Swank, Inc.

Our net sales during the quarter ended March 31, 2012 increased 8.9% to $28,408,000 compared to $26,084,000 for the corresponding period in 2011. The increase was mainly due to higher net sales of our belt merchandise, offset in part by decreases in men’s personal leather goods and gifts. Gross profit during the quarter of $7,880,000 decreased by $349,000 or 4.2% compared to last year’s gross profit of $8,229,000. Gross profit expressed as a percentage of net sales decreased to 27.7% from 31.5% last year principally due to higher merchandise costs.

Selling and administrative expenses during the quarter increased $1,172,000 or 14.4% to $9,325,000 or 32.8% of net sales compared to $8,153,000 or 31.3% of net sales for the same period last year. The increase was due to $934,000 in transaction-related costs recorded during the quarter in connection with the Merger (see Note 9 to the condensed financial statements above) as well as increases in freight on sales and district sales expenses, offset in part by decreases in insurance, professional fees not related to the Merger, and life insurance proceeds.

Our net sales during the quarter ended March 31, 2012 increased $2,324,000 or 8.9% to $28,408,000 compared to $26,084,000 for the corresponding period in 2011. The increase was due to higher net sales of our belt merchandise offset in part by a reduction in personal leather goods and gift net sales. The increase in belt net sales was mainly due to shipments of private label goods to certain major department store accounts in connection with both new and existing merchandise programs. For personal leather goods, a decrease in shipments to certain “labels for less” customers was offset in part by increases to department store customers.

Interest expense decreased by $5,000 or 11.9% during the quarter ended March 31, 2012 compared to the corresponding period last year. The decrease was due to a reduction in average borrowings. Average borrowings under our revolving credit agreement during the quarter fell $494,000 or 30.5% compared to the same period last year. The decrease in average borrowings was due to an increase in cash collections offset in part by an increase in inventory investment during the quarter, in each case relative to the corresponding period last year.

You are urged to consider all such factors. In light of the uncertainty inherent in such forward-looking statements, you should not consider their inclusion to be a representation that such forward-looking matters will be achieved. Any forward-looking statements relating to the proposed transaction with Randa Accessories Leather Goods LLC, a Delaware limited liability company (“Randa”), discussed in this Form 10-Q are based on our current expectations, assumptions, estimates and projections and involve significant risks and uncertainties, including the many variables that may impact or are related to consummation of the transaction and the continuing determination of our board of directors that the transaction is in the best interests of all stockholders. We assume no obligation for updating any such forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking statements.