Sun Capital Commences Tender Offer to Purchase Kellwood for $21.00 Per Share in Cash

Intends to Nominate Candidates For Election To Kellwood Board of
Directors

Demands Access to Kellwood Books and Records to Investigate Impact
of Bond Tender
NEW YORK--(Business Wire)--Sun Capital Securities Group, LLC today announced that an
affiliate, Cardinal Integrated, LLC, has commenced a tender offer to
purchase all of the outstanding shares of Kellwood Company ("Kellwood"
or the "Company") (NYSE: KWD) common stock for $21.00 per share in
cash. The offer values Kellwood at approximately $762 million,
including the assumption of Kellwood's net debt, and represents a 38%
premium to Kellwood's closing price on September 18, 2007, the last
trading day before Sun Capital's public disclosure of its acquisition
proposal to Kellwood's Board of Directors, and a premium of 27% to
Kellwood's closing stock price yesterday, which reflects the existence
of Sun Capital's offer to acquire the Company.

In making the offer, which is not contingent on financing or due
diligence, Sun Capital announced that the $21.00 offer price will be
reduced to $19.50 if Kellwood does not terminate its $60 million
tender offer for its 7.875% Senior Notes due in July 2009 (the "Bond
Tender"), announced on January 9, 2008. The alternative price reflects
the reduction in the Company's equity value that Sun Capital believes
has resulted from the Bond Tender, as well as other ill-advised
initiatives, that Kellwood has adopted since Sun Capital initially
disclosed its acquisition proposal.

Sun Capital, which owns 9.9% of Kellwood's outstanding common
shares, also said that if an agreement with Kellwood is not reached in
the near term, it intends to nominate its own slate of directors for
election to Kellwood's Board at the 2008 Annual Meeting of
Stockholders. If it does nominate directors, Sun Capital will file
proxy solicitation materials with the U.S. Securities and Exchange
Commission ("SEC").

Sun Capital also demanded access to certain books and records of
the Company pursuant to Section 220 of the General Corporation Law of
the State of Delaware. Sun Capital has made this demand to, among
other things, enable it to investigate the impact of the Bond Tender
on shareholder value. It is also seeking to determine whether there
exists a basis to allege that Kellwood's Board of Directors breached
its fiduciary duties by authorizing the Bond Tender because it is
destructive of value and/or constitutes an unreasonable takeover
defense.

Jason Bernzweig, Vice President of Sun Capital, said, "We are
disappointed that Kellwood's Board is unwilling to enter into a
constructive dialogue with us regarding what we believe is a very
compelling transaction for Kellwood's stockholders. This refusal to
discuss a potential transaction has forced us to take our offer
directly to Kellwood's stockholders - enabling them to choose for
themselves between the value certainty of our offer and trusting
management to successfully execute Kellwood's highly speculative
strategic plan."

In connection with making the offer, Sun Capital today sent the
following letter to the Kellwood Board of Directors informing them of
the offer and urging them to enter into discussions with Sun Capital
regarding a potential transaction.

-0-
*T
January 15, 2008

The Board of Directors
Kellwood Company
c/o Mr. Robert C. Skinner Jr.
Chairman & Chief Executive Officer
420 5th Avenue, 28th Floor
New York, NY 10018
*T

Members of the Board:

We want to inform you that affiliates of Sun Capital Securities
Group, LLC ("Sun Capital") are commencing a tender offer to purchase
all of the outstanding shares of Kellwood Company ("Kellwood" or the
"Company") common stock for $21.00 per share in cash. Our $21.00 per
share offer represents a 38% premium to the Company's unaffected stock
price on September 18, 2007, the day before we made our offer public.
This offer price, however, will be reduced to $19.50 per share if the
Company does not terminate its $60 million tender offer (the "Bond
Offer") for its 7.875% Senior Notes due in July 2009 (the "Notes"). We
simply cannot justify the premium set forth in our initial proposal if
you continue to destroy equity value through ill-advised initiatives,
including but not limited to the Bond Offer.

