Hampshire Group Q1 sales decline 11.9%

“The board of directors and I are making needed improvements to refocus the Company. These include two senior management changes, a new CEO and new head of sourcing and operations, and turnover of three long-standing members of the board of directors and appointment of two new directors.

"The board and senior management have an owner orientation, with insiders owning nearly half the company. Going forward, incentive plans for management will be aligned more directly with stock value. We are certain to implement more management and personnel changes as we attack costs, implement a new sourcing and merchandising strategy, eliminate unprofitable business and refocus the firm's culture.”

Management believes there is a clear path to incremental profitability by:

- Realizing the opportunity to grow Rio Garment;

- Improving gross margins and growing sales in the Hampshire Brands business;

- Leveraging firm's infrastructure and reputation in the apparel industry with new customer relationships and complementary lines of business;

- Reducing overall costs with a focus on our annual real estate expense.

Mr. Buxbaum concluded, “I was appointed CEO in January 2013. Given long lead times in the apparel industry, sales and margins are contracted and fixed for most of this year. We are pushing to produce profitability for this year, but shareholders will not see the full impact of recent changes until 2014. I am confident we will produce over time a healthy, growing and profitable company.”

Hampshire Group