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D.A. KELLY'S EMERGES VICTORIOUS FROM SHORT CHAPTER 11

 CARTHAGE, N.C., Dec. 23 /PRNewswire/ -- D.A. Kelly's, Inc., a women's clothing chain headquartered in Carthage, N.C., has completed its Chapter 11 reorganization well ahead of schedule. Improved sales, downsizing and reduced expenses have been credited with the rapid turnaround in the company's profitability.
 D.A. Kelly's filed for Chapter 11 on Feb. 3, 1992, due to the weak economy and poor performance at some of the chain's 36 stores. Its first step, in March, was to reduce its operations to a solid core of 22 stores in North Carolina, South Carolina, and Virginia.
 The chain successfully reduced expenses by more than one-third and has enjoyed double-digit sales increases in the remaining stores over the last two quarters, compared to 1991 sales during the same period. Simultaneously, net profits have dramatically increased over the period, permitting operations to be totally funded by internally-generated revenues.
 The company also operated profitably throughout the bankruptcy period.
 "We've been very fortunate to benefit from the success of the last six months," said Lee Quinn, vice president, operations. "We can attribute our turnaround to the sales produced in each of our individual stores."
 The approved plan of reorganization for D.A. Kelly's allows for repayment of its unsecured debt over a five-year period while its restructured debt is continued with its major lender, Branch Banking & Trust Company.
 "Our company is fully confident that the remaining 22 D.A. Kelly's stores in three states will represent the most profitable and successful organization the company has ever known," Kelly, CEO said. "We believe the unexpected speed of our return to stability is strong evidence of the essential strengths of our core business."
 D.A. Kelly's, named after its founder and president, D. Archie Kelly, began with one store in Sanford, N.C., in 1965. The company offers a broad range of contemporary clothing and accessories for women of all ages. And, is particularly noted for the coordinating fashions created by its wholly-owned private label division.
 -0- 12/23/92
 /CONTACT: Lee Quinn, V.P. of Operations, D.A. Kelly's, Inc., 919-947-2541/


CO: D.A. Kelly's, Inc. ST: North Carolina IN: REA SU:

SB-MM -- CH005 -- 9650 12/23/92 15:20 EST
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Publication:PR Newswire
Date:Dec 23, 1992
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