Maxwell Shoe Company Board of Directors Determines Jones's Revised Unsolicited Offer is Financially Inadequate

Business Wire, June 7, 2004

Business Editors

HYDE PARK, Mass.--(BUSINESS WIRE)--June 7, 2004

Maxwell Shoe Company Inc.(NASDAQ:MAXS):

Board Expects To Meet With Jones To Explore Whether Jones

Is Prepared To Recognize Full Value Of Maxwell Shoe Company

Maxwell Shoe Company Inc. (NASDAQ: MAXS) announced today that its Board of Directors has unanimously determined that Jones Apparel Group, Inc.'s (NYSE: JNY) revised unsolicited tender offer for all of the outstanding shares of Maxwell Shoe Company common stock for $22.50 per share in cash is financially inadequate and not in the best interests of Maxwell Shoe Company's stockholders. Accordingly, the Maxwell Shoe Company Board of Directors recommends that its stockholders reject Jones's revised offer and not tender their shares.

"At $22.50 per share, Jones's revised offer still fails to provide our stockholders with the value they deserve. And as we've said before, this is all about stockholder value," said Mark Cocozza, Maxwell Shoe Company's Chairman and Chief Executive Officer.

"Fiscal 2003 was the best sales and earnings year in our Company's history, and based on the first two quarters of fiscal 2004, we are on track to surpass even that superior performance. All of Maxwell Shoe Company's brands are being well received by retailers. We have industry leading merchandising and design expertise, an ability to target all channels of distribution, and a strong capital position. By leveraging these strengths, I am confident that we can create value for our stockholders in excess of Jones's revised offer. We have consistently delivered on our promises in the past, and we will continue to do so in the future," continued Mr. Cocozza.

In reaching its recommendation that stockholders reject Jones's revised offer, Maxwell Shoe Company's Board of Directors considered among other things, that:

-- Maxwell Shoe Company's independent financial advisors, Lehman

Brothers Inc., issued an opinion stating that, as of June 6,

2004, and subject to the qualifications and limitations set

forth in the written opinion, Jones's revised offer is

inadequate to Maxwell Shoe Company's stockholders from a

financial point of view;

-- Jones's revised offer undervalues Maxwell Shoe Company based

on its business, financial condition and performance, its

unique market position and business prospects and continued

market leadership, the strength and diversity of the Company's

portfolio of brands, backlog of new business and significant

future growth opportunities;

-- Maxwell Shoe Company's Board of Directors and senior

leadership team believe that they can create stockholder value

in excess of Jones's revised offer through the continued

execution of its current strategy;

-- Since February 25, 2004, when Jones first publicly announced

its proposal to acquire Maxwell Shoe Company, Maxwell Shoe

Company has twice increased its net sales and earnings

expectations for fiscal 2004. On May 20, 2004, Maxwell Shoe

Company announced that it expects fiscal 2004 net sales to be

in the range of $255 million to $260 million and earnings per

share to be in the range of $1.21 to $1.25, excluding costs

related to Jones's unsolicited tender offer. Based on the

Company's unprecedented level of backlog and 18-quarter track

record of meeting or beating expectations, Maxwell Shoe

Company is confident that it can continue to achieve its

goals; and

-- Jones's revised offer does not adequately compensate Maxwell

Shoe Company stockholders for transferring control of Maxwell

Shoe Company to Jones.

The Maxwell Shoe Company Board stated that, consistent with its commitment to enhance stockholder value, it expects to meet with Jones to explore whether Jones is prepared to increase its revised offer to a level that fully reflects the value of Maxwell Shoe Company. However, Maxwell Shoe Company's Board believes that the Company's full value is in excess of the additional "couple of pennies" by which Jones, during its May 26, 2004 conference call, said it might be willing to increase its $22.50 offer. There can be no assurance that any discussions would lead to an agreement or transaction.

Mr. Cocozza concluded, "Our Board and management team have always been committed to enhancing stockholder value. We have an outstanding record of value creation and are poised for continued growth. We welcome the opportunity to meet with Jones and demonstrate the value inherent in our Company. However, if we are unable to reach agreement with Jones on price, we will continue enhancing stockholder value through all appropriate means, which would potentially include stock repurchases or an extraordinary dividend. We will also continue to seek additional brands to license and otherwise act responsibly to protect the interests of our stockholders and ensure that they receive full value for their investment."

Maxwell Shoe Company continues to urge stockholders to discard any gold consent cards they receive from Jones and SIGN, DATE and RETURN the Company's BLUE consent revocation cards today.

Lehman Brothers Inc. is serving as financial advisor to Maxwell Shoe Company and Gibson, Dunn & Crutcher LLP is serving as legal counsel.