L.A. Gear Shareholders OK Trefoil Deal

L.A. Gear shareholders Tuesday overwhelmingly approved the sale of $100 million of preferred stock to Trefoil Capital L.P., an investment fund set up by Roy E. Disney.

The stock is the equivalent of about a 30% stake in the financially ailing athletic wear concern. The sale, approved during an annual shareholders meeting in Santa Monica, is expected to be completed Thursday.

Shareholders also elected three Trefoil nominees to the board of the Marina del Rey-based concern, expanding the board to nine members from five. The three are Stanley Gold, Rudolph Reinfrank and Robert Moskowitz, all senior executives of Shamrock Capital Advisors Inc., which provides management and consulting services to Trefoil.

L.A. Gear is the designer and marketer of a line of athletic and casual footwear and related apparel products and accessories.

The company announced in May that it was looking for an investor to give it a hand as it struggled to smooth out its finances after losing money two quarters in a row.

Disney, who is also vice chairman of Walt Disney Co., responded with an offer to pump $100 million into the company via his private Trefoil Capital.

L.A. Gear’s troubles began last year when the company overestimated how many sneakers it would sell, leaving it with a huge inventory of shoes that it tried to market through discount retailers.

The clearance sales damaged relations with retailers who sold the same L.A. Gear shoes at regular prices.

In composite trading Tuesday on the New York Stock Exchange, L.A. Gear’s stock inched up 12.5 cents to close at $11.375.