Blair Corporation (Amex: BL), (http://www.blair.com), a national multi-channel direct marketer of women's and men's apparel and home products, today announced results for the fourth quarter and year ended December 31, 2005.

Net sales for the year ended December 31, 2005, were $456.6 million, compared to $496.1 million reported for the year ended December 31, 2004. The reduction in net sales for the year ended December 31, 2005, reflects the elimination of the Crossing Pointe catalog which generated approximately $20 million less in net sales for 2005 than it did for 2004. In addition, net sales for 2005 were affected by more stringent credit standards and lower than anticipated response rates to Blair's traditional letter mailings.

Net income for the year ended December 31, 2005, was $31.5 million, or $4.79 per basic share and $4.71 per diluted share, compared to $14.9 million, or $1.83 per basic share and $1.80 per diluted share, reported for the year ended December 31, 2004.

The per share results for 2005 reflect the reduction of weighted average shares outstanding resulting from Blair's tender offer for the repurchase of 4.4 million outstanding shares on August 16, 2005. The Company had 3.9 million shares of common stock outstanding at December 31, 2005, compared to 8.2 million shares at December 31, 2004. Without the reduction in outstanding shares, basic and diluted earnings per share for 2005 would have been $4.11 and $4.05, respectively.

Net income and earnings per share results for the year ended December 31, 2005 reflect a one-time gain from the sale of Blair's credit portfolio of $27.7 million (pre-tax), or $2.71 per basic share and $2.66 per diluted share. Net results were impacted by expenses of $4.9 million (pre-tax), or $0.48 per basic share and $0.47 per diluted share, based on weighted basic and diluted outstanding shares of 6,579,876 and 6,699,406, respectively, associated with Blair's tender offer and severance costs. Expenses associated with the tender offer include the amortization of loan origination fees and interest expense related to a lending facility utilized to finance the tender offer and a compensation expenditure resulting from the Company's decision to repurchase stock acquired by employees under its stock option award program. Excluding the one-time gain and these expenses, net income for 2005 was $16.9 million, or $2.57 per basic share and $2.52 per diluted share.

Despite the reduction in net sales for 2005, without the effects of the one-time events mentioned above, net income increased $2 million to $16.9 million, or $2.57 per basic share and $2.52 per diluted share in 2005, compared to $14.9 million, or $1.83 per basic share and $1.80 per diluted share in 2004. The increase in net income is primarily due to a reduction in the cost of goods sold.

Cost of goods sold, as a percentage of net sales for the year ended December 31, 2005, was 44.7% compared to 47.4% for the year ended December 31, 2004. The considerable improvement is primarily due to an increase in direct merchandise purchasing, which significantly lowered merchandise acquisition costs. Blair plans to continue to expand internal product development and direct international sourcing as part of its strategic initiatives to further reduce cost of goods and increase profitability. Other factors that contributed to improvement in the above percentage include a reduction in customer returns reflecting ongoing programs to improve merchandise quality, internal efforts to lower overall shipping costs and initiatives to lower liquidation costs.

Blair's e-commerce channel generated $95.0 million in gross sales demand in 2005, compared to $91.7 million in 2004, reflecting the continued growth of online shopping by our customers. The increase in the e-commerce channel demand for 2005 was achieved despite the discontinued Crossing Pointe catalog, which generated $8.3 million less in online gross sales demand as compared to 2004.

Net sales for the fourth quarter ended December 31, 2005 were $130.1 million compared to $133.4 million reported for the fourth quarter ended December 31, 2004. The reduction in net sales for the fourth quarter of 2005 is attributable to the elimination of the Crossing Pointe catalog, completed in March 2005.

Net income for the fourth quarter of 2005 was $23.4 million, or $6.02 per basic and $5.87 per diluted share, compared to $6.3 million, or $0.78 per basic share and $0.77 per diluted share, reported for the fourth quarter of 2004. These per share results for the fourth quarter of 2005 reflect the aforementioned reduction of weighted average shares outstanding resulting from Blair's tender offer for the repurchase of 4.4 million outstanding shares on August 16, 2005. Without the reduction in outstanding shares, earnings per basic and diluted share for the fourth quarter of 2005 were $2.82 and $2.79, respectively.

Net income and earnings per share results for the fourth quarter of 2005 were favorably affected by the aforementioned one-time gain of $27.7 million (pre-tax) from the sale of Blair's credit portfolio or $4.61 per basic share and $4.49 per diluted share. Net results were impacted by expenses of $1.1 million (pre-tax), or $0.19 per basic share and $0.18 per diluted share, based on weighted basic and diluted outstanding shares of 3,891,139 and 3,992,317, respectively, associated with Blair's tender offer and severance costs. Expenses associated with the tender offer include the amortization of loan origination fees and interest expense related to a lending facility utilized to finance the tender offer. Without the one-time gain and these expenses, net income for the fourth quarter of 2005 was $6.2 million, or $1.59 per basic share and $1.55 per diluted share.

Despite the reduction in net sales for the fourth quarter of 2005, without the effects of the one-time events mentioned above, net income was $6.2 million, or $1.59 per basic share and $1.55 per diluted shared, compared to $6.3 million, or $0.78 per basic share and $0.77 per diluted share, in 2004.