Importantly, we believe the Board should also seriously consider
that the stock is clearly trading on the prospect of a transaction.
Since we made our initial offer, Kellwood's peer group has depreciated
29%, while the S&P Consumer Discretionary Index has declined 18% due
to weakening fundamentals in the consumer sector. Conversely, during
this timeframe, Kellwood's stock has appreciated 10%, reflecting the
significant value inherent in our buyout proposal. Accordingly, we
believe Kellwood's stock price would decline significantly, likely to
a level well below its trading price on September 18, 2007, absent the
prospect of a sale of the Company. Therefore, our offer of $21.00 per
share arguably represents a premium substantially greater than 38%
relative to Kellwood's unaffected stock price. Nevertheless, Sun
Capital is fully prepared to honor our offer price of $21.00 per share
if Kellwood rescinds the Bond Offer.

Your continued unwillingness to enter into a constructive dialogue
with us regarding our interest in acquiring control of Kellwood has
left us no choice but to take our proposal directly to your
shareholders. We firmly believe our $21.00 per share cash tender
offer, which is not contingent on financing or due diligence, presents
Kellwood shareholders with a very attractive value proposition given
the sizeable premium and the value certainty it provides. Taking into
account the substantial value impairment suffered in recent years, as
well as the considerable risk associated with Kellwood's ability to
execute its latest strategic plan, we believe the shareholders will
recognize the compelling value of our offer.

We believe your fiduciary duties should compel you to enter into
good faith negotiations with us regarding a consensual transaction. In
this context, the Company should take all actions necessary to allow
our offer to proceed, including eliminating the Company's rights plan,
Delaware General Corporation Law Section 203 and Section 16 of the
Company's Certificate of Incorporation as obstacles to our offer.
However, if Sun Capital is unable to reach agreement with you in the
near term regarding a negotiated transaction, we fully intend to
nominate a slate of directors for election at the Company's 2008
Annual Meeting.

Please consider the following:

-- $21.00 per share in cash offers a substantial premium and
value certainty. Sun Capital's $21.00 per share offer
represents (1) a 38% premium to Kellwood's closing stock price
on September 18, 2007, the last trading day before disclosure
of our offer; (2) a 40% premium to Kellwood's closing stock
price on November 7, 2007, the day after Kellwood announced
its latest strategic plan; and (3) a 27% premium to Kellwood's
closing stock price on January 14, 2008, which plainly
reflects the existence of our offer to acquire the Company and
deliver immediate value to its shareholders.

Our $21.00 per share offer implies a Price-to-Earnings multiple of
21.2 times and 14.0 times the Company's own 2007 and 2008 financial
guidance, respectively, assuming cash proceeds from the sale of Smart
Shirts are used to immediately repurchase stock and debt on a pro
forma basis. As such, our offer ascribes fair value to the Company's
optimistic 2008 financial guidance, despite the clear risk that
Kellwood may be unable to achieve projected EPS growth of more than
100% on a reported basis. Additionally, our offer implies an
Enterprise Value-to-LTM EBITDA transaction multiple of 7.7 times. This
valuation represents a significant premium to Kellwood's broader
apparel industry peer group, which consists of companies that largely
have had more stable financial results and are not attempting to
execute on a long-term turnaround initiative. Specifically, the
apparel peer group trades at a median estimated 2007 Price-to-Earnings
multiple of 10.5 times and an LTM Enterprise Value-to-EBITDA multiple
of 6.0 times. Accordingly, our offer provides value certainty for
shareholders without bearing the substantial execution risk of
Kellwood's latest strategic plan.

-- Kellwood's 5-year plan is overly optimistic and lacks
credibility. Your new plan announced in November 2007 -- which
looks remarkably similar to the plan you announced in mid-2005
that did not deliver promised value -- sets extremely
ambitious goals across all major metrics. The latest plan has
established a target operating margin of 9% by 2012, which is
substantially the same target that has been communicated to
shareholders since 2003 as a near-term objective. Your
inability to achieve this level of profitability, which is now
expected to take a decade to realize from when the commitment
was first made, is very concerning. In fact, since
establishing this margin goal, despite the Company's various
restructuring plans, the business and margins have actually
deteriorated.

