Warnaco to Restate Financial Statements for Fiscal 2005 and the First Fiscal Quarter of 2006; Announces Preliminary Results for Second Fiscal Quarter of 2006

The Warnaco Group, Inc. (NASDAQ: WRNC) announced todaythat the Audit Committee of the Company's Board of Directors hasconcluded that the Company will restate its previously reportedfinancial statements for its fiscal year ended December 31, 2005 andfirst fiscal quarter ended April 1, 2006. In addition, Warnacoannounced that it will hold its second quarter fiscal 2006 conferencecall on Monday, August 14, 2006. Preliminary results for the secondquarter of 2006 and additional information about the conference callare provided below under "Second Quarter Information."

The restatements are required as a result of certainirregularities and errors discovered by the Company during theCompany's second quarter closing review. The irregularities primarilyrelate to the accounting for certain returns and vendor allowances atits Chaps(R) menswear division. These matters were reported to theCompany's Audit Committee, which engaged outside counsel, who in turnretained independent forensic accountants, to investigate and reportto the Audit Committee. Based on information obtained in thatinvestigation, and also to correct for an error which resulted fromthe implementation of its new systems infrastructure at its SwimwearGroup in the first quarter of fiscal 2006, and certain immaterialerrors, the Audit Committee has accepted management's recommendationthat the Company restate its financial statements.

The Company intends to file an amended annual report for thefiscal year ended December 31, 2005 and an amended quarterly reportfor the quarter ended April 1, 2006 with the Securities and ExchangeCommission (the "SEC"). Until these restated financial statements arefiled with the SEC, neither the Company's consolidated financialstatements for the fiscal year ended December 31, 2005 and the relatedreports of the Company's independent registered public accountingfirm, nor the Company's consolidated financial statements for thefirst fiscal quarter ended April 1, 2006, should be relied upon. TheCompany has discussed the matters relating to the accountingirregularities and errors with Deloitte & Touche LLP, the Company'sindependent registered public accounting firm and is filing a Form 8-Kwith the SEC in connection with its restatement decision.

The Company expects that the effect of the restatement for thefiscal year ended December 31, 2005 will be to reduce reported netincome from continuing operations per diluted share from $1.12 tobetween approximately $1.05 and $1.07 per diluted share, and for thefirst fiscal quarter ended April 1, 2006 to reduce reported net incomeper diluted share from $0.34 to between approximately $0.28 and $0.30per diluted share.

Warnaco believes that the matters causing the restatements havebeen identified and that management has taken appropriate correctiveaction. However, because the Audit Committee and its advisors have notfully completed their investigation, the Company's analysis of therestatement adjustments has not been finalized. Accordingly, theestimated restatement amounts disclosed above remain preliminary,unaudited and subject to adjustment, possibly by amounts that could bematerial individually or in the aggregate. In addition, it is possiblethat the Company may identify additional new issues which could alsoimpact its previously issued financial statements and the scope of therestatements described in this press release. In the event that newissues requiring restatement arise, it is possible that suchadditional adjustments could be material individually or in theaggregate.

Additionally, in connection with the Company's investigation,three employees in the Chaps(R) menswear division, who are not"Executive Officers" as defined by the rules of the SEC, have eitherresigned or been terminated.

Joe Gromek, Warnaco's President and Chief Executive Officer, said,"Warnaco is committed to maintaining an internal culture and externalreputation for practicing the highest standards in all of our businessaffairs and has zero tolerance for violations of our Code of BusinessConduct and Corporate Ethics. We are deeply disappointed by the recentevents at our Chaps menswear division and believe, based oninformation provided to date by the outside counsel to the AuditCommittee and forensic accountants, that the inappropriate behaviorwas confined to that division. We remain confident in the potential ofour brands and the prospects for our businesses."

The Company has evaluated the impact of the restatements of thepreviously issued financial statements on the Company's assessments ofthe effectiveness of its internal control over financial reporting asof the applicable periods, and concluded that material weaknessesexisted in the Company's internal control over financial reporting forthe second and first fiscal quarters of 2006 and the fiscal year endedDecember 31, 2005. Such assessment will be included in the Company'squarterly report for the quarter ended July 1, 2006, which the Companyexpects to file with the SEC on August 15, 2006, and in amendments tothe Company's annual report for the fiscal year ended December 31,2005 and quarterly report for the quarter ended April 1, 2006, whichthe Company expects to file with the SEC shortly thereafter. Amaterial weakness, as defined by the Public Company AccountingOversight Board, is a control deficiency, or combination of controldeficiencies, that results in more than a remote likelihood that amaterial misstatement of the annual or interim financial statementswill not be prevented or detected. Based on this definition,restatement of financial statements in prior filings with the SEC is astrong indicator of the existence of a "material weakness" in thedesign or operation of internal control over financial reporting.

In connection with the restatements, the Company is seeking awaiver of certain technical defaults under its credit agreement.Although no assurances can be given, based on conversations with theagent for the lenders, the Company is confident that it will obtainthe waiver in a timely fashion.

Second Quarter Information

Warnaco announced it will release results for the second fiscalquarter ended July 1, 2006 after the market closes on Monday, August14, 2006. The Company expects, based on information currentlyavailable, that earnings for the second quarter of fiscal 2006 will bein the range of approximately $0.06 to $0.08 per diluted share. TheCompany notes that these results include the operations of the CalvinKlein Jeans and related businesses in Europe and Asia (the "CKJEABusiness"), which were acquired on January 31, 2006. Last year, theCompany reported earnings for the second quarter ended July 2, 2005 of$0.14 per diluted share. The Company also expects, based oninformation currently available, that revenues for the second quarterof fiscal 2006, including the CKJEA Business, will be approximately20% above reported revenues for the second quarter of fiscal 2005,with approximately 3% growth in the Company's pre-acquisitionbusinesses.

