Dan River Inc. Responds to Kmart Corporation Filing.

Business Editors

DANVILLE, Va.--(BUSINESS WIRE)--Jan. 23, 2002

In connection with the news that Kmart Corporation is seeking protection under applicable bankruptcy laws, Dan River Inc. (NYSE:DRF) announced today that in early January it entered into an agreement with a third party which it expects will significantly mitigate the impact of the Kmart bankruptcy filing on the Company's results of operations and financial condition.

Due to the filing, Dan River plans to increase its bad debt reserve for its fourth fiscal quarter of 2001; however, the Company does not expect the Kmart filing to have a material adverse effect on its ability to successfully implement its current business plan.

Joseph L. Lanier, Jr., Dan River's Chairman and Chief Executive Officer, commented, "While we certainly regret that Kmart was required to seek Chapter 11 protection, we continue to view our partnership as strong and viable and look forward to a mutually successful relationship for many years to come. We expect to resume shipments to Kmart in due course."

Dan River Inc. is a leading manufacturer and marketer of textile products for the home fashions, apparel fabrics and industrial textiles markets. The company designs, manufactures and markets a coordinated line of value-added home fashions products consisting of bedroom furnishings such as comforters, sheets, pillowcases, shams, bed skirts, decorative pillows, and draperies for the adult, juvenile, and institutional markets. Dan River also manufactures and markets a broad range of high quality woven cotton and cotton blend fabrics for apparel. Additionally, Dan River manufactures and markets specialty engineered textile products used in making high-pressure hoses and other industrial products.

Note: This press release contains forward-looking statements under applicable securities laws. We believe our forward-looking statements are reasonable; however, undue reliance should not be placed on such statements, which are based on current expectations. For example, our inability, for any reason, to enforce in whole or in part the third party contractual arrangement referred to herein could have a material adverse effect on our financial condition and results of operations. Our financial condition and results of operations could also be materially and adversely affected by numerous other market and industry factors, many of which are outside our control. Risks generally associated with our business are detailed in our Current Report on Form 8-K filed with the SEC on July 20, 1998.