KWM
Kanen Wealth Management, LLC Philotimo Fund, L.P.
5850 Coral Ridge Drive, Suite 309 Coral Springs, FL 33321
P: (631) 863-3100 F: (631) 863-3103

April 26, 2017

New York & Company 330 W. 34th St., 9th Floor New York, NY 10001

Dear NWY Board of Directors and Executive Management,

We are writing to highlight the losing record of the board of
directors and company management. We want to formally express
our view that the results of the company and the share price have
been awful. The status quo is unacceptable; only a few people at
the top are benefiting from representation, while minority
shareholders are suffering at the bottom.
Over the last five months, through private discussions with
company management and the board, we have attempted to
amicably effect positive change at New York and Company
and are deeply frustrated with management's lack of action
and results to date. Maybe you view our 5% stake, as well
as other larger shareholder's ownership, less significant
than Irving Place Capital's ownership and not worthy of a
seat at the table.
We intend to vigorously represent ourselves, and perhaps
other non-Irving Place shareholders feel the same way.

Let us summarize the scorecard of events over the past 4 years:

1) Stock performance on a relative basis - In July of 2013 our
stock was approximately $6.72 a share. Currently the stock trades
at approximately $1.80 a share; this represents approximately
a 73% decline in value. During the same timeframe our
benchmark, XRT (S&P Retail ETF), is up 6.87% before dividends.
Over this period of 73% decline in stock price, executive
management has received modest base salary increases.
2) Four years ago, in calendar 2013 (FY14), our gross margin (GM)
was 28.15%, our selling, general, and administration expenses
(SG&A) as a percentage of total sales were 27.82% leaving
us with an operating margin of 0.33%.
3) If we fast forward 4 years to calendar year 2016 (FY17), our
GM was 28.41% and SG&A as a percentage of total sales was 30.07%
leaving us with a negative operating margin of 1.66%.
1)

During the aforementioned 4-year period, management has guided
for an engagement in cost saving initiatives in SG&A and COGS to
maximize profits and expand margins. These initiatives, however,
have failed to translate to the company's earnings performance.
During this period, the companies operating margins declined from
33 bps to negative 166 bps. Unfortunately, the numbers speak for
themselves.

4) Below are some quotes from earnings calls dating back 4 years
that demonstrate management and the boards failure to execute:

a) March 2013  "In addition, buying and occupancy costs decreased
by 180 basis points as a percentage of net sales, largely due to
the company's continued focus on cost savings and reduced rent
expenses." "So it's really a combination of the 3 channels of our
business that will get us back to that peak operating margin in
the high single digits."
b) December 2014 - "In connection with our analysis, we recently
initiated an organizational realignment, which included the
elimination of numerous positions in our corporate offices.
As a result of the organizational changes made, we expect to
save $9 million to $10 million in expenses, $1.5 million of
which will be realized in the fourth quarter of fiscal year 2014."
c) August 2015 - "Turning to Project Excellence, our productivity
initiative.
As you know, our goal of Project Excellence is to improve our overall
operational efficiency and productivity. At the same time, increase
gross margin and mitigate expense increases and investments and
growth areas of our business. As previously announced, we
launched a comprehensive business reengineering project in
late 2014, and we now expect Project Excellence to produce savings
of approximately $30 million on an annualized basis, which has
been revised upward from our prior estimate of $20 million to
$25 million."
d) December 2015 - "So ultimately, our target goal over a longer
period of time is to get back to the high single digit operating
margins."
e) March 2016  - "From a bottom line benefit, we continue to expect
Project Excellence to produce an estimated $15 million in savings
in 2016 on top of the savings already achieved in 2015."
f) May 2016 - "We continue to be pleased with the success of
Project Excellence to date. And while we are excited that these
savings begin flowing through directly to our bottom line in 2016,
we still remain very focused on identifying new opportunities to
reduce costs, increase our speed to market, increase efficiency and
improve profitability."

Gross Margins are unacceptable!

Here are gross margins for some of New York & Co.'s peers:
   * ASNA, 57.98%
   * FRAN, 46.93%
   * CATO, 37.07%
   * CHS, 38.23%
   * NWY at the bottom with a GM of 28.41%. Unacceptable!

Recommended Actions:

1) One new independent board member.

2) The formation of a special committee of independent directors
that represents minority shareholders (non-management, non-Irving
Place or have never worked at Irving Place) who's responsibility
will be to conduct an in-depth, comprehensive review of NWY's
operations for the purpose of maximizing gross profit and saving
on SG&A. Currently, there are 3 board members that work or have
worked at Irving Place Capital. We believe this would be an exercise
of "best practices" for corporate governance. This in-depth review
would satisfy and alleviate any concerns minority shareholders have
regarding their representation. It will also show us the company is
doing everything in its power to achieve its operating margin targets.

   3) An enhanced capital allocation strategy that returns more
cash to shareholders. We would like to highlight the many positives
NWY has potential to build upon:
1) Our enterprise value is only $39 million.
2) Our enterprise value is only 4% of revenue.
3) The growth potential of Eva Mendes and Gabrielle Union.
4) The balance sheet has over $76 million in net cash ~ $1.20
per share.
5) Our revised private label credit card deal which should generate
$10-11 million in incremental high margin royalties this year.
6) A solid brand.
7) A majority of the leases are less than 1-2 years.
8) Tailwinds and opportunities from competitors closing stores.
9) The potential to drive gross margins higher (currently, well
below peer group).
1)
10) Loyal customer base with over 40% of sales coming from private
label credit card.
11) Dedicated employees at the store level.

In summary, we are calling for: board representation that gives
non-Irving Place Capital shareholders a true seat at the table;
formation of a special committee, which is truly independent,
that will conduct an in-depth review of operations to drive GM's
up and SG&A expenses down; and an enhanced capital allocation strategy.

A very wealthy shareholder at the top has been amply represented for
years; we believe minority shareholders deserve appropriate
representation!


Sincerely,




Dave Kanen
President, Portfolio Manager Kanen Wealth Management, LLC
Philotimo Fund, L.P.
P: (631) 863-3100
E: dkanen@kanenadvisory.com