[LETTERHEAD OF GALEY & LORD]




[LOGO]                                             Contact: Leonard F. Ferro
                                                            (336) 665-3037


                  GALEY & LORD ANNOUNCES STRATEGIC INITIATIVES

GREENSBORO, NC, JULY 26, 2001/PRNewswire - Because of the continuing difficult
business environment, Galey & Lord, Inc. announced today that its Board of
Directors has approved the following actions:

     1.   The discontinuation of Galey & Lord Service Company, N.A., the
          Company's garment making operations in Mexico.

     2.   The consolidation of its greige fabrics operations which includes the
          closure of its Asheboro, North Carolina weaving facility and Caroleen,
          North Carolina spinning facility.

These operations will be phased out over the next several months.

In addition to these actions, the Company has undertaken reductions of its
salaried overhead of approximately 5%.

The Company anticipates pretax charges associated with these actions to be
between $70 million and $80 million, the majority of which are related to fixed
asset and goodwill impairments and are non-cash. Charges related to these
actions will occur principally in the September quarter 2001.

In conjunction with the above, the Company has scheduled a conference call with
investors and analysts to be broadcast live over the internet on Friday, July
27, 2001 at 10:00 a.m. Eastern Time with Arthur C. Wiener, CEO, and Leonard F.
Ferro, CAO, of Galey & Lord, Inc. All persons interested in accessing the
conference call may via the internet at
http://www.videonewswire.com/event.asp?id=546. Replay of the conference call
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will be available approximately 2-1/2 hours after the end of the call on the
internet at http://www.prnewswire.com or via telephone at 1-800-475-6701 (access
            -------------------------
code: 597120).

Galey & Lord is a leading global manufacturer of textiles for sportswear,
including cotton casuals, denim and corduroy, as well as a major international
manufacturer of workwear fabrics. The Company also is a manufacturer of dyed and
printed fabrics for use in home fashions.

This press release contains statements which constitute forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the


Securities Exchange Act of 1934, as amended. Those statements include statements
regarding the intent, belief of current expectations of the Company and its
management team. Prospective investors are cautioned that any such forward-
looking statements are not guarantees of future performance and involve risks
and uncertainties, and that actual results may differ materially from those
projected in the forward-looking statements. Such risks and uncertainties
include, among other things, competitive and economic factors in the textile,
apparel and home furnishings markets, raw materials and other costs, the level
of the Company's indebtedness, interest rate fluctuations, weather-related
delays, general economic conditions, governmental legislation and regulatory
changes, the long-term implications of regional trade blocs and the effect of
quota phase-out and lowering of tariffs under the WTO trade regulations and
other risks and uncertainties that may be detailed, from time-to time, in Galey
& Lord's reports filed with the Securities and Exchange Commission.