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GITANO GROUP ANNOUNCES STRATEGIC ACTIONS

 GITANO GROUP ANNOUNCES STRATEGIC ACTIONS
 NEW YORK, July 31 /PRNewswire/ -- To accelerate its operational


restructuring, the Gitano Group, Inc. (NYSE: GIT), has undertaken a number of strategic actions to refocus the company on its core wholesale apparel business, to downsize its non-core operations consistent with current market demand, to shrink its balance sheet proportionately, and to improve its liquidity and financial flexibility.
 These actions include, among other things, a reduction in current seasons' inventories, a substantial decrease in the size of its retail operations and the creation of a reserve against certain related-party receivables, the company today announced.
 Accordingly, Gitano will record two non-cash charges against second quarter earnings. One of approximately $50 million is to cover losses stemming from the inventory reductions, closure of additional stores, severance arrangements, and other expenses in connection with the continued restructuring. The other approximately $28 million charge is to cover the creation of the reserve for related-party receivables. Although the charges caused Gitano to be in default of certain covenants under its credit facilities, the company and its lenders are in discussions about amending its credit facilities.
 The company emphasized that its core business of wholesale apparel is sound. The business is well-positioned in the marketplace with a loyal retail customer base, offers a line of products with strong consumer demand, and has achieved high consumer awareness. The actions taken today will help establish this business as the foundation for a revitalized Gitano.
 As part of the accelerated restructuring process and consistent with its previously-reported plan to reduce domestic manufacturing capacity, Gitano also reported that it has given 60-day notice to the associates of its Ruleville, Miss. facility under the provisions of Federal statutes covering plant closings.
 The company stated that the closing is not indicative of the productivity or performance of associates at Ruleville, but rather is an economic necessity to help enable the company to properly positions itself for the long-term.
 Gitano is a leading supplier of branded, high quality, affordable apparel to mass merchants and discounters. Gitano's products include fashion basic clothing for women, men and children, as well as intimate apparel and accessories.
 -0- 7/31/92
 /CONTACT: Robert Siegfried or Thomas J. Davis of Kekst and Company, 212-593-2655, for Gitano/
 (GIT) CO: The Gitano Group, Inc. ST: New York IN: REA SU:


AH-KW -- NY059 -- 5845 07/31/92 19:13 EDT
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Date:Jul 31, 1992
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