Lamonts' Year-End Results Show Solid Growth in Sales, EBITDA; Operating Income Increases to $0.6 Million From A Loss of $5.1 Million.

KIRKLAND, Wash.--(BUSINESS WIRE)--April 30, 1999--

Lamonts Apparel Inc. (OTC BB:LMNT) announced financial results for fiscal 1998 ended Jan. 30, 1999, with total sales of $209.6 million, the company's highest sales in the past four years.

For the fiscal year, the company reported a net loss of $4.5 million, or $0.50 per share, compared with net income of $122.7 million, or $6.86 per diluted share, on revenues of $201.6 million for the same period last year.

Excluding the effects of $70.5 million fresh-start revaluation and a $69.2 million extraordinary gain on debt discharge in fiscal 1997, Lamonts' performance in fiscal 1998 resulted in a $12.5 million improvement in net income over fiscal 1997.

Lamonts also achieved an increase of more than 50 percent in earnings before interest, tax, depreciation, amortization and other noncash adjustments (EBITDA) with $10.6 million in EBITDA in fiscal 1998 compared with $7.0 million in fiscal 1997. Operating income also improved in fiscal 1998 to $0.6 million compared with a loss of $5.1 million last year.

Continuing attention to cost containment contributed to a 6.6 percent reduction in fiscal 1998 operating and administrative expense to $63.3 million, or 30.2 percent of sales, compared with $67.8 million, or 33.6 percent of sales, last year. Detailed financial information can be obtained in the company's Form 10-K filed today with the Securities and Exchange Commission.

"We made significant progress toward profitability this year due to a strong focus on merchandising execution which resulted in improved merchandise quality, assortments and pricing," stated Alan R. Schlesinger, Lamonts' chairman, chief executive officer and president. "Sales in our Alaska markets proved especially dynamic and contributed to same-store sales increases in every quarter.

"We plan to continue on the road to profitability in fiscal 1999 by achieving steady top line growth and expense containment. Our new promotional theme, 'Brands You Trust, Savings You Love,' underscores Lamonts' emphasis on value, quality, selection and price which our customers increasingly appreciate. We will continue to refine our merchandising mix and pursue new growth opportunities in home accessories, misses sportswear, juniors and young men's."

Schlesinger further stated that customers would find a more inviting shopping experience in the coming year as a result of store remodels, visual updates and new fixture programs.

In partnership with mall owners, Lamonts plans to invest nearly $4 million in store upgrades in fiscal 1999, including the construction of a replacement store in Pocatello, Idaho, and an extensive remodel of the Factoria, Wash., store, a key store in the Seattle metropolitan market.

Lamonts also plans to invest $4.5 million in state-of-the-art point-of-sale (POS) systems destined for all stores. The new systems, which are scheduled for installation throughout the second and third quarters, will reduce customer transaction time and improve data collection for more targeted merchandising and marketing.

Lamonts Apparel operates 38 family apparel stores in Alaska, Idaho, Oregon, Utah and Washington. The company is well known in the Northwest as a retailer of such brand name apparel as Adidas, Alfred Dunner, Byer of California, Bugle Boy, Lee, Levi, Liz Claiborne, Mikasa, Nike, Ocean Pacific, OshKosh, Rafaella, Sag Harbor and Woolrich.

Lamonts has headquarters in Kirkland in the greater Seattle area and employs approximately 1,500 people.

Statements in this news release containing the words "believes," "anticipates," "expects," and words of similar import, and any other statements which may be construed as a prediction of future performance or events, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of the company, or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such factors include, among others, (i) national and local general economic and market conditions, (ii) demographic changes, (iii) liability and other claims asserted against the company, (iv) competition, (v) the loss of a significant number of customers or suppliers, (vi) fluctuations in operating results, (vii) changes in business strategy or development plans, (viii) business disruptions, (ix) the ability to attract and retain qualified personnel, (x) ownership of common stock, (xi) volatility of stock price, (xii) delays on the part of the company or suppliers or other third parties in achieving year 2000 compliance, and (xiii) the additional risk factors identified in the company's Annual Report on Form 10-K for the fiscal year ended Jan. 30, 1999, and the company's Registration Statement on Form S-1 (No. 333-44311) initially filed with the Securities and Exchange Commission on Jan. 15, 1998 (as amended from time to time), and those described from time to time in the company's other filings with the SEC, news releases and other communications. The company disclaims any obligations to update any such factors or to announce publicly the result of any revisions to any of the forward-looking statements contained or incorporated by reference herein to reflect future events or developments.

