HKF Hancock Fabrics

The Board of Directors of Hancock Fabrics, Inc. (NYSE:HKF), at a meeting held September 7, 2005, declared a cash dividend of 6 cents per share on the outstanding common shares, payable October 15, 2005 to shareholders of record October 1, 2005. Hancock also reported that the inventory, fixtures and equipment for one store was destroyed by Hurricane Katrina, while the status of a second store is uncertain. In total, fifteen of the Company's stores were closed for at least one full day, and six of those remain closed. Hancock will be addressing insurance claims in the next few weeks. Jane Aggers, Chief Executive Officer, stated, "Our top priority is the health and safety of our associates and their families." Hancock Fabrics, Inc. is a specialty retailer of fabric and related home sewing and decorating accessories. The Company operates 447 retail fabric stores in 43 states and operates an internet store under the domain name, www.hancockfabrics.com.