David Loren Corporation Issues Letter to Shareholders

BEVERLY HILLS, Calif., Feb. 1 /PRNewswire-FirstCall/ -- David Loren Corporation (Pink Sheets: DLCR), a company engaged in the design, production and wholesale merchandising of quality clothing to major department stores, mass merchants, specialty chains and direct-to-consumer merchants, is pleased to issue this letter to its shareholders from Chief Executive Officer David Loren.

To David Loren Corporation Shareholders:

As most of you know, 2009 was a difficult year for the apparel industry.  The impact of a distressed global economy had many companies redefining their concept of success as survival.  While we, too, had a challenging year, we continued working with focus, optimism, and the determination to not only maintain our existing vendor relationships but to create new opportunities in a fundamentally changed retail landscape.  As we move forward into what appears to be a modest upswing in 2010, we are cautiously optimistic and determined to emerge from 2009's economic downturn as a leaner, stronger and more competitive company.

In 2009 we significantly reduced our overhead by initiating some of the same survival strategies that our merchant customers employed including eliminating salaried and contract positions in favor of out-sourced relationships; reducing management and other administrative compensation; closing the Company's New York office in a favor of a comparable gratis location; and eliminating an expensive Beverly Hills lease obligation.  While some of these cost reductions were difficult decisions, we believe that by making tough calls we were able to strengthen and leverage our operational capability and effectively move forward in a subdued retail climate.

In order to expand our sales force without adding significant overhead expense we have entered into arrangements with four independent sales and marketing professionals who have strong relationships with over a dozen major merchant retailers spanning different retail categories.  We have identified and targeted certain of these new merchant retailers by evaluating product needs that are complimentary to our design and production strengths.  With seasoned sales representatives in both New York City and Los Angeles we will also be able to more effectively maintain continuity and consistency with our merchants.

Our existing vendor relationships are with some of the most successful and resilient merchants in the country.  We will continue to develop and present quality product for these retailers even as we target new ones.

In December 2009 we had the opportunity to present an exclusive brand initiative to a retailer that has not only a strong domestic but also a global presence.  After our initial presentation we were invited to present a detailed merchandising plan for the brand.  We are strongly committed to this brand concept and should we be unsuccessful with this retailer, we will look for another home for this product line.

We recently entered into serious discussions to develop an American-made David Loren Home product line which would include both hard and soft home furnishings in David Loren-designed fabrics.  If we are successful with this project it will be a major expansion for the David Loren brand.

Even as we promote the David Loren brand to our existing merchant apparel customers, our primary focus for 2010 will be "private label" product for proprietary brands owned by merchant retailers.

We continue to have a mutually favorable production and production financing agreement with a large independent production partner.  This arrangement provides the Company with direct access to vendor-approved factories in Viet-Nam, Madagascar and China, and eliminates many costly factoring fees and expenses.  Our experience in this relationship has exceeded our expectations for both production quality and timely delivery.

My plans and goals for 2010 are focused on creating sustainable, profitable growth over the long term by continuing to create a quality product; expanding our brands; nurturing our existing merchant relationships even as we continue to develop new ones; and maintaining operational excellence.

I would like to thank all of you for your continued support.  I am inspired by your interest in and enthusiasm for David Loren Corporation and I remain committed to doing everything I can to justify your confidence in our Company and to create shareholder value.

Sincerely,

David Loren

Chief Executive Officer

SOURCE David Loren Corporation