For Immediate Release

Forstmann & Company, Inc. to Facilitate Sale or Merger Through Chapter 11 Filing
             Receives $50 Million in DIP Financing


    New York, NY -- July 23, 1999 -- Forstmann & Company,  Inc. (OTCBB:FSMN) one
of the largest and oldest  (Founded in 1904) wool fabric  producing firms in the
U.S. announced today that it has filed a voluntary petition for protection under
Chapter 11 of the U.S.  Bankruptcy  Code. The purpose of commencing a Chapter 11
case was to achieve its  long-term  objectives  which may include a merger,  new
equity investment, or sale of the Company.

    The Company also reached an  agreement  with its bank group,  led by Bank of
America, to provide a $50 million  debtor-in-possession line of financing at the
outset.  Forstmann believes this amount will be more than sufficient to meet its
continued  operating needs. The Company also said that it has retained  (subject
to Bankruptcy  Court  approval) the New  York-based  investment  banking firm of
Butler, Chapman & Co., Inc. to assist it in identifying potential buyers, merger
partners and or investors.  In that regard the Company has hired Richard  Redden
of the turnaround  consulting firm of OSNOS Associates,  Inc., based in New York
and Charlotte, N.C., who will serve as Interim Chief Operating Officer to assist
in completing its organization.

     Rod Peckham,  president of Forstmann, said that the Company had discussions
with several interested  parties to merge,  acquire or make an equity investment
in the  business.  He said that the filing will allow the  Company to  eliminate
significant recurring  liabilities,  which have served as an impediment to these
opportunities  and to effect a restructuring and redirection of the Company from
a product  driven  commodity-based  entity to a market driven niche  supplier of
finished goods.

    The filing  will also  allow the  Company to  continue  to operate  while it
pursues these various  opportunities  and to meet its  obligations to employees,
customers and vendors.  He said that, with the Company's new financing in place,
customers can be assured of continued good service and vendors can be assured of
receiving  timely  payment for goods and services  received after today's filing
date.

    Mr. Peckham said that after exploring all available alternatives,  the board
concluded that a voluntary Chapter 11 proceeding was the only viable alternative
for the Company to achieve its Long-term objectives.

   "The companies that survive in this industry in the future will fall into two
categories," he said. "(1) Large  companies that can compete  worldwide  through
economies of scale, global sourcing and selling  opportunities and that are well
capitalized  to ride the global ups and downs and;  (2) niche  market  suppliers
that  supply  products to serve  limited  specific  market  needs  through  good
customer service,  innovation,  good price-value and that offer the retailer the
low inventory,  quick response that it requires.  When properly reorganized,  we
are  confident  that we can  successfully  compete in those  niche  markets  and
produce a reasonable return for our stakeholders."

    Mr.  Peckham  said  the  Company's  current  customers  and  retailers  have
maintained a favorable  perception of the Company and have  expressed a need for
its capacity, quality and product as a U.S. supplier for U.S. and 807 companies.
He said that several large  retailers  have told the Company that they see major
opportunities  in new wool products through  purchased  packages using Forstmann
fabrics and their joint testing and development.

    "Despite the fact that U.S. wool consumption was up in 1997/1998 by 2-3% per
capita,  U.S. wool fabric producers saw an average decline of over 15% in market
demand,"  Mr.  Peckham  said.  "There  were a number of reasons  for this excess
worldwide  capacity.  First, the market experienced added capacity in areas like
Mexico,  Turkey and Korea. This resulted in the dumping of wool fabrics at below
cost to generate hard currency and keep employees  working.  Second,  the market
was also  adversely  affected  by the Asian  financial  collapse  and  resulting
devaluations of their currency. This resulted in reduced consumption in Asia and
the dumping of products by Asian  producers at low prices on the world  markets.
Other contributing factors include recent warm winter trends to casual dress for
men and women and the resultant lower demand for suiting,  and the increased use
of high tech synthetics in winter apparel."

     Mr.  Peckham  said  that over the past 12  months,  the  Company  has taken
extensive  measures  to reduce  costs  and  increase  competitiveness.  "Through
headcount  reductions  and plant and office  consolidations  we have reduced our
operating  costs by $55 million per year.  This effort has  included  the entire
organization with $40 million  reductions in personnel,  $5 million in corporate
overhead and $10 million in plant related cost and expenses," he stated.

    "Chapter  11  allows  us to  continue  to  move  forward  with  our  planned
improvements  to the  business  and pursue  these other  objectives  at the same
time," he stated.  "With the support of our  customers  and vendors and the hard
work of our employees, we are confident that we will be able to emerge from this
process a stronger, more competitive company."

     Peckham  said that while it  completes  its  restructuring,  the  Company's
plants,  sales and design  staffs will  continue  to do  business as usual.  The
Company  said that it has the  support  of its  lenders in moving  forward,  and
expects  that -- given the new  financing  and the priority  status  accorded to
vendors who ship after the filing date -- "the vendor community will support us,
as well."

  "The  action  we took  today  not  only  enhances  our  ability  to  meet  our
obligations  to customers and  suppliers,  but puts the business in a far better
position to capitalize on future opportunities," Mr. Peckham said.

   Forstmann  & Company  voluntarily  filed a petition of  reorganization  under
Chapter 11 in U.S. Bankruptcy Court for the Southern District of New York. It is
represented in the bankruptcy case by the law firm of Salans Hertzfeld Heilbronn
Christy & Viener.  Forstmann & Company has  manufacturing  facilities in Georgia
and is headquartered in New York.  Forstmann  designs,  manufactures and markets
woolen and  worsted  fabrics  for men's and  women's  sportswear,  coating,  and
specialty products.  Its wholly owned subsidiary,  Forstmann Apparel, Inc., also
headquartered in New York,  designs,  markets and distributes  women's suits and
has the North American license for Oleg Cassini's women's suits.

Note:
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     This press release may include statements that constitute "forward-looking"
statements.  These statements are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Forward-looking statements
inherently  involve risks and  uncertainties  that could cause actual results to
differ materially from the forward-looking statements.  Factors that would cause
or contribute to such  differences  include,  but are not limited to,  continued
acceptance of the Company's  products in the marketplace,  competitive  factors,
dependence upon third-party  vendors,  and other risks detailed in the Company's
periodic report filings with the Securities and Exchange  Commission.  By making
these forward-looking statements, the Company undertakes no obligation to update
these statements for revisions or changes after the date of this release.