Aris Industries Announces Major Licensing Deal and Capital Infusion

Business Wire, March 8, 2001

Business Editors

NEW YORK--(BUSINESS WIRE)--March 8, 2001

Aris Industries, Inc. (OTC:BB-AISI) today announced that it has entered into a Trademark License with Grupo Xtra of New York, Inc. ("Grupo"), signaling a fundamental change in the company's business from being a designer, manufacturer and seller of apparel to being a licensor of trademark rights.

Pursuant to the terms of the Grupo License:

Grupo has received the exclusive right, for an initial term of 5 years (the "Initial Term"), renewable by Grupo at its option for four additional 5 year periods, to manufacture, market and distribute at wholesale to retailers XOXO womens jeanswear and sportswear, Fragile womens jeanswear and sportswear, Members Only sportswear and outerwear, and, subject to Aris' rights as a license with respect thereto, Baby Phat apparel and Brooks Brothers Golf Apparel (the "Licensed Products") in Puerto Rico, the U.S. Caribbean Islands and Israel.

Grupo is to be solely responsible for manufacturing, marketing, and distributing the Licensed Products sold thereunder, subject to Aris' rights, as licensor or sublicensor, to approve all designs and otherwise act to maintain the integrity of the licensed trademarks; as a result, key members of Aris' senior management team, including Arnold H. Simon, the Chief Executive Officer of Aris, Steven Feiner, the President of Aris, Gregg Fiene, the Chief Executive Officer of XOXO Clothing Company, Incorporated, a subsidiary of Aris ("XOXO"), and Holly Fiene, XOXO's Vice President of Merchandising and Design, will continue to be actively involved in the design and marketing the Licensed Products.

Grupo is to pay Aris minimum royalties of $8.1 million, increasing 14% per year to $13.5 million.

During the period ending on July 6, 2001, Grupo is to purchase the entire closing inventory of Aris at Aris' cost (less a reserve for obsolete inventory).

Substantially all of Aris' employees, will become employees of Grupo, with Aris, retaining only approximately 15 such persons in its employ.

Substantially all of Aris' future contractual commitments, other than those relating to its residual licensing business, corporate functions, warehouse operations in New Bedford, Massachusetts, loans with CIT and the Bank of New York and retained employees, have been assumed by Grupo. Nevertheless, the company will remain liable on such contracts if Grupo does not perform its obligations.

"The transaction with Grupo Xtra represents the critical first step in the transformation of Aris' business model", said Arnold H. Simon, the Chairman and Chief Executive Officer of Aris. "Over the course of the last 18 months, we have removed a number of brands from and added a number of brands to our intellectual property portfolio. We find our new configuration to be a very attractive business model for a number of reasons, including: (I) the stable royalty stream flowing from minimum guaranteed sales, (ii) the enormous reduction in operating expenses, and (iii) the elimination of many of the risks to which the business of the company had been subject."

The Company also announced that it received $7,000,000 from the previously announced financing from a private venture capital firm in Los Angeles. Under the financing agreement, the Company is to issue an aggregate of $10,000,000 in convertible debentures, of which $7,000,000 has been issued. The debentures mature in three years, bear interest at the rate of 8.5 % per annum, payable quarterly and are convertible into shares of common stock at the rate of $.46 per share. The Company has used the proceeds to pay down a portion of its revolving credit facility. The venture capital firm has informed the Company that it intends to invest the remaining $3,000,000, but has not given the Company a time frame for such investment.

Certain information discussed in this press release may constitute forward-looking statements within the meaning of the federal securities laws. Although Aris believes that expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved including, without limitation, Grupo's performance of its obligations under the Trademark License and the venture capital firm's purchase of the balance of the Debenture. Forward-looking information is subject to certain risks, trends, and uncertainties that could cause actual results to differ materially from those projected. For a more complete description of factors which could impact Aris and the statements contained herein, reference should be made to Aris' filings with the United States Securities and Exchange Commission.