call. During the
presentation all participants will be in a listen-only mode. Afterwards, you
will be invited to participate in the question and answer session. At that time,
if you have a question, you'll need to press the one, followed by the four, on
your telephone. As a reminder, this conference is being recorded, Wednesday,
May 16, 2001.

     I would now like to turn the conference over to Mr. Brian Harriss,
executive vice president and chief financial officer. Please go ahead, sir.

     Brian Harriss: Good morning ladies and gentlemen, and welcome to the
Hanover Direct first quarter, fiscal 2001 earnings conference call. This is
Brian Harriss, the chief financial officer, and I'm with Tom Shull, the chief
executive officer, and Sarah Hewitt from the law firm of Brown Raysman. Before
we start, I'll turn it over to Sarah, who will read the SEC Safe Harbor
language.

     Sarah Hewitt: Good morning. In a few moments Tom Shull, the Company's chief
executive officer, and Brian Harriss, the Company's chief financial officer,
will discuss the Company's results of operations for the fiscal quarter ended
March 31, 2001, and the Company's ongoing strategic business realignment
program, and answer any questions you may have. Such discussion, as well as the
answers to your questions, may include a number of forward-looking statements.

     In accordance with the Safe Harbor Provision of the Private Securities
Litigation Reform Act of 1995, please be advised that the Company's actual
results could differ materially from these forward-looking statements.
Additional information that could cause actual results to differ materially is
contained in the Company's Annual Report on Form 10-K for the fiscal year ended
December 30, 2000, and the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 2001, recently filed with the SEC, both of which
may be obtained from the public reference facilities maintained by the
Securities and Exchange Commission in Washington, DC, and the regional offices
of the SEC in New York City and Chicago, Illinois, or from the SEC's web site
located at www.sec.gov, as well as from the offices of the American Stock
Exchange in New York City. Hanover Direct always tries to provide the maximum
information possible to its shareholders and the investment public, consistent
with its legal obligations. In light of Hanover's status as a public company,
the need to avoid selective disclosures and SEC restrictions, including recently
adopted regulations such as Regulation FD, Company management does not generally
respond to requests for material non-public information. If one of your
questions calls for the disclosure of material non-public information,
management may not be able to respond to it I this call. We hope you understand.

     B. Harriss: Thank you very much, Sarah. Again, welcome ladies and
gentlemen. I believe today's meeting, discussion, may be shorter and more
focused than similar conference calls in the past. And the reason I say that is
Hanover Direct itself is becoming more focused and I will describe those actions
in the context of the first quarter results and continuing programs that we are
continuing to execute.

   3


     First, and foremost, Hanover Direct is pleased to announce that the sales
in the first quarter of fiscal 2001 were $144.3 million, which was a $14
million, or 10.9%, increase over last year's figure of $130 million. This
increase was primarily in the core catalogs: Domestications, Improvements,
Silhouettes, and The Company Store. Again, this is in line with the focus of our
strategic realignment program, which is to pare back non-productive and loss
leading operations and focus on core businesses that can produce profits and
cash flow now and in the future.

     I think we are very, very pleased with this 11% overall increase in sales,
particularly given the retailing and catalog environment that I'm sure most of
you have read and heard about in the first quarter of this year. It comes on top
of a similar growth in the fourth quarter of last year, again, amid an economic
environment, particularly in December of last year, when many retailers and
catalog companies had less buoyant results than Hanover Direct.

     I think this is an indication of the improvement in the core business that
has occurred over the last 18 months, and that we are increasingly focusing on
in the current realignment program. This can be seen in two important measures.
The number of people that made purchases for the rolling 12 months ending on
March 31st was 5.3 million. This is up approximately 10% versus the 4.9 million
figure for the 12 months ended March 25th, 2000. Clearly, the heart of any
catalog operation is the size of its file and the size of the people that
purchase from that file, and these results are very positive.

     Additionally, our catalog mailings in the first quarter totaled 72.4
million, which was up from the 69.3 million in the similar period in 2000, so we
continue to increase our mailing against an increasing file and that's producing
sales growth at a very positive 11% in the first quarter. We would hope to
continue this type of trend in terms of a growing file, growing mailings
producing growing sales in the future. We feel that growth will continue
positive, we are experiencing some sluggishness, albeit positive growth, in the
second quarter of this year.

     At the bottom line, the Company reported a net loss of $7.6 million in the
first quarter of this year, compared with a $13.4 million loss in the comparable
period last year, or a $5.8 million decrease in the loss. Included in the $7.6
million loss in the quarter was an additional charge of $1.1 million, primarily
related to the elimination of 46 additional positions over and above the 285
positions that were announced in the first quarter, and the 90 positions that
were announced in the fourth quarter of last year. So taken altogether, since
the fourth quarter of last year, we have eliminated approximately 400 FTE
positions in the Company. Most of these positions, not all, but most of them,
related to the rise in business, the B- to-B business, which we have effectively
minimized at this point to a number of customers in the Keystone business that
are still with us and will be with us in the future.

