Cygne Designs, Inc. announces first quarter 1997 results and termination of Kenzo license agreements.

NEW YORK--(BUSINESS WIRE)--June 6, 1997--Cygne Designs, Inc. (Nasdaq:CYDS) today announced results of operations for the first quarter ended May 3, 1997.

Net sales for the first quarter of 1997 decreased to $7.7 million from $83.8 million for the comparable period in 1996. The $76.1 million decrease in net sales for the first quarter of 1997 was primarily attributable to a decrease in sales to Ann Taylor of $60.6 million as a result of the sale to Ann Taylor in September 1996 of the Company's Ann Taylor sourcing operations (the "Ann Taylor Disposition"), as well as to discontinued customers and product lines which generated sales of $9.5 million in the first quarter of 1996, offset in part by increases in sales to other customers. In addition, sales to those divisions of The Limited, Inc. with which the Company continues to do business decreased by $7.0 million. The Company anticipates that sales to The Limited, Inc. will continue to decrease. The Company had a net loss of $4.6 million, or $0.37 on a per share basis, in the first quarter of 1997 compared to net income of $31,000, or break-even on a per share basis, in the first quarter of 1996.

Since the closing of the Ann Taylor Disposition the Company has not had, and does not anticipate that it will have, sales to Ann Taylor. If the Ann Taylor Disposition had been consummated on February 4, 1996 (and excluding the gain on the Ann Taylor Disposition and on the subsequent sale of the Ann Taylor common stock acquired in connection therewith), the Company would have had pro forma net sales of $23.2 million and pro forma loss from operations of $2.2 million for the first quarter of 1996, and pro forma net loss and pro forma net loss per share for the first quarter of 1996 would have been $1.9 million and $0.15, respectively.

The Company also announced that the license agreements entered into last summer with the Kenzo Group for the manufacture and distribution in the United States, Canada and Mexico of the Kenzo Studio and Kenzo Jeans ready-to-wear apparel lines had been terminated by mutual agreement. The Company noted that the Kenzo Group has decided, for strategic reasons, to concentrate its efforts in the North American market on its designer line Kenzo Paris, primarily through its own Kenzo stores. The Company stated that in connection with the termination the Kenzo Group would return the $400,000 in pre-paid minimum royalty payments made on the signing of the license agreements and pay Cygne for certain raw materials related to the manufacture of Kenzo products.

As previously announced, the Company anticipates that it will have a net loss for 1997. The extent of the net loss will depend, among other things, on the amount of sales and related gross profit from sales to The Limited, Inc. The Company's loss in the second quarter ending August 2, 1997 will also be affected by severance and other costs associated with the termination of the Kenzo licenses. The Company is continuing to review its business operations and expects to continue to incur additional costs in the future associated with the further restructuring or downsizing of its operations.

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 1, 1997 and the Company's other filings with the Securities and Exchange Commission.

Cygne Designs, Inc. is a private label designer, merchandiser and manufacturer of woven and knit career and casual clothing for women. -0-

                        (Financial Table to Follow)


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

                                                 Quarters Ended
                                                May 3      May 4
                                                1997       1996

Net sales                                   $   7,637  $ 83,756
Cost of goods sold                              8,296    73,044
Gross (loss) profit                              (659)   10,712
Selling, general and
 administrative expenses                        3,876     9,159
Amortization of goodwill                           91        91
(Loss) income from operations                  (4,626)    1,462
Other income                                      --       (388)
Interest (income) expense, net                    (95)      935
(Loss) income before provision
 for income taxes and minority interests       (4,531)      915
Provision for income taxes                         51       436
(Loss) income before minority interests        (4,582)      479
Income attributable to minority interests         --        448
Net (loss) income                           $  (4,582) $     31
Net loss per share                          $   (0.37) $   0.00
Weighted average number of common
 and common equivalent
 shares outstanding                            12,438    12,438

CONTACT: CYGNE DESIGNS, INC

Roy E. Green

Chief Financial Officer

212-354-6474

or

IR CONTACT:

David Walke, Howard Zar,

Shannon Moody

Press: Michael McMullan

Morgen-Walke Associates

212-850-5600