SC 13D 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 Amendment No.: * Name of Issuer: Hills Stores Co. Title of Class of Securities: Common Stock, Par Value $0.01 per share CUSIP Number: 431692102 (Name, Address and Telephone Number of Person Authorized To Receive Notices and Communications) Mr. Dimitrijevic, c/o Everest Capital Limited, Corner House, 20 Parliament St., Hamilton HM 12, Bermuda (Date of Event which Requires Filing of this Statement) May 10, 1995 If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. Check the following line if a fee is being paid with this statement X. (A fee is not required only if the filing person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of class. See Rule 13d-7). *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page. The information required in the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No. 649080306 1. Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person Everest Capital Limited 2. Check the Appropriate Box if a Member of a Group a. b. 3. SEC Use Only 4. Source of Funds AF 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) 6. Citizenship or Place of Organization Bermuda Number of Shares Beneficially Owned by Each Reporting Person With: 7. Sole Voting Power: 726,771 (including Preferred Stock convertible to 1,541 shares) 8. Shared Voting Power: 9. Sole Dispositive Power: 726,771 (including Preferred Stock convertible to 1,541 shares) 10. Shared Dispositive Power: 11. Aggregate Amount Beneficially Owned by Each Reporting Person 726,771 (including Preferred Stock convertible to 1,541 shares) 12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares 13. Percent of Class Represented by Amount in Row (11) 7.8% 14. Type of Reporting Person CO The purpose of this Schedule 13D is to report Everest Capital Limited's (the "Reporting Person") ownership in the Common Stock, Par Value $0.01, in Hills Stores Co. (the "Shares") of 7.8% of the Shares outstanding. Item 1. Security and Issuer The title of the class of equity securities to which this statement relates is: Common Stock, Par Value $0.1 per share, in Hills Stores Co. The name and address of the principal executive and business office of the Issuer is: Hills Stores Co. 15 Dan Road Canton, Massachusetts 02021 Item 2. Identity and Background (a) Everest Capital Limited (b) Corner House, 20 Parliament Street, Hamilton HM 12, Bermuda (c) The principal business of the Reporting Person is investment management for Everest Capital Fund, L.P., a Delaware limited partnership in which the Reporting Person serves as General Partner and Everest Capital International Ltd., a corporation organized under the laws of the British Virgin Islands. (d) During the last five years, neither the Reporting Person nor any person affiliated with the Reporting Person has been convicted in any criminal proceeding, excluding traffic violations or similar misdemeanors. (e) During the last five years, neither the Reporting Person nor any person affiliated with the Reporting Person has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which it or such person is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) The Reporting Person is a corporation organized under the laws of Bermuda. Item 3. Source and Amount of Funds or Other Consideration. As described in Item 2(a) above, the Reporting Person exercises investment discretion with respect to the capital of Everest Capital Fund, L.P. and Everest Capital International Ltd. In that capacity, the Reporting Person purchased the Shares, which are the subject of this Schedule 13D, on behalf of Everest Capital Fund, L.P. and Everest Capital International Ltd. for $17,093,120. Item. 4 Purpose of Transactions. The Shares held by the above mentioned entities were acquired for, and are being held for, investment purposes. The acquisitions of the Shares described herein were made in the ordinary course of the Reporting Person's business or investment activities, as the case may be. The Reporting Person, on behalf of the above mentioned entities, reserves the right to purchase additional Shares or to dispose of the Shares in the open market or in privately negotiated transactions or in any other lawful manner in the future and to take whatever action with respect to each of such entities' holdings of the Shares it deems to be in the best interests of such entities. The Reporting Person believes that the Shares are undervalued by the market despite positive operating results. In addition, the Reporting Person believes that the excess free cash flow generation of the Issuer would result in a private market transaction substantially in excess of the current market price of the Shares. The Reporting Person believes that the Issuer should explore all alternatives to maximize shareholder value in a manner consistent with its fiduciary duties. The Reporting Person will continue to monitor the investment of the above mentioned entities in the Issuer, and in conjunction with such efforts, the Reporting Person may communicate with, among others, the Issuer's management, its board of directors, and other shareholders of the Issuer. Further, the Reporting Person, on behalf of the above mentioned entities, reserves the right to exercise any and all of such entities' rights as a shareholder. Item 5. Interest in Securities of Issuer. (a) The Reporting Person beneficially owns 725,230 of the Shares and 1,541 shares of Series A Convertible Preferred Stock, Par Value $0.10 per share. The Preferred Stock is convertible into 1,541 Shares. Assuming conversion of the Preferred Stock, the Reporting Person would own 726,771 Shares which represents 7.8% of the Issuer's outstanding Shares. (b) The Reporting Person has sole power to vote and to dispose of the 726,771 Shares. (c) All transactions in the Shares effected by the Reporting Person during the past sixty days were effected in open-market transactions and are set forth in Exhibit A hereto. (d) No other person is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of the Shares. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer Except as described herein, there are no contracts, arrangements, understandings or relationships between the persons named in Item 2 hereof or between such persons and any other person with respect to any securities of the Issuer. Item 7. Material to be Filed as Exhibits. Exhibit A. Schedule of Transactions in the Shares made by the Reporting Person. Signature After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. May 22, 1995 ____________________________ Date /s/ Marko Dimitrejevic ____________________________ Signature Marko Dimitrejevic/President ____________________________ Name/Title EXHIBIT A SCHEDULE OF TRANSACTIONS Price Per Share (Excluding Date Shares Acquired Commission) ____ _______________ _____________ 5/03/95 15,000 23.500 5/03/95 185,000 23.373 5/04/95 25,000 23.375 5/05/95 78,323 23.167 5/08/95 97,429 23.356 5/09/95 50,000 23.955 5/10/95 1,000 23.750 5/10/95 10,000 24.000 5/10/95 30,000 23.977 5/11/95 35,000 23.750 5/11/95 35,000 23.821 5/12/95 30,000 23.875 5/12/95 30,000 23.875 5/12/95 50,000 23.912 5/15/95 28,700 23.652 5/16/95 13,000 23.769 5/17/95 25,000 23.575 5/18/95 5,000 22.925 00119001.BX2