Candie's Reports Increases in Net Revenues for Fourth Quarter and Fiscal Year.

PURCHASE, N.Y.--(BUSINESS WIRE)--April 23, 1997--

Company to Redeem 1.475 Million Outstanding Class B Warrants

Candie's Inc. announced today a 19 percent increase in net revenues for its fiscal year ended Jan. 31, 1997 ("fiscal 1997"), to $45,005,416 from $37,914,127 in the previous fiscal year.

In order to expand the presence of the Candie's brand name in major department stores, the company lowered prices and increased marketing and advertising expenditures during fiscal 1997. Accordingly, operating income for fiscal 1997 of $965,972 was lower than operating income of $2,057,476 for the prior year. For the year ended Jan. 31, 1997, Candie's net income was $1,145,315, which included a $1,010,000 tax benefit as a result of a reduction in the valuation allowance of the company's net deferred tax assets recorded in the fourth quarter. For the prior year, the company had net income of $1,053,956. Per share net income for fiscal 1997 was 13 cents per share versus 12 cents for the year ended Jan. 31, 1996, based upon average shares outstanding of 9,142,598 and 8,725,888, respectively.

In the fiscal fourth quarter ended Jan. 31, 1997, net revenues increased by 65 percent to $12,742,870 from $7,720,800 in the same quarter of the prior year. Operating income for the fiscal 1997 fourth quarter was $598,165 and net income was $1,297,042, or 13 cents per share. For the prior year's fourth quarter, operating income was $2,218 and the company had a net loss of $127,612 or (one cent) per share. Average shares outstanding for the fiscal 1997 and 1996 periods were 9,640,000 and 8,745,738, respectively.

Neil Cole, chairman and CEO of Candie's, said, "In keeping with our long-term strategy to grow the Candie's brand, we are successfully building our presence in the department store channel, adding thousands of new doors at fine retailers including May Company, Nordstrom, Dillard's and Federated. Our fiscal fourth quarter operating results were in line with management's expectations, and we believe we are well positioned for revenue and profit growth in the current fiscal year. In fact, Candie's hottest product at present, the slide, which we began shipping in January 1997, was not even a major factor in fiscal 1997 results.

"The excitement and publicity generated by the comeback of the Candie's slide has brought attention to our entire line of casual, moderately priced shoes and boots, demonstrating the growing vitality of the overall Candie's brand and our core product lines," said Cole. "Fiscal 1998 bookings currently stand at approximately $67 million, versus about $27 million a year earlier, and we are seeing strong growth in all product areas. We expect the fiscal year ended Jan. 31, 1998 to be a breakout year for Candie's, and we are seeking to achieve operating profit margins in the 8% to 10% range.

"As we move forward, our goal is to achieve consistent growth in profitability by continuing to build the Candie's image, starting from the product base we know -- footwear -- and expanding into other areas over time. We will also maximize the efficiency of our buying and design by offering our core products to the private label market and in other channels of distribution under other brands, including BONGO(TM) for mid-tier department stores, which enables us to meet the needs of specific markets without diluting the focus or marketing message of the Candie's brand. In keeping with this effort, we recently launched children's lines for Candie's and BONGO(TM) on a nationwide basis, both of which are showing great potential," continued Cole.

Candie's also reported that it is exercising its option to redeem its 1,475,000 outstanding redeemable Class B Common Stock Purchase Warrants (NASDAQ: CANDL) at a price of 25 cents per Class B Warrant. Each Class B Warrant entitles the registered holder to purchase, at a price of $4, one share of Candie's Common Stock. The company currently expects that any proceeds from the exercise of Class B Warrants will be used to repay short-term borrowings, finance certain capital expenditures, and for general working capital needs.

The Class B Warrants may be exercised until 5:00 p.m. EDT on May 27, 1997, at which time, unless extended by Candie's, the right to exercise the Class B Warrants will terminate, the Class B Warrants will become void and all rights available to a Class B Warrant holder, other than the right to receive the redemption price for all Class B Warrants then owned, will cease. Payment by Candie's of the redemption price for Class B Warrants not exercised prior to the redemption date will be made upon presentation and surrender of the certificates representing such Warrants to the Warrant Agent, Continental Stock Transfer & Trust Co., on or after the redemption date.

Candie's Inc. designs, markets, imports and distributes a variety of moderately priced athletic, fashion and leisure footwear under its Candie's and certain other trademarks and as licensee of the BONGO(TM) brand name, as well as through's its Bright Star men's division.

This release contains forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those projected. Potential risks and uncertainties include such factors as market acceptance of the company's products, trends in consumer preferences and spending, the competitive pricing environment, the success of planned advertising, marketing and promotional campaigns, the costs associated with the sourcing and manufacture of the company's products, and other risks identified in documents filed by the company with the Securities and Exchange Commission.

This release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there by any sale of the securities of the company in any state in which such offer, solicitation or sale would be unlawful. -0-

                    Candie's Inc. and Subsidiaries
               Consolidated Statements of Income Data

                         Year Ended           4th Quarter Ended
                          Jan. 31,                 Jan. 31,
                      1997         1996        1997       1996

Net revenues       $45,005,416 $37,914,127  $12,742,870 $7,720,800
Cost of goods sold  35,149,271  27,427,508    9,354,962  5,558,600
 Gross profit        9,856,145  10,486,619    3,387,908  2,162,200
Operating expenses   8,890,173   8,429,143    2,789,743  2,159,982
Operating income       965,972   2,057,476      598,165      2,218

Other deductions:
Other expense           75,000     113,000      125,000          0
Interest expense       755,657     727,210      186,123     99,131
Income before (credit)
 provision for taxes   135,315   1,217,266      287,042    (96,913)
Income tax (credit)
 provision          (1,010,000)    163,310   (1,010,000)    30,699
Net income          $1,145,315  $1,053,956   $1,297,042  ($127,612)

Earnings per share:
Net income               $0.13       $0.12        $0.13     ($0.01)
Weighted Avg. Shares
 Outstanding         9,142,598   8,725,888    9,640,000  8,745,738

CONTACT: Candie's Inc., Purchase

Gary Klein, 914/694-8600

or

Kekst and Company, New York

Dawn Dover/Caroline Gentile

212/593-2655