HKF Hancock Fabrics

Hancock Fabrics, Inc. (NYSE: HKF), today reported that sales in the five-week period ended December 30, 2006 totaled $41.8 million, compared to $48.3 million in the same period of the prior year. The decrease in total sales was due to having 43 fewer stores this year and a decline in comparable store sales of 7.2% in December. In the first two months of the fourth quarter, total sales were $76.6 million versus $86.4 million a year ago, and comparable sales were down 5.3%. Year-to-date, total sales were $353.2 million versus $371.4 million in 2005. Comparable store sales in the eleven months to date declined 1.8%, including a 2.9% benefit from 40 stores that had been liquidated by the end of August in connection with store closing sale events and two other stores that closed earlier this month. Hancock Fabrics, Inc. � America's Fabric Store � is committed to serving creative enthusiasts with a complete selection of fashion and home decorating textiles, sewing accessories, needlecraft supplies and sewing machines. The Company operates 403 retail stores in 40 states and an Internet store at www.hancockfabrics.com.