Warnaco Announces Initiatives Designed to Accelerate Strategic Growth and Enhance Profitability

Business Wire, Sept 18, 2007

Company to Transfer Mexican Manufacturing Operations

Plans Sale or Exit of Certain Swimwear Brands

Announces Plan to Explore Strategic Alternatives for Lejaby([R])

NEW YORK -- The Warnaco Group, Inc. (NASDAQ: WRNC) today announced a repositioning of its Swimwear Group designed to enhance the Company's future growth and profitability. Additionally, the Company announced that it will explore strategic alternatives for its Lejaby business.

Swimwear Repositioning

Consistent with its previously articulated strategy to rationalize its swimwear portfolio and implement supply chain initiatives to increase efficiencies, the Company is repositioning its Swimwear Group as follows:

* The Company has entered into a binding letter of intent to transfer its Mexican manufacturing operations to a company controlled by a local business partner. In connection with this transfer, and to ensure a smooth transition, the Company will enter into a production agreement with the new owner. Upon consummation of the transaction, all of Warnaco's swimwear manufacturing will be outsourced.

* The Company intends to sell certain of its designer swimwear brands, including Catalina([R]), Anne Cole([R]) and Cole of California([R]). Financo, Inc. has been engaged to advise the Company in connection with these sales.

* The Company intends to exit all of its private label and designer swimwear businesses (with the exception of Calvin Klein([R]) swimwear) by June 30, 2008.

* Following the completion of the repositioning, Warnaco Swimwear Group will consist of the Calvin Klein and Speedo([R])swimwear brands.

In connection with this repositioning, the Company expects to incur between $30 and $32 million in restructuring charges (of which approximately half are expected to be non-cash items) primarily related to the transfer of ownership of its swimwear manufacturing operations.

"We believe the actions announced today will enhance the productivity and profitability of Warnaco. Going forward, our portfolio will consist of compelling brands that we believe are positioned for sustainable long-term growth," said Joseph Gromek, Warnaco's President and Chief Executive Officer. "Our global Calvin Klein businesses, including more than 660 points of retail distribution, and our dominant Speedo business, offer us significant expansion opportunities. In particular, today's announcement enables us to focus on maximizing this potential. Additionally, we expect to reduce our cost base as we exit from owned manufacturing and capitalize on our international sourcing infrastructure."

Lejaby

The Company also announced that it has engaged Goldman Sachs to explore strategic alternatives for its Lejaby businesses, made up of the Lejaby, Rasurel([R]) and Elixir([R]) intimate apparel and swimwear brands.

"Lejaby is a premium French brand with a solid history in Europe," Mr. Gromek said. "However, we are investing our financial resources and management focus on those brands that we believe provide the greatest long-term growth opportunities for Warnaco."

Guidance

The Company announced that it is updating its Fiscal 2007 guidance to give effect to these actions and to take into account the continuing positive momentum in its business.

On an adjusted (non-GAAP) basis, the Company now expects revenues for Fiscal 2007 to grow 9 - 11% over comparable Fiscal 2006 levels and expects income per diluted share from continuing operations of $2.05 - $2.15 (assuming minimal pension expense).

The Company notes that, in addition to reflecting its improved performance outlook, the updated guidance is based upon the exclusion from Fiscal 2007 results of: (i) Lejaby and all private label and designer swimwear (with the exception of Calvin Klein swimwear); and (ii) restructuring expenses, both previously incurred and anticipated through year-end.

The attached Schedule A contains a reconciliation of the Company's revised estimate of net revenue growth for fiscal 2007 (based on US GAAP) to expected net revenue growth on an "as adjusted" basis (non-GAAP) and a reconciliation of the Company's projected income per diluted share from continuing operations (based on US GAAP) to projected income per diluted share from continuing operations on an "as adjusted" basis (non-GAAP).

Conference Call Information

The Company will hold a conference call and webcast scheduled for Wednesday September 19, 2007 at 9:00 a.m. ET. To participate in Warnaco's conference call, dial (877) 692-2592 approximately five to ten minutes prior to the 9:00 a.m. start time. The call will also be broadcast live over the Internet at www.warnaco.com. An online archive will be available following the call.

This press release was furnished to the SEC (www.sec.gov) and may also be accessed through the Company's internet website: www.warnaco.com.

ABOUT WARNACO

The Warnaco Group, Inc., headquartered in New York, is a leading apparel company engaged in the business of designing, 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[R], Olga[R], Lejaby[R], Body Nancy Ganz[R], Speedo[R], Anne Cole[R], Cole of California[R] and Catalina[R] as well as Chaps[R] sportswear and denim, Ocean Pacific[R] swimwear, Nautica[R] swimwear, Michael Kors[R] swimwear and Calvin Klein[R] 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.