REDMOND, Wash.--(BUSINESS WIRE)--May 21, 1999--Garden Botanika, Inc. (OTC BB:GBOT) today reported operating results for the fourth quarter and the fiscal year ended Jan. 30, 1999 ("fiscal 1998"). The results include significant charges due to the Company's decision to close unprofitable store locations, as well as the Company's recognition of certain long-lived asset impairments as a result of an evaluation of store locations and other fixed assets. For the fourth quarter, sales decreased 11% to $39.58 million from $44.52 million in the fourth quarter of fiscal 1997. Store sales decreased 12% as a result of a 9% decline in comparable store sales (for stores open at least one complete fiscal year) and a decrease in the number of stores from 273 to 252. Garden Botanika, which has been operating under bankruptcy court protection since April 20, 1999, reported a net loss of $27.05 million, or $3.82 per share, for the fourth quarter of fiscal 1998, compared to net loss of $2.28 million, or $0.32 per share, in the fourth quarter of fiscal 1997. The reported net loss for the quarter includes the recognition of long-lived asset impairments of $20.1 million. Upon review of its asset base following the holiday season, the Company recorded this charge at the end of fiscal 1998 to reflect potential impairment of long-lived asset values at 118 store locations in accordance with the provisions of Statement of Financial Accounting Standards No. 121. As previously announced, the Company has closed or has retained a liquidator to close 95 of the stores whose carrying values were reduced as impaired and were included in the $20.1 million charge. For the fiscal year, sales decreased 10% to $102.82 million from $114.59 million in fiscal 1997. This decline was due primarily to a 13% decrease in comparable store sales, which was partially offset by the recognition of revenue of $1.0 million from annual memberships in the Company's discount-based customer loyalty program (based on total membership sales of $2.7 million), and commercial sales of $940,000. Catalog sales declined 26% on a planned reduction in circulation. Garden Botanika reported a net loss of $48.03 million, or $6.79 per share on approximately 7.07 million shares for fiscal 1998, compared to a net loss of $15.58 million, or $2.20 per share on the same number of shares, in fiscal 1997. Results for the year were negatively impacted by the asset impairment, discussed above, by charges for store closings in the amount of $7.3 million and by the 13% decline in comparable store sales. An additional charge of approximately $7.0 million will be recorded in the first quarter of fiscal 1999 to cover the estimated additional costs for current store closures and related lease termination expenses. Garden Botanika markets botanically based cosmetic and personal care products through its 150 stores across the U.S. and its own catalog. The Company's headquarters are located at 8624-154th Avenue NE, Redmond, Washington 98052, and its website address is www.gardenbotanika.com.  