FOR
IMMEDIATE RELEASE
MOVIE
STAR, INC. ELIMINATES SEWING AT VIRGINIA PLANT
AS
PRODUCTION MOVES TO LOWER COST OFFSHORE PLANTS
New York, NY – December 1, 1999 -- MOVIE STAR, INC. (ASE: MSI) today reported that production will cease at its Lebanon, Virginia plant by the end of February 2000. This action is in keeping with the Company’s previously stated goal of relocating its manufacturing to offshore contractors. The Company does not anticipate the charge for expenses related to this reorganization to be material.
The Company reported that the plant will continue to be utilized as a distribution facility where approximately 60 employees will be retained. With the elimination of the sewing operations at the Lebanon plant, the Company will have only minimal domestic production in order to accommodate small customer orders or orders with a short lead-time.
Commenting, Mel Knigin, President & CEO of Movie Star, noted, “While we recognize that the plant closing will cause a temporary dislocation for certain of the Lebanon employees, the 60 day advance notice should give many of the affected employees time to seek other employment opportunities. By the end of February 2000 the inefficiencies and slippage we began to experience in the first quarter in the continued transition of certain domestic production to offshore contractors, should be behind us. At that time, as a result of these changes and others we have made with respect to offshore operations, we expect to have a greater ability to improve gross margins in our intimate apparel business.”
MOVIE STAR, INC. produces and sells ladies sleepwear, robes,
leisurewear, loungewear, panties and daywear and also operates 28 retail outlet
stores.
Certain of the matters set forth in this press release are forward looking and involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially are the following: business conditions and growth in the industry; general economic conditions; addition or loss of significant customers; the loss of key personnel; product development; competition; foreign government regulations; fluctuations in foreign exchange rates; rising costs for raw materials and the unavailability of sources of supply; the timing of orders booked; and the risk factors listed from time to time in the Company's SEC reports.
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CONTACT: INVESTOR
RELATIONS COUNSEL:
Movie Star, Inc. -or- The Equity Group Inc.
Thomas Rende, CFO Linda
Latman (212) 836-9609
(212) 684-3400 www.theequitygroup.com