8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 23, 2006

BLAIR CORPORATION

(Exact name of registrant as specified in its charter)

___________________________________________

Delaware	001-00878	25-0691670
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer File Number)
220 Hickory Street, Warren, Pennsylvania (Address of principal executive offices)		16366-0001 (Zip Code)

Registrant’s telephone number, including area code: (814) 723-3600

Not Applicable

(Former name or former address, if changed since last report)

__________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

(17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

(17 CFR 240.13e-4(c))

Item 1.01Entry into a Material Definitive Agreement And Item 2.03Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On October 23, 2006, Blair Corporation (“Blair”) entered into a Second Amendment to Amended and Restated Credit Agreement by and among Blair and certain other parties thereto. Funds made available to Blair pursuant to the Credit Agreement are to be used for general corporate purposes and for the issuance of standby letters of credit to vendors.

The Amended and Restated Credit Agreement dated as of July 15, 2005, as amended, is by, between and among Blair, PNC Capital Markets, Inc. as lead arranger, PNC Bank, N.A. and three other lending institutions (as amended, the “Credit Agreement”). The Credit Agreement is guaranteed by Blair Holdings, Inc., Blair Payroll LLC, Blair Credit Services Corporation and Blair International Holdings, Inc., each a wholly owned subsidiary of Blair. The Credit Agreement provides for a secured first lien revolving credit and letter of credit facility. Upon the occurrence of an Event of Default (as such term is defined in the Credit Agreement), PNC and/or the other lending institutions may declare a default of the Credit Agreement and accelerate the loan pursuant to the terms thereof.

The collateral for the revolving credit facility consists of certain of Blair’s and its subsidiaries assets, including, but not limited to, inventory, equipment, furniture, general intangibles, intellectual property, fixtures, certain real property and improvements, the common stock of Blair’s domestic subsidiaries, as well as a negative and double negative pledge on the assets of Blair’s direct and indirect foreign subsidiaries. At Blair’s option, any loan under the revolving credit facility shall bear interest at the Euro-Rate (calculated with reference to a LIBOR-based formula in accordance with the Credit Agreement) or a Base Rate (as that term is defined in the Credit Agreement), plus a margin, such margin to be calculated in accordance with a performance based pricing grid. Blair is also required to pay a commitment fee, a letter of credit fee and reasonable out-of-pocket expenses pursuant to the Credit Agreement.

The Second Amendment to Amended and Restated Credit Agreement is attached to this report (without schedules or exhibits) as Exhibit 10.1 and is incorporated herein by reference.

Item 2.02Results of Operations and Financial Condition.

On October 24, 2006, the Company issued a press release announcing its earnings for the nine months ended September 30, 2006. The information contained in the press release, which is attached to this report as Exhibit 99.1, is incorporated herein by reference.

Item 7.01Regulation FD Disclosure.

The information contained in the press released attached to this report as Exhibit 99.1 is furnished pursuant to Item 7.01, “Regulation FD Disclosure.”

Item 9.01Financial Statements and Exhibits.

(a) Financial statements of businesses acquired.

Not applicable.

(b) Pro forma financial information.

Not applicable.

(c) Shell company transactions.

Not applicable.

(d) Exhibits.

Exhibit 10.1 Second Amendment to Amended and Restated

Credit Agreement dated October 23, 2006.

Exhibit 99.1 Press release dated October 24, 2006.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: October 24, 2006		BLAIR CORPORATION
By:	/S/ JOHN E. ZAWACKI
	John E. Zawacki
	President and Chief Financial Officer
By:	/S/ AL LOPEZ
	Al Lopez
	Senior Executive Officer, Chief Operations
	and Chief Financial Officer

EX-10

                                                                                                                                         EXHIBIT 10.1

SECOND AMENDMENT TO AMENDED AND RESTATED

CREDIT AGREEMENT

This Second Amendment to Amended and Restated Credit Agreement (the "Second Amendment") is dated as of October 23, 2006 and is made by and among BLAIR CORPORATION, a Delaware corporation (the "Borrower"), the Guarantors now or hereafter party thereto, the LENDERS under the Credit Agreement (as hereafter defined) and PNC BANK, NATIONAL ASSOCIATION, in its capacity as agent for the Lenders under the Credit Agreement (hereinafter referred to in such capacity as the "Agent").