Kellwood's projected compound annual EPS growth rate of 25%, on
top of a projected 100%-plus increase in 2008 on a reported basis,
exceeds that of all of its industry peers and is significantly greater
than the peer group median growth rate of 13%. Therefore, the Company
and its board are asking shareholders to trust management, yet again,
to deliver significant improvement in financial performance,
immediately after announcing another considerable earnings shortfall
versus guidance.

-- Kellwood has a history of unmet financial targets and poor
returns on capital deployed. Since 1998, Kellwood has spent
almost $1 billion on capital expenditures and acquisitions
(net of divestitures) and returned $310 million to
shareholders in the form of share repurchases and dividends.
Moreover, in each of the past five years, the Company's lack
of success in executing its strategic initiatives has led it
to consistently revise annual guidance downward. Over these
same periods, Kellwood's stock has significantly
underperformed that of its peers and all relevant indices,
losing nearly 45% of its value since the beginning of 1998 and
37% since 2003. In its public comments since announcing its
latest strategic plan, Kellwood's management has failed to
explain why, given this track record, shareholders should have
confidence in the latest optimistic projections.

-- Repaying $60 million of Notes is another clear example of
financial mismanagement. For the reasons set forth in our
letter dated January 10, 2008, paying off $60 million of the
Notes, which have terms extremely favorable to Kellwood that
cannot be replicated in today's financing environment, is
damaging to the Company and represents a direct transfer of
value from shareholders to bondholders. Specifically, this
equates to approximately $2.30 per share of realizable value
to shareholders or 15% of the Company's market capitalization.
Not only is the Bond Offer a poor financial decision, we
specifically note that the bonds do not contain a change of
control provision, which means shareholders could capture a
higher value in a sale of the Company because a buyer could
assume the Notes, which have more favorable terms relative to
alternate financing options. Not surprisingly, the negative
equity value implication of the Bond Offer was recognized by
the public market, as Kellwood's stock declined 8% on the day
the Bond Offer was announced, while the broader markets were
up 1%.

Accordingly, we insist that Kellwood's board immediately terminate
the Bond Offer and allow the Company's shareholders the right to
realize the value inherent in Sun Capital's $21.00 offer, rather than
unnecessarily transferring this value to the bondholders.

-- Kellwood has refused repeated requests to engage in
constructive dialogue. In spite of numerous requests from Sun
Capital, as well as demands from other significant
shareholders, you have refused even to discuss our offer with
us or consider alternative transactions.

We believe Kellwood's shareholders should be allowed to choose for
themselves between our offer, which delivers substantial, immediate
and certain value, and Kellwood's highly speculative five-year plan.
Consequently, we have decided to take our offer directly to Kellwood
shareholders. As we have repeatedly stated, Sun Capital would strongly
prefer to enter into a negotiated transaction. However, given the
Company's poor track record and your unwillingness to discuss our
offer with us, we feel compelled to act now to protect our substantial
investment in Kellwood - which at 9.9% of the outstanding shares is
significantly larger than the collective ownership position of
Kellwood's directors and executive officers.

We hope you will honor your fiduciary obligations to Kellwood's
shareholders and enter into a constructive dialogue with Sun Capital
regarding our proposal. We stand ready to work with you expeditiously
to complete a definitive agreement to acquire Kellwood. Consistent
with our disclosure obligations, we are amending our Schedule 13-D
filing to make this letter public.

-0-
*T
Sincerely,

/s/ Jason G. Bernzweig
Jason G. Bernzweig
Vice President
Sun Capital Securities Group, LLC
*T

The tender offer and withdrawal rights are scheduled to expire at
12:00 midnight New York City time, on Tuesday, February 12, 2008,
unless extended.

