Lenox Group (LNX) Holder Morgan Discloses 7% Stake, Dissatisfaction with Board

Shares of Lenox Group Inc. (NYSE: LNX) are higher today following an amended 13D filing from holder John Morgan and related parties. Morgan disclosed a 7% stake (989K shares) in the company and a letter the Company's Chairwoman and CEO Susan Engel. In the letter, Morgan said, "I now feel that the Board has decided to pursue a course of action that is not in the best interests of the shareholders and is a continuation of the strategies that have failed to create value over the past ten years."

Shares of Lenox Group are about 6% higher to $6.48 in mid-day action Thursday.

A Copy of the Letter:

September 20, 2006

Ms. Susan E. Engel

Chairwoman and Chief Executive Officer

The Lenox Group, Inc.

6436 City West Parkway

Eden Prairie, MN 55344

Dear Susan,

When your board offered me a directorship on September 18, 2006, we discussed the reasons that made it unacceptable. At that time, I reiterated that I could best serve the shareholders of Lenox Group by assuming a leadership role on the Board of Directors and playing an active role in formulating and guiding the strategic direction of the Company. Furthermore, I expressed my intention to not make changes in the management or Board of Directors. My views were based on information I had at that time.

The Board’s rejection of my offer to help the Company create a successful strategy has given me a different perspective. I now feel that the Board has decided to pursue a course of action that is not in the best interests of the shareholders and is a continuation of the strategies that have failed to create value over the past ten years.

The management team and Board of Directors continue to behave like the Company is a large, successful Company that has margin for making more mistakes. I do not agree. My offer to assist the Company in changing its strategy to benefit shareholders has been rejected although I proposed to work with the existing management and Board of Directors. You have made your position clear and I hope this letter will do the same for me and other likeminded shareholders.

Very truly yours,

John L. Morgan

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