RECITALS:

WHEREAS, the Borrower, the Guarantors, the Lenders and the Agent entered into that certain Amended and Restated Credit Agreement dated as of December 20, 2001, as amended and restated through July 15, 2005 and as further amended by that First Amendment thereto dated as of September 19, 2005 (as amended to date, the "Credit Agreement");

WHEREAS, the parties to the Credit Agreement desire to further amend the Credit Agreement as set forth herein; and

WHEREAS, capitalized terms used herein and not otherwise defined herein shall have the meanings given to them under the Credit Agreement.

NOW, THEREFORE, in consideration of the foregoing and intending to be legally bound, the parties hereto agree as follows:

1. Amendments to the Credit Agreement.

A. New Definitions.

The following new definitions shall be inserted in alphabetical order in Section 1.1 of the Credit Agreement:

"Book Value of Qualifying Fixed Assets shall mean the net book value of Qualifying Fixed Assets as of the most recently ended fiscal quarter.

Borrowing Base shall mean at any time the sum of (i) 45% of Qualified Inventory, and (ii) the lesser of (A) $10,000,000 or (B) 50% of the Book Value of Qualifying Fixed Assets. Notwithstanding anything to the contrary herein, upon thirty (30) days prior written notice from the Agent to the Borrower, the Required Lenders may, in their reasonable discretion based on customary or industry standards, at any time hereafter, increase or decrease the advance percentage for Qualified Inventory or the Book Value of Qualifying Fixed Assets, or increase the level of any reserves or ineligibles, or define or maintain such other reserves or ineligibles, as the Required Lenders may deem necessary or appropriate. Any such change shall become effective immediately upon written notice from the Agent to the Borrower for the purpose of calculating the Borrowing Base hereunder.

Borrowing Base Implementation Period shall mean the period from and after the Second Amendment Effective Date through the date after March 31, 2007 upon which two consecutive quarterly Compliance Certificates (which may include the Compliance Certificate delivered for the period ending March 31, 2007) are delivered pursuant to Section 8.3.4 [Certificate of Borrower] each of which evidences compliance with the Fixed Charge Coverage Ratio.

Inventory shall mean and include all of the Borrower’s now owned or hereafter acquired goods, merchandise and other personal property, wherever located, to be furnished under any consignment arrangement, contract of service or held for sale or lease, all raw materials, work in process, finished goods and materials and supplies of any kind, nature or description which are or might be used or consumed in the Borrower’s business or used in selling or furnishing such goods, merchandise and other personal property, and all documents of title or other documents representing them.

Qualified Inventory shall mean any Inventory which the Agent in its sole discretion determines to have met all of the minimum requirements set forth on Schedule 1.1(Q).

Qualifying Fixed Assets shall mean equipment and fixtures, subject to the following conditions

(i) the Loan Parties own such equipment;

(ii)such property is located on the owned or leased premises of the Loan Parties; and

(iii) the Agent has a Prior Security Interest in such property, free and clear of any Liens except for Permitted Liens.

Second Amendment Effective Date shall mean September 30, 2006."

B. Existing Definitions.

The following existing definition in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

"EBITDA for any period of determination shall mean (i) the sum of net income, depreciation, amortization, interest expense and income tax expense, plus (ii) non-recurring, non-cash charges to net income, minus (iii) non-recurring, noncash credits to net income, in each case of the Borrower and its Subsidiaries for such period determined and consolidated in accordance with GAAP;provided further that for any determination of EBITDA on or after the World Financial Sale, (1) EBITDA shall be adjusted to exclude from its calculation one time fees, expenses and charges to net income resulting from the World Financial Sale and the Tender Offer, (2) EBITDA shall be adjusted to exclude from its calculation any one time gain or loss from the World Financial Sale and the Tender Offer and (3) without duplication of items (1) and

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(2) above, EBITDA may be further adjusted by an add back thereto of actual severance as recorded in accordance with GAAP prior to December 31, 2007 relating to the severance of employees, provided that the total amount of such expenses added back does not exceed $6,000,000 during any consecutive four quarter period."

C. Revolving Credit Commitment.

Section 2.1.1 [Revolving Credit Commitment] of the Credit Agreement is hereby amended and restated to read as follows:

"2.1.1 Revolving Credit Commitment.

