The multimedia retailer Zany Brainy, which announced in late March that it was planning a public offering (News, Apr. 5), has provided a revised prospectus with more details about its plans.

According to the document, Zany Brainy expects to issue more than 7 million shares, priced between $10 and $12 per share. Of the shares being offered, the company is selling 3.8 million shares, while shareholders are offering 2.3 million. The underwriters also have the option to purchase an additional 915,000 shares from the retailer.

Based on a price of $11 per share, Zany Brainy anticipates net proceeds of approximately $37.6 million from the offering. The company reported it will use $15 million to repay bank debt, $13 million to open its new distribution center and additional stores, $2 million to implement new enterprise software and the balance for general corporate purposes. Zany Brainy had previously announced that it plans to open 50 stores over the next two years; as of May 1, the company had already opened seven new outlets, giving the chain a total of 82 stores.

Among the shareholders who are selling stock are nine executive officers and directors, offering a total of 184,425 shares that will reduce their stake in the company from 42.8% to 34.2%. Company founder David Schlessinger is selling 1.2 million shares, a move that will shrink his stake to 4.2% from 12.4%. Another selling shareholder is the Alan Mirken 1997 Three-Year Trust, which is selling 116,844 shares, cutting the trust's stake to 1.7% from 2.8%. Mirken had been the head of Crown Publishers.

The prospectus reported that for the first quarter ended May 1, 1999, sales at the company jumped 47.8% to $40.6 million and that the retailer cut its net loss to $1.4 million from $2.5 million. The company attributed the improved results to a 9% increase in comparable store sales along with $9.2 million from stores opened in 1998 (but not included in its comparable sales base) and $1.4 million from the seven new stores opened in the period. Popular items in the quarter were Beanie Babies and Crazy Bones.