The Warnaco Group, Inc. has announced that it has entered into an agreement to sell its Lejaby business to Palmers Textil AG for approximately €32.5 million (approximately $47 million) in cash and €12.5 million (approximately $18 million) in an interest free note due December 31, 2013. Terms of the transaction include a customary working capital adjustment and the provision of temporary transition services to Palmers Textil AG. The Company notes that the sale of Lejaby is subject to customary closing conditions and expects the sale to be concluded during the first quarter of fiscal 2008.

Commenting on the transaction, Helen McCluskey, Warnaco’s Group President of Intimate Apparel and Swimwear stated, “We would like to thank the Lejaby team for its contributions over the years. Under Palmer's ownership, Lejaby will continue to be operated from Lyon, providing continuity to its core employees. In the future, we believe that, under Palmer’s ownership, Lejaby will benefit from new opportunities. Today’s announcement completes the strategic realignment we announced in November, including the Company’s exit from all owned manufacturing.

We believe Warnaco is now well positioned to focus our efforts on our brands and businesses with the greatest long-term potential for Warnaco and its stakeholders.”

“We are thrilled by the acquisition of the Lejaby business. We believe adding Lejaby, an iconic and well established brand, to our portfolio will surely enhance our future growth opportunities,” commented Thomas Weber, CEO of Palmers Textil AG.

ABOUT WARNACO

The Warnaco Group, Inc., headquartered in New York, is a leading apparel company engaged in the business of designing, sourcing, marketing and selling intimate apparel, menswear, jeanswear, swimwear, men's and women's sportswear and accessories under such owned and licensed brands as Warner's®, Olga®, Body Nancy Ganz®, and Speedo®, as well as Chaps® sportswear and denim, and Calvin Klein® men's and women's underwear, men’s and women’s bridge apparel and accessories, men's and women's jeans and jeans accessories, junior women's and children's jeans and men’s and women's swimwear.

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