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    Harry's Farmers Market Inc. Announces Net Loss in Second Quarter

    Harry's Farmers Market Inc. on Monday reported results for the second quarter of fiscal 2002 ending August 1, 2001. The company had a net loss applicable to common shareholders for the second quarter of fiscal 2002 of approximately $0.9 million or ($0.15) per common share.

    Harry's Farmers Market Inc. on Monday reported results for the second quarter of fiscal 2002 ending August 1, 2001. The company had a net loss applicable to common shareholders for the second quarter of fiscal 2002 of approximately $0.9 million or ($0.15) per common share, compared to a net loss applicable to common shareholders of approximately $1.1 million or ($0.18) per common share for Second Quarter of Fiscal 2001.

    In addition, for the 26 weeks ended August 1, 2001, the Company had a net loss applicable to common shareholders of approximately $1.8 million or ($0.29) per common share, compared to a net loss applicable to common shareholders of approximately $2.3 million or ($0.37) per common share for the 26 weeks ended August 2, 2000. Included in the loss applicable to common shareholders for the first half of Fiscal 2001 is an extraordinary loss of approximately ($0.3) million relating to the early retirement of debt. There was no such extraordinary charge during the recently completed comparable period.

    In addition, the Company reported that net sales decreased to approximately $33.3 million in the Second Quarter of Fiscal 2002 from approximately $35.3 million in the Second Quarter of Fiscal 2001. For the 26 weeks ended August 1, 2001, the Company reported net sales of approximately $64.4 million compared to approximately $70.2 million for the twenty-six weeks ended Aug. 2, 2000. Management believes these decreases are due primarily to a continued trend of competitive stores opening near existing Harry's Farmers Market and Harry's In A Hurry locations, as well as a general economic downturn in the entire retail sales industry.

    The Company previously announced an agreement to sell its three megastores and support facilities to Whole Foods Market Group Inc., a wholly-owned subsidiary of Whole Foods Market Inc., for approximately $35 million in cash. Approximately $23 million of the proceeds will be used to pay off and retire the company's credit facility with Back Bay Capital and pay transaction fees. Included in the sale are all assets relating to the Alpharetta, Cobb and Gwinnett megastores, including but not limited to the real estate, the Harry's Farmers Market name, distribution center, commissary kitchen, bakery and office facilities. The six ``Harry's in a Hurry'' food stores are not included in the transaction. The Company retains the use of the ``Harry's in a Hurry'' name through a license from Whole Foods along with the right to operate and grow these stores in the United States. The transaction is expected to close in November and is subject to approval of the Company's shareholders and other customary closing conditions.

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