Hampshire Group Announces Results for 2004 Year and Fourth Quarter

Business Wire, March 7, 2005

ANDERSON, S.C. -- Hampshire Group, Limited (NASDAQ: HAMP) announced today that net income from continuing operations for the year ended December 31, 2004, was $13,725,000, or $3.33 per diluted share compared with $11,423,000, or $2.43 per diluted share, in 2003. Net income for the year ended December 31, 2004, was $13,725,000 or $3.33 per diluted share compared with $5,627,000, or $1.20 per diluted share, for the prior year. The Company recorded a net after-tax loss of $5,796,000 from the sale of its investment subsidiary in 2003. Net sales for the year ended December 31, 2004 were $301,999,000, compared with net sales of $292,651,000 for the prior year.

In the fourth quarter of 2004, net sales were $105,246,000 compared with $112,487,000 in the prior year, and net income from continuing operations was $8,332,000, or $2.02 per diluted share, compared with $6,795,000, or $1.60 per diluted share for the fourth quarter 2003. Sales in the fourth quarter of 2004, as compared with the fourth quarter of 2003, were adversely affected by one less week in the Company's fiscal calendar than in the prior year.

The Company reported that net income from continuing operations in 2004 benefited from improved profits in the men's sweater and women's related separates businesses. The women's sweater business continued to be adversely affected by very competitive market conditions, but management believes it has maintained market share.

Commenting on results, Ludwig Kuttner, Chairman and Chief Executive Officer of Hampshire Group said, "We are pleased to be reporting the second-best year in our history, as we pass the milestone of $300 million in sales. Part of our strategy has been to reduce risk by diversifying our product lines, and this diversification worked in our favor in 2004, as the improvement in the men's sweater and women's related separates businesses provided the improvement in net income."

Hampshire Group, Limited is a diversified apparel company, believed to be the largest supplier of sweaters in North America and a leading supplier of related separates.

"Cautionary Disclosure Regarding Forward-Looking Statements"

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company's current views with respect to future events. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof. The Company undertakes no obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrences of unanticipated events. Readers are also urged to carefully review and consider the various disclosures made by the Company in its Form 10-K and other Securities and Exchange Commission filings which attempt to advise interested parties of the factors which affect the Company's business.

HAMPSHIRE GROUP, LIMITED ("HAMP")
COMPARATIVE SUMMARY OF EARNINGS
(In thousands, except per share data)


                                           December 31,   December 31,
YEAR ENDED                                   2004            2003
----------------------------------------------------------------------
Net sales                                   $301,999        $292,651
                                            ========        ========
Net income from continuing operations        $13,725         $11,423
                                            ========        ========
Net income                                   $13,725         $ 5,627
                                            ========        ========
Net income per share from   Basic              $3.37           $2.50
 continuing operations:                     ========        ========
                            Diluted            $3.33           $2.43
                                            ========        ========

Net income                  Basic              $3.37           $1.23
                                            ========        ========
                            Diluted            $3.33           $1.20
                                            ========        ========
Weighted average number
 of shares outstanding:     Basic              4,074           4,573
                                            ========        ========
                            Diluted            4,126           4,696
                                            ========        ========


                                           December 31,   December 31,
QUARTER ENDED                                2004            2003
----------------------------------------------------------------------
Net sales                                   $105,246        $112,487
                                            ========        ========
Net income from continuing operations         $8,332          $6,795
                                            ========        ========
Net income                                    $8,332          $6,342
                                            ========        ========
Net income per share from   Basic              $2.04           $1.64
 continuing operations:                     ========        ========
                            Diluted            $2.02           $1.60
                                            ========        ========
Net income                  Basic              $2.04           $1.53
                                            ========        ========
                            Diluted            $2.02           $1.49
                                            ========        ========
Weighted average number
 of shares outstanding:     Basic              4,081           4,146
                                            ========        ========
                            Diluted            4,121           4,249
                                            ========        ========