The Company will hold its second quarter fiscal 2006 earningsconference call at 4:30 p.m. EDT on Monday, August 14, 2006 to discussits results. Stockholders and other persons are invited to listen tothe call. To participate, dial (877) 692-2592, approximately fiveminutes prior to the 4:30 p.m. EDT start time. The call will also bewebcast and can be accessed via the investor relations page ofWarnaco's website at www.warnaco.com. For those unable to participate,a replay of the webcast will be available following the conferencecall.

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

ABOUT WARNACO

The Warnaco Group, Inc., headquartered in New York, is a leadingapparel company engaged in the business of designing, marketing andselling intimate apparel, menswear, jeanswear, swimwear, men's andwomen's sportswear and accessories under such owned and licensedbrands as Warner's(R), Olga(R), Lejaby(R), Body Nancy Ganz(tm),Speedo(R), Anne Cole(R), Op(R), Ocean Pacific(R), Cole ofCalifornia(R) and Catalina(R) as well as Chaps(R) sportswear anddenim, J. Lo by Jennifer Lopez(R) lingerie, Nautica(R) swimwear,Michael Kors(R) swimwear and Calvin Klein(R) men's and women'sunderwear and sportswear, men's, women's, junior women's andchildren's jeans and accessories and women's and juniors' swimwear.

FORWARD-LOOKING STATEMENTS

This press release, the call scheduled for August 14, 2006, aswell as certain other written, electronic and oral disclosure made bythe Company from time to time, contains "forward-looking statements"within the meaning of Rule 3b-6 under the Securities Exchange Act of1934, as amended, Rule 175 under the Securities Act of 1933, asamended, and relevant legal decisions. The forward-looking statementsinvolve risks and uncertainties and reflect, when made, the Company'sestimates, objectives, projections, forecasts, plans, strategies,beliefs, intentions, opportunities and expectations. Actual resultsmay differ materially from anticipated results or expectations andinvestors are cautioned not to place undue reliance on anyforward-looking statements. Statements other than statements ofhistorical fact are forward-looking statements. These forward-lookingstatements may be identified by, among other things, the use offorward-looking language, such as the words "believe," "anticipate,""estimate," "expect," "intend," "may," "project," "scheduled to,""seek," "should," "will be," "will continue," "will likely result," orthe negative of those terms, or other similar words and phrases or bydiscussions of intentions or strategies.

The following factors, among others and in addition to thosedescribed in the Company's reports filed with the SEC (including,without limitation, those described under the headings "Risk Factors"and "Statement Regarding Forward-Looking Disclosure," as suchdisclosure may be modified or supplemented from time to time), couldcause the Company's actual results to differ materially from thoseexpressed in any forward-looking statements made by it: economicconditions that affect the apparel industry; the Company's failure toanticipate, identify or promptly react to changing trends, styles, orbrand preferences; further declines in prices in the apparel industry;declining sales resulting from increased competition in the Company'smarkets; increases in the prices of raw materials; events which resultin difficulty in procuring or producing the Company's products on acost-effective basis; the effect of laws and regulations, includingthose relating to labor, workplace and the environment; changinginternational trade regulation, including as it relates to theimposition or elimination of quotas on imports of textiles andapparel; the Company's ability to protect its intellectual property orthe costs incurred by the Company related thereto; the Company'sdependence on a limited number of customers; the effects of theconsolidation of the retail sector; the Company's dependence onlicense agreements with third parties; the Company's dependence on thereputation of its brand names, including, in particular, Calvin Klein;the Company's exposure to conditions in overseas markets in connectionwith the Company's foreign operations and the sourcing of productsfrom foreign third-party vendors; the Company's foreign currencyexposure; the Company's history of insufficient disclosure controlsand procedures and internal controls and restated financialstatements; unanticipated future internal control deficiencies orweaknesses or ineffective disclosure controls and procedures; thesufficiency of cash to fund operations, including capitalexpenditures; the Company's ability to service its indebtedness, theeffect of changes in interest rates on the Company's indebtedness thatis subject to floating interest rates and the limitations imposed onthe Company's operating and financial flexibility by the agreementsgoverning the Company's indebtedness; the Company's dependence on itssenior management team and other key personnel; disruptions in theCompany's operations caused by difficulties with new systemsinfrastructure; the limitations on purchases under the Company's sharerepurchase program contained in the Company's debt instruments, thenumber of shares that the Company purchases under such program and theprices paid for such shares; the failure of newly acquired businessesto generate expected levels of revenues; the failure of the Company tosuccessfully integrate such businesses with its existing businesses(and as a result, not achieving all or a substantial portion of theanticipated benefits of the acquisition); and such newly acquiredbusiness being adversely affected, including by one or more of thefactors described above and thereby failing to achieve anticipatedrevenues and earnings growth.

The Company encourages investors to read the section entitled"Risk Factors" and the discussion of the Company's critical accountingpolicies under "Management's Discussion and Analysis of FinancialCondition and Results of Operations -- Discussion of CriticalAccounting Policies" included in the Company's Annual Report on Form10-K, as such discussions may be modified or supplemented bysubsequent reports that the Company files with the SEC. The discussionin this press release is not exhaustive but is designed to highlightimportant factors that may affect actual results. Forward-lookingstatements speak only as of the date on which they are made, and,except for the Company's ongoing obligation under the U.S. federalsecurities laws, the Company disclaims any intention or obligation toupdate or revise any forward-looking statements, whether as a resultof new information, future events or otherwise.