Blair's e-commerce channel for the fourth quarter of 2005 generated $27.2 million in gross sales demand, compared to $25.5 million for the fourth quarter of 2004. The increase in the e-commerce channel demand was achieved despite the discontinued Crossing Pointe catalog, which generated $2.6 million less in gross sales demand for the fourth quarter of 2005, compared to the fourth quarter of 2004.

"The positive net results for 2005 lend further credence to the success of Blair's strategic plan to focus on its core customer base and better position itself for future growth. The repurchase of over four million shares of stock and the doubling of the regular quarterly dividend reflect our confidence in the Company and commitment to further enhance shareholder value. We are pleased that our continuing efforts to expand internal product development and direct sourcing have played a significant role in the reduction of cost of goods sold. Blair is well positioned to expand its position as the premier direct marketer to value-conscious consumers," said John Zawacki, President and Chief Executive Officer.

ABOUT BLAIR

Headquartered in Warren, Pennsylvania, Blair Corporation sells a broad range of women's and men's apparel and home products through direct mail marketing and its Web sites http://www.blair.com and http://www.irvinepark.com. Blair Corporation employs approximately 2,000 associates (worldwide) and operates facilities and retail outlets in Northwestern Pennsylvania as well as a catalog outlet in Wilmington, Delaware. The Company, which has annual sales of approximately $500 million, is publicly traded on the American Stock Exchange (Amex: BL). For additional information, please visit http://www.blair.com .

This release contains certain statements, including without limitation, statements containing the words "believe," "plan," "expect," "anticipate," "strive," and words of similar import relating to future results of the Company (including certain projections and business trends) that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to, changes in political and economic conditions, demand for and market acceptance of new and existing products, as well as other risks and uncertainties detailed in the most recent periodic filings of the Company with the Securities and Exchange Commission.

CONTACTS:

Blair Corporation Carl Hymans

Larry Pitorak, Chief Financial Officer G.S. Schwartz & Co

814-723-3600 212-725-4500

carlh@schwartz.com

BLAIR CORPORATION

COMPARATIVE OPERATING HIGHLIGHTS

(UNAUDITED)

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

For the Three Months Ended December 31

2005 2004

Net sales $ 130,126 $ 133,411

Income before income taxes 36,220 9,619

Income taxes 12,804 3,273

Net income 23,416* 6,346

Basic / diluted earnings per share $6.02/$5.87* $0.78/$0.77

Weighted average basic shares

outstanding 3,891,139** 8,146,648

Weighted average diluted shares

outstanding 3,992,317** 8,267,949

*Incorporates a one-time gain of $27.7 million (pre-tax) from the sale of Blair's credit portfolio or $4.61 per basic share and $4.49 per diluted share and expenses of $1.1 million (pre-tax), or $0.19 per basic share and $0.18 per diluted share, based on weighted basic and diluted outstanding shares of 3,891,139 and 3,992,317, respectively, associated with Blair's tender offer and severance costs. Expenses associated with the tender offer include the amortization of loan origination fees and interest expense related to a lending facility utilized to finance the tender offer. Without the one-time gain and these expenses, net income for the fourth quarter of 2005 was $6.2 million or $1.59 per basic share and $1.55 per diluted share.

**The weighted average shares outstanding take into account the repurchase of 4.4 million shares of the Company's common stock as part of the tender offer completed on August 16, 2005.

For the Twelve Months Ended December 31

2005 2004

Net sales $ 456,625 $ 496,120

Income before income taxes 49,129 23,367

Income taxes 17,583 8,498

Net income 31,546*** 14,869

Basic / diluted earnings

per share 4.79/$4.71*** $ 1.83/$1.80

Weighted average basic shares

outstanding 6,579,876**** 8,107,575

Weighted average diluted

shares outstanding 6,699,406**** 8,241,515

***Incorporates a one-time gain of $27.7 million (pre-tax) from the sale of Blair's credit portfolio or $2.71 per basic share and $2.66 per diluted share and expenses of $4.9 million (pre-tax), or $0.48 per basic and $0.47 per diluted share, based on weighted basic and diluted outstanding shares of 6,579,876 and 6,699,406, respectively, associated with Blair's tender offer and severance costs. Expenses associated with the tender offer include the amortization of loan origination fees and interest expense related to a lending facility utilized to finance the tender offer and a compensation expenditure resulting from the Company's decision to repurchase stock acquired by employees under its stock option award program. Excluding the one-time gain and these expenses, net income for 2005 was $16.9 million or $2.57 per basic share and $2.52 per diluted share.

****The weighted average shares outstanding take into account the repurchase of 4.4 million shares of the Company's common stock as part of the tender offer completed on August 16, 2005.

SELECTED BALANCE SHEET ITEMS AS OF DECEMBER 31

DOLLARS IN THOUSANDS

2005 2004

Customer accounts receivable,

net $ - 0 - $ 151,196

Inventories $ 83,364 $ 84,294

Total assets $ 193,094 $ 351,239

Total liabilities $ 66,686 $ 68,672

Stockholders' equity $ 126,408 $ 282,567

Total liabilities and

stockholders' equity $ 193,094 $ 351,239

Source: prnewswire