HKF Hancock Fabrics

BALDWYN, Miss., March 5 /PRNewswire-FirstCall/ -- Hancock Fabrics (Pink Sheets: HKFI) disclosed today that PIN pad units at a limited number of Hancock Fabrics' stores were stolen and replaced with visually identical, but fraudulent PIN pad units during the August-September, 2009 timeframe. As a result, certain account information and PIN numbers used at these locations may have been unlawfully acquired by third parties. While the number of potentially affected stores involved in this situation is limited, the data accessed may have included customer information such as the name printed on a customer's payment card, the card number, the card expiration date, and/or a PIN number when one was entered in a PIN debit transaction. It is important to note however that this theft does not involve customers' social security numbers. To ensure that customers can confidently shop all Hancock Fabrics' stores, the company replaced every PIN pad unit in all of its stores with an upgraded model. In addition, the company has implemented additional layers of security, including installing automated systems that resist tampering and continuously monitor the PIN pad unit devices for any suspicious activity. As this was a violation of both civil and criminal laws, the company is working closely with federal and local law enforcement officials and the major payment card brands on the investigation of this situation to ensure that the perpetrators are apprehended. "Hancock Fabrics highly values the privacy and security of customer data," said Jane F. Aggers, president and chief executive officer. "We deeply regret that the theft and replacement of PIN pad units at an isolated number of stores has inconvenienced any of our customers. We have already taken action to ensure our customers can continue to shop confidently and securely at Hancock Fabrics' stores throughout the U.S." As a precautionary measure, Hancock Fabrics recommends that consumers review their account statements and credit reports closely. If you detect any suspicious activity on an account, you should promptly notify the financial institution or company with which the account is maintained. You also should promptly report any fraudulent activity or any suspected incidence of identity theft to the appropriate law enforcement authorities, including the Federal Trade Commission. Consumers may also consider placing a fraud alert on their credit report. This fraud alert statement informs creditors to possible fraudulent activity and requests that the creditor contact you prior to establishing any accounts in your name. To place a fraud alert on your credit report, call any one of the three credit bureaus at the numbers provided below and follow the "Fraud Victim" instructions. The one you call will notify the others to place the alert. When you call the credit bureau fraud line, you will be asked for identifying information and will be given the opportunity to enter a phone number for creditors to call. You may want to make this your cell phone number for convenience in responding to such calls. -- Trans Union - 1-800-680-7289 -- Experian - 1-888-397-3742 -- Equifax - 1-800-525-6285 Hancock Fabrics is providing additional information and resources on the company's Web site at http://www.hancockfabrics.com/openletter as well as offering a toll-free telephone number, 877-322-7427 available 8:00 a.m. - 5:00 pm CT daily for customer questions and assistance. About Hancock Fabrics Hancock Fabrics, Inc. is committed to being the inspirational authority in fabric and sewing, serving creative enthusiasts with a complete selection of fashion and home decorating textiles, sewing accessories, needlecraft supplies and sewing machines. The Company currently operates 266 retail stores in 37 states and an Internet store at http://www.hancockfabrics.com/. Comments in this news release that are not historical facts are forward-looking statements that involve risks and uncertainties which could cause actual results to differ materially from projections. These risks and uncertainties include, but are not limited to, general economic trends, adverse discounting actions taken by competitors, changes in consumer demand or purchase patterns, delays or interruptions in the flow of merchandise between the Company's suppliers and/or its distribution center and its stores, tightening of purchase terms by suppliers and their factors, a disruption in the Company's data processing services and other contingencies discussed in the Company's Securities and Exchange Commission filings. Hancock undertakes no obligation to release revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission. DATASOURCE: Hancock Fabrics CONTACT: Robert W. Driskell, Executive Vice President & Chief FinancialOfficer of Hancock Fabrics, Inc., +1-662-365-6112,rdriskell@hancockfabrics.com Web Site: http://www.hancockfabrics.com/

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