Tarrant Apparel Group (Nasdaq:TAGS), a provider of private label casual apparel, announced today that it is to revise a previous agreement with Tex Transas Textile S.A. de C.V, which was commissioned in late 1998 by the company to oversee construction of its twill plant. Under the terms of the amended agreement, Tarrant Apparel has extended its option to purchase the facility from Tex Transas Textile to September 2002. From the completion of construction, through September 2002, TransInternational Textile, a company operated by Kamel Nacif, the owner of Tex Transas Textile, will operate the twill mill. Tarrant Apparel will operate the garment-processing center and distribution facilities upon completion of construction. Tarrant Apparel and Tex Transas Textile have entered a production agreement, which gives Tarrant Apparel the first right of all production capacity of the mill. During this time, Tex Transas Textile will have the option to sell the unused capacity of the twill mill to any third party. Gerard Guez, chairman and CEO, said: "We believe that amending our agreement with Tex Transas Textile is the right decision. Through September 2002, the revised agreement will give Tarrant ample time to gear up marketing of the plant; greater financial flexibility by eliminating added depreciation, interest expense, and debt related to the purchase; the opportunity to benefit from the experience of running Jamil, which in its sixth quarter of operation will begin running at full capacity in the fourth quarter; and the ability to more aggressively compete in light of the CBI law, which was recently passed." Mr Guez concluded: "Tarrant Apparel remains committed to executing its long-term vertical integration strategy without compromising our operating performance and financial flexibility. Looking ahead, we believe this amended agreement better positions us to successfully achieve these goals and maximise shareholder value."