FOR IMMEDIATE RELEASE


  EMPIRE OF CAROLINA ANNOUNCES SALE OF SUBSTANTIALLY ALL OF ITS TOY OPERATIONS

Delray Beach, FL; July 3, 2001 - Empire of Carolina, Inc. (Other OTC: EMPIQ)
announced today that on June 29, 2001, it and two of its subsidiaries, Empire
Industries, Inc. and Empire Toys (HK), Ltd., sold substantially all of the
Company's toy operations to Alpha International, Inc., including the "Buddy L,"
Grand Champions, Big Wheels, Yo-Yo lzantBalls, D-Cell Ride On's and Crocodile
Mile Waterslides and Sprinklers product lines. Alpha also acquired various
licenses, intellectual property, executory contracts and existing inventory
located in the United States and Hong Kong and all of its right, title and
interest to the capital stock of Empire Toys (HK), Ltd.. The purchase price for
the assets was $6.25 million paid in cash to the Company and the assumption by
Alpha of certain related liabilities in the approximately amount of $1.5
million. Alpha also provided substitute cash collateral and a substitute letter
of credit to replace Empire Toys (HK)'s existing $3,000,000 (HKD) credit
facility. The proceeds of sale will be used to partially satisfy the secured
debt of La Salle National Bank, N.A., as agent for itself and certain other
banks, partially fund a distribution to unsecured creditors, and allow for the
payment and performance of the remaining administrative claims and obligations
in the Chapter 11 Cases.

Empire of Carolina and Empire Industries filed for reorganization under Chapter
11 on November 17, 2000 and have continued operations on a debtor-in-possession
basis. On May 25, 2001, they filed an emergency motion with the Bankruptcy Court
for the Southern District of Florida (Judge Paul G. Hyman) seeking court
authorization to sell substantially all of their assets to Alpha. On June 1,
2001, the sale was preliminarily approved by the U.S. Bankruptcy Court
contingent upon receipt of higher bids. The final hearing on the proposed sale
was held before Judge Hyman on Wednesday, June 27, 2001. At the hearing, Alpha
submitted the highest and best offer for the assets, with a bid of $6,250,000.00
and an obligation to assume certain liabilities of the Company. One other
company submitted a lower bid at the hearing for substantially all of the
Company's assets, and two other bidders submitted "partial" competing bids
(i.e., bids for less than substantially all of the Company's assets) that also
were not accepted.

Empire Toys (HK), Ltd. has not filed for relief under the U.S. Bankruptcy Code.

This release contains certain forward-looking statements and information that
are based on management's beliefs, as well as assumptions made by and
information currently available to management. Such statements are subject to
various risks and uncertainties, including the ability of the Company to fund
and execute a new operating plan for the Company. The Company undertakes no
obligation to update any such factors or to publicly announce the result of any
revisions to any of the forward-looking statements contained herein to reflect
future events or developments.

CONTACT: Empire of Carolina, Inc., 561-498-4000.