THE VIRGINIAN-PILOT 
              Copyright (c) 1996, Landmark Communications, Inc.

DATE: Tuesday, September 17, 1996           TAG: 9609170313
SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 
SOURCE: BY STEPHANIE STOUGHTON, STAFF WRITER 
                                            LENGTH:   45 lines

OCEAN REEF WITHDRAWS OFFER TO BUY BEST PRODUCTS BIT NEGOTIATIONS WITH FLA. FIRM AREN'T DEAD, RETAILER SAYS.

A Florida investment firm has withdrawn its offer to buy Richmond-based Best Products Co. Inc. for $63 million, saying the struggling retailer would need more financial support than anticipated.

However, negotiations with Miami-based Ocean Reef Management Inc. aren't dead, Best said in a statement Monday.

``Ocean Reef is interested in continuing discussions with us,'' Best spokesman Ross Richardson said. ``But I can't comment at this point whether there are any additional offers being made or whether we're currently talking to them.''

A woman who answered the telephone at Ocean Reef's offices said company officials did not want to comment Monday. The investment firm made its unsolicited offer on Sept. 3.

Best stock fell more than 58 percent on the news, dropping 62 1/2 cents a share to close at 43 3/4 cents on the Nasdaq Stock Market.

Even as the offer was rescinded, Best was delaying some payments to suppliers. The jewelry and home furnishings retailer also said it will not receive some shipments because of poor sales.

``All through this summer, one of the biggest issues for us has been vendor support,'' Richardson said. ``It's very important to us.''

When one vendor, or supplier, refuses to make shipments, others sometimes join in, causing a chain reaction. Caldor Corp.'s chief executive officer, Don Clarke, partly blamed vendors' jitters for forcing the retailer into bankruptcy last year.

Best Products, which has three traditional outlets and one jewelry store in South Hampton Roads, emerged from bankruptcy protection in June 1994 with hopes of transforming itself into a successful retailer.

But the company continues to falter as competition for shoppers' dollars intensifies. In fiscal 1995 ended Feb. 3, 1996, it lost $95.7 million, or $3.03 a share. That compared with a profit of $23.3 million, or 73 cents a share, for fiscal 1994. Meanwhile, sales declined 2 percent, to $1.5 billion, in fiscal 1995.

In March, Best announced plans to close 10 stores, back out of nine lease agreements and get rid of its giant catalog, which had been a company tradition since 1957.

Best Products operates 169 Best stores and about 11 Best Jewelry stores. by CNB