Dear Customers and Associates,

Due to shortages of leather caused by tanneries closing in Asia, there will be adjustments in shipment dates as well as product price points in the coming months for split-leather gloves. Also, due to the worldwide rise in value of oil and petroleum, there will also be price increases of PVC-coated gloves.

Since the beginning of 2007, the Chinese economy has experienced increased inflation, which in turn has forced wages to increase by 20-25%. The increase in wages allows for improved quality of life for Chinese workers. Furthermore, the Chinese economy has experienced labor shortages which have impacted the manufacturing and exporting of leather products.

Commencing July 1, 2007, the Chinese government adopted a new export policy to control the surplus of foreign trade and reduce the export of high-pollution, high-energy-consumption goods to improve environmental conditions of the entire country and planet. Upon implementation of these policies, the Chinese government has decreased the tax rebate previously offered to leather product manufacturers from 13.5% to 5%. Simultaneously, grain leather prices have increased by 30-37% due to a genuine product shortage and increased demand. Compounding the situation further, environmental initiatives have resulted in the closure of many leather tanners who were in violation of pollution standards.

The culmination of these issues has greatly impacted the material costs of leather imports on orders placed earlier this year. Along with these price increases, there have also been considerable shipment delays. Production times on split leather products now ranges from 75-90 days; and grain leather and deerskin products from 90-120 days.

Due to these extenuating circumstances, it is expected that we will see delays in leather product shipments as well as price point increases effective January 1, 2008. Given that Watson Gloves has not increased prices for many years, we will still be providing you with long-lasting, high quality products at affordable prices.

Watson Gloves has ensured the unparalleled quality of work glove distribution for the last 90 years. We thank you for your understanding in this matter and hope to continue providing you with top-quality products and alternatives that suit your needs for another 90 years.

Sincerely,

Martin Moore/President

Watson Gloves