accounting rules applicable to publicly-traded companies even though Frederick’s is a private company. The application of these rules to the historical financial statements of Frederick’s, specifically the application of ‘‘push down’’ or ‘‘purchase’’ accounting rules due to a change of control of Frederick’s effective March 3, 2005, has taken significantly longer than originally expected. Since Frederick’s has not delivered its audited financial statements by the date provided for in the Merger Agreement, we have the right to terminate the Merger Agreement, however, we presently do not intend to exercise this right.

MOVIE STAR, INC. designs, manufactures (through independent contractors), imports, markets and distributes women’s intimate apparel, including sleepwear, robes, leisurewear and daywear, to mass merchandisers, specialty and department stores, discount retailers, national and regional chains and direct mail catalog marketers throughout the United States. Current collections include the Cinema Etoile premium line of intimate apparel and the Movie Star line of apparel sold as private label programs.

In connection with the transactions contemplated by the Merger Agreement, the Company will prepare a proxy statement for the Company’s shareholders to be filed with the Securities and Exchange Commission (‘‘SEC’’). Before making any voting decision, the Company’s shareholders are urged to read the proxy statement carefully in its entirety when it becomes available because it will contain important information about the proposed transaction. The Company’s shareholders and other interested parties will be able to obtain, without charge, a copy of the proxy statement (when available) and other relevant documents filed with the SEC from the SEC’s website at http://www.sec.gov. The Company’s shareholders and other interested parties will also be able to obtain, without charge, a copy of the proxy statement and other relevant documents (when available) by directing a request by mail or telephone to Movie Star, Inc., 1115 Broadway, New York, NY 10010, telephone: (212) 798-4700.

The Company and its directors and officers may be deemed to be participants in the solicitation of proxies from the Company’s shareholders with respect to the transactions contemplated by the Merger Agreement. Information about the Company’s directors and executive officers and their ownership of the Company’s common stock is set forth in the proxy statement for the Company’s 2005 Annual Meeting, which was filed with the SEC on October 25, 2005. Shareholders and investors may obtain additional information regarding the interests of the Company and its directors and executive officers in the transactions contemplated by the Merger Agreement, which may be different than those of the Company’s shareholders generally, by reading the proxy statement and other relevant documents regarding the transactions contemplated by the Merger Agreement, which will be filed with the SEC.

Certain of the matters set forth in this press release are forward-looking and involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially are the following: business conditions and growth in the industry; general economic conditions; addition or loss of significant customers; the loss of key personnel; product development; competition; risks of doing business abroad; foreign government regulations; fluctuations in foreign rates; rising costs for raw materials and the unavailability of sources of supply; the timing of orders booked; failure to realize the merger’s anticipated synergies; approval of the transactions by Movie Star’s shareholders and satisfaction of various other conditions to the closing of the merger contemplated by the merger agreement; and the other risks that are described from time to time in Movie Star’s SEC reports.

[Tables follow]

MOVIE STAR, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In Thousands, Except Share Information)


	March 31, 2007				June 30, 2006*				March 31, 2006
	(Unaudited)								(Unaudited)
Assets
Current Assets
Cash		$	82			$	203			$	134
Receivables, net			6,647				6,074				9,529
Inventory			8,115				8,981				6,431
Deferred income taxes			1,725				1,914				1,782
Prepaid expenses and other current assets			126				801				2,249
Total current assets			16,695				17,973				20,125
Property, plant and equipment, net			994				838				727
Deferred income taxes			3,198				3,296				2,606
Goodwill			537				537				537
Assets held for sale			—				174				174
Other assets			358				403				425
Total assets		$	21,782			$	23,221			$	24,594
Liabilities and Shareholders’ Equity
Current Liabilities
Note payable		$	3,477			$	4,955			$	6,626
Current maturities of capital lease obligations			56				—				—
Accounts payable and other current liabilities			2,912				4,086				2,321
Total current liabilities			6,445				9,041				8,947
Long-term liabilities			400				398				384
Shareholders’ equity
Common stock, $.01 par value − authorized 30,000,000 shares;
issued 18,439,000 shares at March 31, 2007, 17,755,000 shares at June 30, 2006 and 17,736,000 shares at March 31, 2006			184				178				177
Additional paid-in capital			5,518				4,834				4,808
Retained earnings			12,870				12,361				13,876
Accumulated other comprehensive (loss) income			(17	)			27				20
Treasury stock, at cost − 2,017,000 shares			(3,618	)			(3,618	)			(3,618	)
Total shareholders’ equity			14,937				13,782				15,263
Total liabilities and shareholders’ equity		$	21,782			$	23,221			$	24,594

* Derived from audited financial statements.

MOVIE STAR, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In Thousands, Except Per Share Amounts)


	Three Months Ended March 31,								Nine Months Ended March 31,
	2007				2006				2007				2006
Net sales		$	13,786			$	11,940			$	50,000			$	43,444
Cost of sales			9,472				8,689				33,801				31,199
Gross profit			4,314				3,251				16,199				12,245
Selling, general and administrative expenses			4,301				4,114				13,368				12,426
Merger related fees			610				—				1,952				—
Gain on sale of property, plant and equipment			—				—				(496	)			—
Insurance recovery			—				(1,424	)			—				(1,424	)
(Loss) income from operations			(597	)			561				1,375				1,243
Interest expense			127				99				526				383
(Loss) income before provision for income taxes			(724	)			462				849				860
(Benefit from) provision for income taxes			(289	)			186				340				345
Net (loss) income		$	(435	)		$	276			$	509			$	515
BASIC NET (LOSS) INCOME PER SHARE		$	(.03	)		$	.02			$	.03			$	.03
DILUTED NET (LOSS) INCOME PER SHARE		$	(.03	)		$	.02			$	.03			$	.03
Basic weighted average number of shares outstanding			16,372				15,717				15,978				15,687
Diluted weighted average number of shares outstanding			16,372				15,824				16,467				15,774

INVESTOR RELATIONS:

Movie Star, Inc.

SM Berger & Company, Inc.

Thomas Rende, CFO

Stanley Berger

(212) 798-4700

(216) 464-6400