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Levitz Home Furnishings, Inc. Assets to be Purchased by Retail Investment Specialist Prentice Capital Management LP

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Levitz Home Furnishings, Inc. announced that an affiliate of Prentice Capital Management LP ("Prentice Capital") has purchased substantially all of the Company's assets at a recently-completed auction in partnership with Great American Group. The sale was approved by the U.S. Bankruptcy Court for the Southern District of New York. Prentice Capital, a New York-based money management organization that owns significant stakes in retail companies such as The Wet Seal, Inc., KB Toys, Inc., and Goody's Family Clothing has acquired Levitz's assets at a total transaction value of more than $70 million, including the assumption of certain of the debtor's liabilities. In addition, Prentice has agreed to fulfill the debtor's customer deposit obligations with product. Upon closing, the Company has also entered into a new $55 million credit facility with GE Commercial Finance. In addition, Prentice has provided an additional $50 million in funding to the Company. Prentice believes that the Company is well-capitalized and has the ability to operate as a strong competitor in the home furnishings market. "Levitz is a great addition to our portfolio of companies, and we believe that there is a significant business opportunity here," said Jonathan Duskin, Managing Director of Prentice Capital Management LP. "The strong Levitz brand name, operating infrastructure and dedicated associates provide an excellent platform to make this a healthy and prosperous retailer. With the financing announced today and a reinvigorated merchandising strategy, Levitz will be in a great position to take advantage of its strengths as one of the most recognizable brand names in America while providing customers with high quality merchandise and service." Levitz also announced that it will be concentrating on the profitable West Coast and New York metropolitan markets in its going-forward operations, and will be exiting the greater Philadelphia and Connecticut markets. Additional details on these operational initiatives and merchandising strategies will be announced separately. Levitz and Prentice have established a team of skilled and experienced retail and operating experts to assist in leading the Company during the initial stages of its turnaround strategy. Over the coming weeks and months, the Company expects to fortify this new senior management with highly qualified retail executives. Duskin added, "We would like to thank the management team led by C. Mark Scott for guiding Levitz during the past several months. Their hard work, expertise and leadership have been critical in getting this excellent franchise through its time in chapter 11. "We are deeply grateful for the patience and strong support of our customers, vendors, lenders, and associates during this time. We are optimistic that this infusion of capital and a renewed focus on its core markets will be the basis for Levitz to surpass previous levels of financial success and customer satisfaction." Levitz announced on October 11, 2005 that it filed for protection under chapter 11 of the U.S. Bankruptcy Code in the Southern District of New York. The case number for Levitz's filing with the U.S. Bankruptcy Court for the Southern District of New York is #05-45189, and the Court's web site is http://www.nysb.uscourts.gov/. About Levitz Home Furnishings, Inc.: Levitz Home Furnishings, Inc. is a leading specialty retailer of furniture in the United States with 79 locations in major metropolitan areas, principally the Northeast and on the West Coast of the United States. Additional information about the company and its brands is available at http://www.levitz.com/. About Prentice Capital Management LP: Prentice Capital Management LP is a New York-based money management organization with over $1 billion under management, primarily in the retail/consumer sector. More information and comments from Levitz employees can be found on the furninfo.com "Trade" message board (click on message board link at left).