Bernard Chaus Reports Strong First Quarter Results; Diluted EPS Increases to $0.05 From Loss of $0.02 in Year-Ago First Quarter.

Business Editors

NEW YORK--(BUSINESS WIRE)--Oct. 30, 2002

Bernard Chaus, Inc. (OTC Bulletin Board: CHBD.OB) today reported significantly improved financial results for its first quarter of fiscal year 2003, driven by a substantial increase in the Company's gross margin.

For the quarter ended September 30, 2002, net income increased to $1.6 million, or $0.05 per diluted share, compared to a net loss of $582,000, or a loss of $0.02 per share, in the first quarter last year. Revenues for the first quarter of fiscal 2003 were $34.8 million versus $39.5 million in the first quarter a year ago.

"We are very pleased that the solid progress we made in fiscal 2002 is carrying over into our new fiscal year," said Josephine Chaus, Chairwoman and Chief Executive Officer. "As evidenced by the significant increase in our gross margin to 27.2% from 20.9% in last year's first quarter, we are operating more efficiently and that is directly translating into increased profits. We expect the retail environment to remain challenging for the foreseeable future. Nevertheless, we believe the operational changes we have made and the ongoing success of our design strategies will continue to contribute positively to our performance, and, with the continued careful management of our business, will enable the Company to be profitable for the year. While the second quarter is historically our weakest period, we are on track at this time to report a significant improvement in results versus last year's second quarter."

Nick DiPaolo, Vice Chairman and Chief Operating Officer, added, "The improvement in first quarter results was driven by the significantly higher gross margin as well as reduced operating costs. In particular, we have benefited from steps we have taken to source our products more cost effectively, while managing our inventories with an eye toward reducing unprofitable off-price sales. With the decrease in off-price sales, we expect revenues for the first half of the year to be lower but more profitable, as we stay focused on enhancing profitability in what continues to be a difficult retail climate. In addition, we continue to explore opportunities to increase our revenue over the longer term."

Bernard Chaus, Inc., designs, sources and markets an extensive range of women's career and casual sportswear, principally under the Josephine Chaus Collection, Josephine Chaus Studio, and Josephine Chaus Sport trademarks. The Company's products are sold nationwide through department store chains, specialty retailers and other outlets. Further information can be found at www.BernardChaus.com.

This press release contains forward-looking statements that are based upon current expectations and involve a number of uncertainties, including retail market conditions, consumer acceptance of the Company's products, and the ability to achieve anticipated profit margins. Further information on potential factors which could affect the Company's financial results are included in the Company's Form 10-K for the year ended June 30, 2002.

                 BERNARD CHAUS, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF OPERATIONS

     (Dollars in thousands, except number of shares and per share
                               amounts)

                                             For the Quarter Ended
                                          September 30,  September 30,
                                              2002            2001
                                    ------------------ ---------------
                                                  (Unaudited)
Net sales                                  $   34,791      $   39,458
Cost of goods sold                             25,334          31,231
                                    ------------------     -----------
Gross profit                                    9,457           8,227

Selling, general and administrative
 expenses                                       7,548           8,245
                                    ------------------     -----------
Income (loss) from operations                   1,909             (18)

Interest expense, net                             336             561
                                    ------------------     -----------

Income (loss) before income tax
 provision                                      1,573            (579)
Income tax provision                               10               3
                                    ------------------     -----------

Net income (loss)                          $    1,563      $     (582)
                                    ==================     ===========

Basic earnings (loss) per share            $     0.06      $    (0.02)
                                    ==================     ===========

Diluted earnings (loss) per share          $     0.05      $    (0.02)
                                    ==================     ===========

Weighted average number of
  common shares outstanding - basic        27,222,000      27,216,000
                                    ==================     ===========

Weighted average number of
      common and common equivalent
       shares
      outstanding - diluted                29,502,000      27,216,000
                                    ==================     ===========

                  BERNARD CHAUS, INC AND SUBSIDIARIES

               CONDENSED CONSOLIDATED BALANCE SHEET DATA

                        (Dollars in thousands)

                                      September 30,    September 30,
                                          2002             2001
                                 -------------------- --------------
                                                 (Unaudited)
Cash                                     $       123     $      107
Accounts receivable, net                      25,880         35,925
Inventories                                   11,002         18,259
Prepaid expenses and other
 current assets                                  788            637
                                 -------------------- --------------
 Total current assets                         37,793         54,928
Fixed and other assets, net                    5,004          6,195
                                 -------------------- --------------
Total assets                             $    42,797     $   61,123
                                 ==================== ==============


Revolving credit borrowings              $     7,619     $   21,307
Accounts payable and accrued
 expenses                                     14,494         18,153
Term loan - current                            1,500          1,000
                                 -------------------- --------------
 Total current liabilities                    23,613         40,460
Term loan and other long-term
 liabilities                                   9,405         10,566
                                 -------------------- --------------
 Total liabilities                            33,018         51,026
Total stockholders' equity                     9,779         10,097
                                 -------------------- --------------
Total liabilities and
 stockholders' equity                    $    42,797     $   61,123
                                 ==================== ==============