Cygne Designs, Inc. Announces Second Quarter and First Six Months 2002 Results.

Business Editors

NEW YORK--(BUSINESS WIRE)--Sept. 17, 2002

Cygne Designs, Inc. (OTC BB: CYDS.OB) today announced results of operations for the second quarter and first six months ended August 3, 2002.

Net sales for the second quarter ended August 3, 2002 were $6,918,000, a decrease of $2,312,000, or 25%, from $9,230,000 in the comparable prior period. Net sales for the first six months of 2002 were $14,017,000, a decrease of $5,443,000 or 28% from $19,460,000 in the first six months of 2001.

Net sales from the Americas and Far East for the second quarter of 2002 were $6,212,000, an increase of $153,000 or 3% from $6,059,000 in the second quarter of 2001. The increase in sales for the second quarter was attributed to an increase in sales to Limited Brands of $1,016,000 offset by a decrease in sales primarily to Dillard's of $834,000. Limited Brands accounted for 99% of the Americas and Far East net sales for the second quarter of 2002 compared to 86% in the comparable period in 2001. Net sales from the Americas and Far East for the first six months of 2002 were $11,419,000, a decrease of $4,870,000 or 30% from $16,289,000 in the first six months of 2001. The decrease in sales for the first six months was caused by a decrease in sales primarily to Dillard's of $4,027,00 and Limited Brands of $606,000.

Net sales from the Middle East for the second quarter and first six months of 2002 were $706,000 and $2,598,000 respectively, compared to $3,171,000 in the second quarter and first six months of 2001. The Middle East Knit business was sold in June 2002.

Net loss for the second quarter ended August 3, 2002 was $207,000 or $0.02 on a basic and dilutive per share basis, compared to a net income of $71,000 or $0.01 on a basic and dilutive per share basis in the comparable prior period in 2001. Net income for the first six months of 2002 was $2,047,000 or $0.16 on a basic and dilutive per share basis, compared to net income of $132,000 or $0 .01 on a basic and dilutive per share basis in the comparable prior period in 2001.

On June 10, 2002, the Company entered into an agreement to sell its Middle East Knit business to the House and Garden Company D/B/A Century Knits ("CK") and Century Investment Group ("Jordan Knit disposition"). The Jordan Knit disposition consisted of certain of the assets of Prosperity Textiles Ltd. ("Prosperity"), the Company's wholly owned subsidiary in the Middle East. The purchase price was $400,000 paid at the closing plus the book value of the assets being sold, which approximated $1,400,000. On July 29, 2002, the agreement was amended whereby CK on or before April 30, 2003 will pay $433,000 with 8% interest to the Company for all assets purchased and will pay on behalf of Prosperity all its outstanding liabilities and bank debt at July 29, 2002 (in the aggregate approximately $967,000). CK assumed substantially all of the customer and vendor purchase orders. In addition, the Company has agreed not to compete with CK for Knit business in Jordan for five years in consideration of $350,000.

Cygne Designs, Inc. is a private label manufacturer of women's career and casual apparel.

Statements contained in this press release, which are not historical facts, are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. All forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those projected. Such risks and uncertainties are discussed more fully in the Company's Annual Report on Form 10-K for the year ended February 2, 2002 and the Company's other filings with the Securities and Exchange Commission.

                 CYGNE DESIGNS, INC. AND SUBSIDIARIES
            Condensed Consolidated Statements of Operations
           (Unaudited, in thousands, except per share data)


                                    Quarters Ended   Six Months Ended
                                   ----------------- -----------------
                                   August 3 August 4 August 3 August 4
                                      2002     2001     2002     2001
                                   -------- -------- -------- --------

Net sales
 Americas and Far East              $6,212   $6,059  $11,419  $16,289
 Middle East                           706    3,171    2,598    3,171
                                   -------- -------- -------- --------
                                     6,918    9,230   14,017   19,460
Cost of goods sold
 Americas and Far East               5,256    5,061   10,244   13,949
 Middle East                         1,352    2,888    4,586    2,888
                                   -------- -------- -------- --------
                                     6,608    7,949   14,830   16,837
                                   -------- -------- -------- --------
Gross profit (loss)                    310    1,281     (813)   2,623
Selling, general and administrative
 expenses                              817    1,094    1,819    2,388
Write off of other intangibles          --       --      213       --
Amortization of other intangibles       --       28       42       28
Gain on sale of business              (400)      --     (400)      --
                                   -------- -------- -------- --------
(Loss) income from operations         (107)     159   (2,487)     207
Interest income                         12        5       12       33
Interest expense                      (104)     (83)    (262)     (89)
                                   -------- -------- -------- --------
(Loss) income before provision for
 income taxes                         (199)      81   (2,737)     151
Provision (benefit) for income
 taxes                                   8       10   (4,784)      19
                                   -------- -------- -------- --------
Net (loss) income                    $(207)     $71   $2,047     $132
                                   ======== ======== ======== ========
Net (loss) income per share-basic
 and dilutive                       $(0.02)   $0.01    $0.16    $0.01
                                   ======== ======== ======== ========
Weighted average number of common
 shares outstanding-basic
 and dilutive                       12,438   12,438   12,438   12,438
                                   ======== ======== ======== ========