     Some additional information that we're disclosing today that did not occur
in the quarter but, again, which are in line with our strategic realignment
plan: on May 3rd we successfully sold the Kindig Lane warehouse fulfillment
facility in Hanover, Pennsylvania. This is one of the initiatives that we
announced as part of the realignment program in the first quarter. The Company
received $4.7 million in cash for that facility. We expect fees of approximately
$300,000, so the net amount of $4.4 million was used to pay down long-term and
short-term debt outstanding under the Congress credit facility. We anticipate
that there will be a gain on this sale in the order of magnitude of $1 million
dollars, which would be reported in the second quarter of this year.

     The other thing I'd like to point out is, in our last conference call, the
Company took an unusual step, which it had never done in the past, which was to
deliver a target measure for the fiscal 2001 year. At that
   4

time we disclosed that our target for EBITDA, earnings before interest, taxes,
depreciation and amortization, for the 2001 business year was approximately $15
million. This number, of course, did not include either incremental costs
related to ongoing realignment expenses, much like the $1.1 million that we
incurred incrementally in the first quarter, or gains, such as the profit that
we would expect to record in the second period of the sale of the Kindig
facility.

     I'm pleased to report that the figures and performance that we are
reporting for the first quarter, plus our year-to-date results in April and
through our current period in May, put us on this EBITDA target of $15 million.
We are comfortable in, at this point, keeping that target. Our performance to
date is on that target, we've been able to offset some sales shortfalls versus
plan; now, I'm talking about sales versus plan versus sales versus prior year,
because the performance versus prior year is positive, we've had some shortfall
on our sales versus plan, however, these have been fully offset by cost
performance, which is actually better than plan year-to-date and, of course, we
would anticipate that cost performance continuing throughout the year because
that is the impact of, primarily, position cuts that we have made and the
associated moneys that are not being spent because we no longer have people in
positions working against the business.

     Again, I'll reiterate that $15 million EBITDA performance for this full
year would represent approximately a $70 million swing from last year's negative
number to this year's positive number. And I'll also reiterate that the measure
we're talking about is EBITDA; it is not net profit. As I said last time, we do
anticipate a reported (net profit) a net loss for this year as a result of
depreciation, amortization, interest charges, plus the preferred dividend, which
is a PIK dividend, not a cash dividend. Hence the $15 million of EBITDA should
translate into a very positive number, somewhat lower than that, but positive,
nonetheless, in cash flow, because we anticipate year end to year end, we would
not have any increase in working capital and we'd have a very, very modest
capital expenditure for this year. In fact, I focus people on the cash flow in
the first quarter, which indicates that we spent approximately $483,000 on
capital in the quarter. We would expect that this would roughly be our trend for
the entire year; we do not have major capital items coming on board during the
year.

     Finally, in terms of initiatives the Company is taking, I'll remind people
that we still have Newmark Retail Financial Partners retained for the sale of
two assets of the Company, the Brawn business, which is primarily the
International Male brand, and the Gump's retail and the Gump's By Mail brand.
Those two asset sales are components of the strategic realignment plan. I
mention them both to remind people that those events are actions that the
Company is still pursuing, and also state that any proceeds from the sale of
either of those assets or, in fact, other assets that the Company might sell
during this year, would be incremental to the $15 million EBITDA and the cash
flow results that we are currently targeting for the year.

     In addition to the initiatives on the asset side in terms of realizing
value through asset sales of non-core assets, we also have a host of incremental
cost reduction programs that relate to productivity improvements that we are
processing now. I'll give you a flavor for what those items are like. We have a
major contract for our long distance talk time for our telemarketing program
expiring this year. That contract, when it comes up, we anticipate that we'll be
able to re-sign at much lower rates and generate some benefits this year against
our plan but, certainly, annualize benefits next year through lower talk time.
We currently have about 65 million minutes a year of talk time.

     Another program that we have is a small one, it uses a product called
Opti-pak, which allows people in the fulfillment centers to actually use the
proper size containers. There's a risk that when people are packaging things,
they'll pick a big box to make sure they can get everything in; that may not be
the most
   5

productive or cost effective thing to do. A system like this allows the packer
to always know what is the most optimized package. Items like this can save
costs.

     I give you these as just a flavor of a host of many items that we have in
the works that are directed at the productivity side of our business, the
fulfillment side of our business, the underlying cost structure, and these
programs are not included in the plan that underlies the target of $15 million
of EBITDA.