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                         LAMONTS APPAREL INC.
                 Summary Statements of Operations Data
             (dollars in thousands, except per share data)

                                       52 Weeks Ended
                               Jan. 30, 1999     Jan. 31, 1998

Revenues                         $209,585           $201,623
Cost of merchandise sold          137,651            131,700
    Gross profit                   71,934             69,923

Operating and administrative
 expenses                          63,343             67,844
Depreciation and amortization       8,024              7,141
    Operating costs                71,367             74,985

Income (loss) from operations
 before other income (expense),
 reorganization expenses,
 fresh-start revaluation and
 extraordinary item                   567             (5,062)

Other income (expense):
    Interest expense               (5,042)            (5,900)
    Other income (expense)             14                  8

Loss from operations before
 reorganization expenses,
 fresh-start revaluation and
 extraordinary item                (4,461)           (10,954)
Reorganization expenses                --             (5,995)
Fresh-start revaluation                --             70,495

(Loss) income before
 extraordinary item                (4,461)            53,546

Extraordinary item --
 gain on debt discharge                --             69,158

Net (loss) income                 ($4,461)          $122,704

Basic and Diluted Income
 (Loss) per Common Share
    (Loss) income from
      operations before
      extraordinary item           ($0.50)             $3.00
    Extraordinary item --
      gain on debt discharge           --              $3.86
    Net (loss) income              ($0.50)             $6.86

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                         LAMONTS APPAREL INC.
                      Summary Balance Sheet Data
             (dollars in thousands, except per share data)

                                          Jan. 30,          Jan. 31,
                                            1999              1998
Current Assets:
    Cash                                  $ 1,594           $ 1,301
    Receivables                             2,124             1,703
    Inventories                            42,411            38,617
    Prepaid expenses and other              1,412             1,500
    Restricted cash and deposits               21             1,543
      Total current assets                 47,562            44,664

Property and equipment -- net of
 accumulated depreciation and
 amortization of $5,590 and $0,
 respectively                              28,896            32,154
Leasehold interests                         7,134             8,749
Excess reorganization value                 8,832             9,296
Deposits                                    1,078             1,130
Other assets                                  393               899
      Total assets                        $93,895           $96,892

Current Liabilities:
    Borrowings under the Revolver         $25,396           $18,967
    Accounts payable                       17,231            15,186
    Accrued payroll and related costs       2,615             3,106
    Accrued taxes                             967               865
    Accrued interest                          419             1,007
    Accrued reorganization expenses            15             2,497
    Other accrued expenses                  5,707             6,228
    Current maturities of long-term debt   10,228               403
    Current maturities of obligations
        under capital leases                1,646             1,454
      Total current liabilities            64,224            49,713

Long-term debt, net of current maturities     265            10,536
Obligations under capital leases,
  net of current maturities                12,225            13,835
Other                                       2,579             2,852
      Total liabilities                    79,293            76,936

Stockholders' equity:
    Preferred stock, $0.01 par value,
      10 million shares authorized;
      no shares issued and outstanding         --                --
    Common stock, $0.01 par value;
      40 million authorized;
        Class A: 9 million shares
          issued and outstanding           16,926            16,926
        Class B: 10 shares issued
          and outstanding                       1                 1
    Warrants -- contributed capital         3,029             3,029
    Accumulated deficit                    (4,461)               --
    Accumulated other comprehensive loss     (893)               --
      Total stockholders' equity           14,602            19,956
      Total liabilities and
        stockholders' equity              $93,895           $96,892