The offer is conditioned upon, among other things, (i) acceptance
by at least the number of shares that, when added to the shares
already owned by Sun Capital, represents a majority of the Kellwood's
outstanding shares on a fully diluted basis, (ii) Kellwood's Board
taking all necessary actions to make its stockholder rights plan, the
supermajority voting provisions in its certificate of incorporation
and Section 203 of the Delaware General Corporation Law inapplicable
to the offer, (iii) receipt of necessary regulatory approvals, and
(iv) other customary conditions. The complete terms and conditions
will be set forth in the Offer to Purchase, which will be filed with
the SEC later today. Kellwood's stockholders may obtain copies of all
the offering documents, including the Offer to Purchase, free of
charge at the SEC's website (www.sec.gov) or by contacting D.F. King &
Co., Inc., the Information Agent for the offer, toll-free at
800-269-6427. Information concerning the offer, including the Offer to
Purchase and other tender offer documents, will also be available at
http://www.KellwoodValue.com.

Citi and Credit Suisse Securities (USA) LLC are acting as
financial advisors to Sun Capital Securities Group, LLC and Kirkland &
Ellis LLP is acting as legal advisor to Sun Capital.

Investor Conference Call

Sun Capital will hold a conference call today at 10:00 a.m. ET for
the investment community. Participants may listen via telephone by
dialing (866) 356-4123 if calling from the United States, or (617)
597-5393 if dialing from outside of the United States and entering
account number 46585067. Please dial in 10 minutes prior to the start
of the call. A telephone replay will also be available beginning
approximately one hour after the event. To access the replay, please
dial (888) 286-8010 for callers within the United States and (617)
801-6888 for callers outside of the United States and enter conference
ID number 10607905. A live audio webcast of the call also will be
available and archived at http://www.KellwoodValue.com. The investor
presentation will be available for download at the start of the call
on http://www.KellwoodValue.com.

About Sun Capital

Sun Capital Partners, Inc. is a leading private investment firm
focused on leveraged buyouts, equity, debt, and other investments in
market-leading companies that can benefit from its in-house operating
professionals and experience. Sun Capital affiliates have invested in
and managed more than 175 companies worldwide with combined sales in
excess of $35.0 billion since Sun Capital's inception in 1995. Sun
Capital has offices in Boca Raton, Los Angeles, and New York, and
affiliates with offices in London, Tokyo, and Shenzhen.

Additional Information and Where to Find It

This press release is provided for informational purposes only and
is neither an offer to purchase nor a solicitation of an offer to sell
any securities of Kellwood. The offer to purchase or solicitation of
offers to sell is being made pursuant to a Tender Offer Statement on
Schedule TO (including the Offer to Purchase, Letter of Transmittal
and other related offer documents) filed by Cardinal Integrated, LLC
with the SEC on January 15, 2008. Before making any decision with
respect to the offer, Kellwood stockholders are advised to read these
documents, as they may be amended from time to time, and any other
documents relating to the tender offer that are filed with the SEC
carefully and in their entirety because they contain important
information, including the terms and conditions of the offer. Kellwood
stockholders may obtain copies of these documents for free at the
SEC's website at www.sec.gov, or by calling D.F. King & Co., Inc., the
Information Agent for the offer, at (800) 269-6427.

This press release and the Offer to Purchase do not constitute a
solicitation of a proxy for or with respect to any annual or special
meeting of Kellwood's stockholders. Any such solicitation will be made
only pursuant to separate proxy solicitation materials complying with
all applicable requirements of Section 14(a) of the Securities
Exchange Act of 1934, as amended.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements. All
statements contained in this press release that are not clearly
historical in nature or that necessarily depend on future events are
forward-looking, and the words "anticipate," "believe," "expect,"
"estimate," "plan," and similar expressions are generally intended to
identify forward-looking statements. These statements are based on
current expectations of Sun Capital Partners, Inc. and its affiliates
and currently available information. They are not guarantees of future
performance, involve certain risks and uncertainties that are
difficult to predict and are based upon assumptions as to future
events that may not prove to be accurate. Sun Capital does not assume
any obligation to update any forward-looking statements contained in
this press release.

Media:
Sard Verbinnen & Co
Jim Barron / Maggie Pisacane / Nathaniel Garnick
212-687-8080
or
Stockholders:
D.F. King & Co., Inc.
Richard Grubaugh / Edward McCarthy
212-269-5550

Copyright Business Wire 2008