     So in summary, I think that the first quarter was a very positive quarter
for Hanover Direct in the context of the initiatives that we set out for
ourselves. We believe we're on plan in terms of executing the strategic
realignment program that was announced January 5th to the public that was
approved by the Board in December of last year following the appointment of Tom
Shull as President and Chief Executive Officer of Hanover Direct, Inc.

     Alicia, I think I'm through with my statements and I will throw the meeting
open to questions and answers that can be directed at either myself or Tom
Shull.

Operator: Thank you. Ladies and gentlemen, if you wish to register a question
for today's question and answer session, you will need to press the one,
followed by the four, on your telephone. You will hear a three-tone prompt to
acknowledge your request. If your question has been answered and you wish to
withdraw your polling request, you may do so by pressing the one, followed by
the three. If you're on a speakerphone, please pick up your handset before
entering your request.

     One moment, please, for the first question. Morton Roth with Crystal Clear
Industries, please go ahead, sir.

Morton Roth: Thank you. My question relates to the comments concerning the sale
of assets.

B. Harriss: Yes.

M. Roth: And what I wanted to ask was if all of the profits, from any future
sales, are they all committed to the pay down of the Congress debt?

B. Harriss: The - no. The answer to your question is no, that the way the credit
agreement works is, for any type of property. there's a certain amount of
lending under the credit agreement secured by the property and, depending on
what type of asset class it is, inventory versus fixed property, we have a
direct obligation to satisfy that outstanding amount.

M. Roth: So there is a potential for some of the funds, at least, to be put back
into the, to working capital, then?

B. Harriss: Yes.

M. Roth: Yeah.

B. Harriss: Oh, yes, yes. What made the Kindig sale somewhat different from an
asset sale like Gump's and International Male is that the borrowings associated
with the Kindig facility were directly secured against the asset value of that
facility in our long-term debt line with Congress, therefore the bulk of them
had to be used to
   6

retire the associated debt. On the other hand, let me, I can use an example, in
the case of Gump's By Mail, the catalog, were we to sell that, what we would
have to satisfy directly with Congress would be an amount that Gump's By Mail
borrows against inventory and receivables. That would be, we would anticipate a
relatively modest amount versus the total proceeds from the sale of a catalog.
The difference between those two amounts would be available to the Company for
working capital, we would anticipate. Initially what we would do would be to pay
down the revolver and use it with our relationship with our vendors, but those
proceeds would stay within Hanover Direct and be available to the Company over
and above the amount that we have to pay Congress on associated asset
borrowings.

M. Roth: Thank you.

B. Harriss: Does that answer your question, Morton?

M. Roth: Yes, it does, thank you.

Operator: Your next question is from David Brill of Hillsdale House, please go
ahead.

David Brill: Yes, can you address the working capital and current ratio
situation in the first quarter?

B. Harriss: Yes. We have modest positive net working capital at the end of the
first quarter. We have existing availability under our Congress line.

D. Brill: What is the availability on the Congress line now?

B. Harriss: We do not disclose that as a matter of course.

D. Brill: What about the current ratio?

B. Harriss: I believe it's 1.2, around that amount.

D. Brill: Are you experiencing any tightening by the vendors in terms of the
credit they're extending?

B. Harriss: No. We've had, I think, in line with the marketplace, numerous
concerns by many vendors. We work with our vendors on a day-to-day basis. I
think that one of the positives we have versus, say, peer groups, is our
business is growing, they've seen it grow, they've seen it grow over 18 months,
and they're pleased with the fact that Hanover Direct as a client is growing
business for them as it grows.

D. Brill: Okay, thank you.

Operator: Once again, ladies and gentlemen, if you have a question you will need
to press the one, followed by the four, at this time.

     I am showing no further questions at this time. Please continue with your
presentation or any closing remarks.

B. Harriss: Are there no more questions?

   7


Operator: I am showing no questions, sir.

B. Harriss: Okay. I guess I'll ask one more time before we close the meeting,
any questions of Mr. Shull or myself? If that's the case, thank you very much.
Thank you Alicia.

Operator: Ladies and gentlemen, that does conclude the conference for today. You
may all disconnect, and thank you.

- --------------------------------------------------------------------------------
A re-play of the conference will be available until 11:59 p.m. Eastern Standard
Time on May 17, 2001 and can be accessed by calling 800-633-8284 (domestic) and
858-812-6440 (international), Access Code #: 18792870.

   8



                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                          HANOVER DIRECT, INC.

                                          --------------------------------------
                                                     (Registrant)

May 17, 2001                              By:        /s/ Brian C. Harriss

                                          --------------------------------------
                                          Name:  Brian C. Harriss
                                          Title:    Executive Vice President and
                                                    Chief Financial Officer