Designs, Inc. corrects and replaces previous first quarter results announcement.

NEEDHAM, Mass.--(BUSINESS WIRE)--May 20, 1996--Designs, Inc. (NASDAQ:DESI), operator of specialty retail apparel stores, today announced its results for the fiscal 1996 first quarter ended May 4, 1996. Net income for the first quarter represents a loss of ($1.1) million, or ($0.07) per share, compared to net income of $1.6 million, or $0.10 per share, in the prior year. In the prior year, the Company recognized $2.2 million or $0.08 per share of non-recurring pre-tax income related to the fiscal 1993 restructuring program. On a comparative basis, earnings per share for the first quarter, excluding this non-recurring income, was ($0.07) per share this year as compared to $0.02 per share last year.

Sales for the first quarter of fiscal 1996 were $59.3 million as compared to $57.3 million as reported in the prior year. Comparable store sales decreased 8 percent for the first quarter. Comparable stores are retail locations that are open at least a full fiscal year. Of the 155 stores that Designs, Inc. operated as of May 4, 112 were comparable stores.

"The results for this quarter reflect the lack of a strong Spring product focus and reduced customer traffic caused by an extra long winter season in the Northeast where we have our highest concentration of stores," said Joel H. Reichman, President and Chief Executive Officer of Designs, Inc. "As the Boston Traders(R) brand product lines become more predominant in our business, our current plans are to deliver eight new Boston Traders(R) brand merchandise floor sets per year. This should improve our competitiveness and ability to provide fresh, in-season products. As we develop our new Boston Traders(R) brand product, we are redefining the Boston Traders(R) brand identify with an updated logo and new store format. We expect the first of these stores to open in the first quarter of fiscal 1997."

The Company's gross margin rate, after occupancy costs, for the first quarter equaled 27.2 percent of sales, compared with 28.3 percent in the prior year. Selling, general and administrative expenses for the first quarter equaled 27.1 percent of sales, compared with 24.7 percent in the prior year. The increase was primarily attributable to the additional infrastructure expenses associated with the development of the vertically integrated Boston Traders(R) brand. This increase was partially offset by store payroll expense for the first quarter which equaled 11.3 percent of sales compared with 11.6 percent in the prior year.

During the quarter, the Company closed two "Designs" stores as their leases had expired. Current plans, barring unforeseen circumstances, are to open up to 10 joint venture stores during fiscal 1996, of which six Levi's(R) Outlet store locations have been selected.

Designs, Inc. emphasizes the power of brand-name merchandising through 156 stores in four retail formats; 47 "Designs" stores, 58 "Levi's(R) Outlet by Designs" stores and 35 "Boston Traders(R) Outlet" stores. A joint venture between subsidiaries of Designs, Inc. and Levi's Only Stores, Inc., a wholly-owned subsidiary of Levi Strauss & Co., operates 11 "Original Levi's(R) Stores" and five "Levi's(R) Outlet" stores. -0-

                                 DESIGNS, INC.
                       CONSOLIDATED STATEMENTS OF INCOME
                     (In thousands, except per share data)
                                  (Unaudited)

                     Three Months Ended        Twelve Months Ended
                    May 4,      April 29,     May 4,     April 29,
                    1996           1995        1996          1995

Sales           $  59,336      $  57,337   $  302,932    $  274,287
Cost of goods sold
 including
 occupancy         43,179         41,140      213,895       187,173

Gross profit       16,157         16,197       89,037        87,114

Expenses:
 Selling,
  general and
  administrative   16,060         14,176       70,991        55,802
 Restructuring
  charges              --         (2,200)          --        (5,400)
 Depreciation and
   amortization     2,484          1,864        7,253         7,112
 Total expenses    18,544         13,840       78,244        57,514

Operating income   (2,387)         2,357       10,793        29,600

Interest expense       44             22          218           110
Interest income       318            471        1,438         1,546

Income before
 minority interest
 and income taxes  (2,113)         2,806       12,013        31,036

Less Minority
 Interest            (145)            91          140            91

Income before income
 taxes              (1,968)        2,715        11,873        30,945

Provision for income
 taxes                (823)        1,118         4,819        12,545

Net income         $(1,145)      $ 1,597      $  7,054      $ 18,400

Net income per
 common and
 common equivalent
 share            $  (0.07)      $  0.10      $   0.45      $   1.16

Weighted average
 common and common
 equivalent shares
 outstanding        15,812         15,756       15,778        15,867

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                               Designs, Inc.
                        Consolidated Balance Sheets
             May 4, 1996 and April 29, 1995 and February 3, 1996
                        (In thousands - Unaudited)

                                      May 4,    April 29,   Feb. 3,
                                      1996         1995       1996
ASSETS
Cash and Investments              $ 27,100     $ 31,333   $ 25,969
Inventories                         64,752       60,033     58,008
Property and equipment, net         39,281       28,863     36,083
Deferred income taxes                3,620        3,199      3,620
Intangible assets                    2,783           --      2,901
Other assets                         7,096        3,807      6,068
  Total assets                    $144,632     $127,235   $132,649

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable and
 other liabilities                $ 32,458     $ 24,895   $ 19,117
Current portion of long-term debt    1,000           --        500
Long-term notes payable                 --           --        500
Minority interest                    6,323        4,799      6,447
Stockholders' equity               104,851       97,541    106,085
  Total liabilities and
  stockholders' equity            $144,632     $127,235   $132,649

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CONTACT: Shareholder Information Line

1-888-DESI-333

or

Lynn M. Harrison, Director of Investor Relations

Designs, Inc.

[phone]