1359841--9/28/2006--Hanesbrands

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We operate in a highly competitive and rapidly evolving market, and our market share and results of operations could be adversely affected if we fail to compete effectively in the future. If we fail to manage our inventory effectively, we may be required to establish additional inventory reserves or we may not carry enough inventory to meet customer demands, causing us to suffer lower margins or losses. Sales of and demand for our products may decrease if we fail to keep pace with evolving consumer preferences and trends. We rely on a relatively small number of customers for a significant portion of our sales, and the loss of or material reduction in sales to any of our top customers would have a material adverse effect on our business, results of operations and financial condition. We generally do not sell our products under contracts, and, as a result, our customers are generally not contractually obligated to purchase our products. Further consolidation among our customer base and continued growth of our existing customers could result in increased pricing pressure, reduced floor space for our products and other changes that could be harmful to our business. Our customers generally purchase our products on credit, and as a result, our results of operations and financial condition may be adversely affected if our customers experience financial difficulties. International trade regulations may increase our costs or limit the amount of products that we can import from suppliers in a particular country. Significant fluctuations and volatility in the price of cotton and other raw materials we purchase may have a material adverse effect on our business, results of operations and financial condition. We incurred substantial indebtedness in connection with the spin off, which subjects us to various restrictions and could decrease our profitability and otherwise adversely affect our business. As a result of our substantial indebtedness, we may not have sufficient funding for our operations and capital requirements. To service our substantial debt obligations we may need to increase the portion of the income of our foreign subsidiaries that is expected to be remitted to the United States, which could significantly increase our income tax expense. If we fail to meet our payment or other obligations under some of our credit facilities, the lenders could foreclose on, and acquire control of, substantially all of our assets. Our supply chain relies on an extensive network of foreign operations and any disruption to or adverse impact on such operations may adversely affect our business, results of operations and financial condition. The loss of one or more of our suppliers of finished goods or raw materials may interrupt our supplies and materially harm our business. We may suffer negative publicity if we or our third-party manufacturers violate labor laws or engage in practices that are viewed as unethical or illegal. We have approximately 49,000 employees worldwide, and our business operations and financial performance could be adversely affected by changes in our relationship with our employees or changes to U.S. or foreign employment regulations. Due to the extensive nature of our foreign operations, fluctuations in foreign currency exchange rates could negatively impact our results of operations. We have significant unfunded employee benefit liabilities; if assumptions underlying our calculation of these liabilities prove incorrect, the amount of these liabilities could increase or we could be required to make contributions to these plans in excess of our current expectations, both of which could have a negative impact on our cash flows, liquidity and results of operations. We are prohibited from selling our Wonderbra and Playtex intimate apparel products in the EU, as well as certain other countries in Europe and South Africa, and therefore are unable to take advantage of business opportunities that may arise in such countries. The success of our business is tied to the strength and reputation of our brands, including brands that we license to other parties. If other parties take actions that weaken, harm the reputation of, or cause confusion with our brands, our business, and consequently our sales and results of operations, may be adversely affected. We design, manufacture, source and sell products under trademarks that are licensed from third parties. If any licensor takes actions related to their trademarks that would cause their brands or our company reputational harm, our business may be adversely affected. Risks Related to Our Spin Off from Sara Lee If the IRS determines that the spin off does not qualify as a tax-free distribution or a tax-free reorganization, we may be subject to substantial liability. We have no operating history as an independent company upon which our performance can be evaluated and accordingly, our prospects must be considered in light of the risks that any newly independent company encounters. Our historical financial information is not necessarily indicative of our results as a separate company and therefore may not be reliable as an indicator of our future financial results. We and Sara Lee will provide a number of services to each other pursuant to the Master Transition Services Agreement. When the Master Transition Services Agreement terminates, we will be required to replace Sara Lee s services internally or through third parties on terms that may be less favorable to us. We agreed with Sara Lee to certain restrictions in order to comply with U.S. federal income tax requirements for a tax-free spin off and we may not be able to engage in acquisitions and other strategic transactions that may otherwise be in our best interests. The terms of our spin off from Sara Lee, anti-takeover provisions of our charter and by-laws, as well as Maryland law and our stockholder rights agreement, may reduce the likelihood of any potential change of control or unsolicited acquisition proposal that you might consider favorable.

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1359841--9/28/2006--Hanesbrands_Inc.