Clinton Group Expresses Disappointment with Lenox (LNX), Wants to Help With Turnaround

In an amended 13D filing on Lenox Group Inc. (NYSE: LNX), Clinton Group showed they bumped their stake in the company to 10.9% from 9.6%. The firm also disclosed a letter to the board of directors citing shareholder disappointment with previous management and the board's performance in guiding the company.

The firm urged the company to consult shareholders on, modification of the engagement of Carl Marks Advisory Group; offers of employment for senior management positions; capital structure and financing issues; and strategic transactions.

The firm said it would welcome an opportunity to help facilitate the company's turnaround and exploration of strategic ideas by providing three director candidates for shareholder consideration.

A Copy of the Letter:

Mr. Kasen:

We have the utmost respect for the Carl Marks Advisory Group and are comfortable that they will address the short-term issues facing Lenox Group Inc.(the "Company") in a timely matter. Overall, as reflected in the decline in your stock price as well as the apparent turnover of your ownership base ,shareholders are clearly disappointed with both previous management and the board's performance in guiding the Company.

We would hope that material changes will be forthcoming at the Company. However, we urge that the decision on such changes not be made by the Board in a vacuum without first consulting with the Company's owners - its shareholders -at least with respect to the following matters:

* Extension, termination or change in scope regarding the engagement or agreement with Carl Marks;

* Offers of employment for senior management positions;

* Any capital structure and/or financing related issues; and

* Any strategic transaction(s) potentially being contemplated.

To the extent such information sharing requires a non-disclosure agreement, we, as the Company's second largest shareholder, would be willing to entertain reasonable confidentiality restrictions.

Additionally, we do not expect and would be opposed to any negative changes in corporate governance, including the renewal of the soon to expire poison pill.

Your annual meeting date has not yet been announced. We would welcome an opportunity to help facilitate the Company's turnaround and exploration of strategic ideas as a significant voice on the board of directors. We believe that your shareholders should be represented by directors who have a meaningfuleconomic interest in the Company. We are unaware of existing board members' plans regarding the upcoming meeting, but to the extent certain members are contemplating stepping down, we would welcome the opportunity to provide three director candidates for shareholder consideration.

Please feel free to contact me at (212) XXX-XXXX regarding the above-mentioned matters at your convenience.

CLINTON GROUP INC.
Conrad L. Bringsjord
Managing Director

Clinton Group Raises Stake in Lenox Group (LNX) to 9.6%

In an amended 13D filing on Lenox Group Inc. (NYSE: LNX), Clinton Group disclosed a 9.6% stake (1.35 million shares) in the company. This is up from the 8.1% stake the firm disclosed in a 02/16 filing and is up from the 6.8% stake disclosed in the original 02/12 13D filing.

Clinton Group Raises Stake in Lenox Group (LNX) to 8.1%

In a 13D filing on Lenox Group Inc. (NYSE: LNX), Clinton Group disclosed an 8.1% stake (1.148 million shares) in the company. This is up from the 6.8% stake the firm disclosed in the original 02/12 13D filing.
In the original 13D filing, the firm said it has no present plan or proposal that would relate to or result in any of the matters set forth in subparagraphs (a)-(j) of Item 4 of Schedule 13D. The firm did not amended this section of the filing.

Clinton Group Accumulates a 6.8% Stake in Lenox Group (LNX)

In a 13D filing on Lenox Group Inc. (NYSE: LNX), Clinton Group disclosed a 6.8% stake (958K shares) in the company. In the firm's 13F for the quarter ended September 30, 2006 no stake in LNX was shown.

The firm said it has no present plan or proposal that would relate to or result in any of the matters set forth in subparagraphs (a)-(j) of Item 4 of Schedule 13D.

Shares of LNX were crushed in January following the depauture of Chairwoman and CEO Susan E. Engel and news of steep losses.

John Morgan Throws In the Towel on Lenox Group (LNX) Following CEO Departure

In an amended 13D filing on Lenox Group, Inc. (NYSE: LNX), John Morgan disclosed a 1.35% stake (191K shares) in the company. This is down from the 6.9% stake (969K shares) the firm disclosed in December.

In the past, Morgan was looking to take a leadership role on the Company's Board of Directors, but said his offer to assist the Company in changing its strategy was rejected.

The latest filing shows that Morgan started selling stock on December 18th, but completely threw in the towel on January 5th, selling 678K shares at $4.28, after it was announced that Susan E. Engel, Chairwoman and Chief Executive Officer, stepped down. The company also said it expects that its 2006 net loss from continuing operations, excluding certain unusual items, will be between $(0.20) to $(0.30) per share.

Shares of Lenox have plummeted since the announcement, plunging from $6.63 to its current price of $2.95.

It appears Morgan took a hefty loss on the stake. In the original filing, Morgan disclosed buying the initially disclosed 703K shares in the high $6s to high $7s.