Subject to the terms and conditions hereof and relying upon the representations and warranties herein set forth, each Lender severally agrees to make Revolving Credit Loans to the Borrower at any time or from time to time on or after the date hereof to the Expiration Date provided that after giving effect to such Revolving Credit Loan the aggregate amount of Revolving Credit Loans from such Lender shall not exceed such Lender's Revolving Credit Commitment minus such Lender's Ratable Share of the Letters of Credit Outstanding and provided further that during the Borrowing Base Implementation Period, the aggregate amount of Revolving Credit Loans of all of the Lenders shall not exceed the lesser of (i) the Borrowing Base minus the Letters of Credit Outstanding and (ii) the aggregate Revolving Credit Commitment of all Lenders minus the aggregate amount of Letters of Credit Outstanding. Within such limits of time and amount and subject to the other provisions of this Agreement, the Borrower may borrow, repay and reborrow pursuant to this Section 2.1."

D. Borrowing Base.

A new Section 2.11 [Borrowing Base Exceeded] is hereby inserted into the Credit Agreement immediately after Section 2.10 to read as follows:

"2.11 Borrowing Base Exceeded.

Whenever the outstanding principal balance of Revolving Facility Usage exceeds the Borrowing Base, the Borrower shall make, within one (1) Business Day after the Borrower learns of such excess and whether or not the Agent has given notice to such effect, a mandatory prepayment of principal equal to the excess of the Revolving Facility Usage over the Borrowing Base, together with accrued interest on such principal amount."

E. Minimum EBITDA (Section 8.2.14).

Section 8.2.14 [Minimum EBITDA] is hereby amended and restated to read as set forth below.

"8.2.14 Minimum EBITDA.

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The Loan Parties shall not permit their EBITDA for the fiscal quarter ended December 31, 2006 to be less than the amount set forth on Schedule I hereto."

F. Minimum Fixed Charge Coverage Ratio (Section 7.2.16).

Section 8.2.16 [Minimum Fixed Charge Coverage Ratio] is hereby amended and restated to read as set forth below.

"8.2.16 Minimum Fixed Charge Coverage Ratio.

Commencing with the fiscal quarter ending March 31, 2007 and continuing each fiscal quarter thereafter, the Loan Parties shall not permit the Fixed Charge Coverage Ratio, calculated as of the end of each said fiscal quarter for the four (4) fiscal quarters then ended, to be less than the minimum ratio specified below during the period specified below:

Period	Minimum Ratio
March 31, 2007	1.25 to 1.0
June 30, 2007 and thereafter	1.40 to 1.0"

G. Borrowing Base Certificate.

A new Section 8.3.10 is hereby inserted into the Credit Agreement immediately following Section 8.3.9 to read as follows:

"8.3.10 Monthly Borrowing Base Certificates, Schedules of Accounts, Inventory and Payables.

As soon as available but in any event by the fifteenth (15th) Business Day of each fiscal month of the Borrower, a Borrowing Base Certificate as of the last day of the immediately preceding fiscal month in the form of Exhibit 8.3.10 hereto appropriately completed, executed and delivered by an Authorized Officer.

H. Other Schedules and Exhibits

The following additional schedule and exhibits are hereby added to the Credit Agreement in the form attached to this Second Amendment:

Schedules

SCHEDULE 1.1(Q) QUALIFIED INVENTORY

Exhibits

EXHIBIT 8.3.10 - BORROWING BASE CERTIFICATE

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The following exhibit to the Credit Agreement is hereby amended and restated to read as set forth in the form attached to this Second Amendment:

EXHIBIT 8.3.4 - QUARTERLY COMPLIANCE CERTIFICATE

2. Representations and Warranties.

A.Warranties Under the Credit Agreement. The representations and warranties of the Loan Parties contained in the Credit Agreement, after giving effect to the amendments herein contained, are true and correct on and as of the date hereof with the same force and effect as though made by the Loan Parties on such date, except to the extent that any such representation or warranty expressly relates solely to a previous date. The Loan Parties are in compliance with all terms, conditions, provisions, and covenants contained in the Credit Agreement, after giving effect to the amendments thereto on the date hereof.

B.Power and Authority; Validity and Binding Effect; No Conflict. Each Loan Party has full power to enter into, execute, deliver and carry out this Second Amendment, and such actions have been duly authorized by all necessary proceedings on its part. This Second Amendment has been duly and validly executed and delivered by each of the Loan Parties. This Second Amendment constitutes the legal, valid and binding obligation of each of the Loan Parties which is enforceable against such Loan Party in accordance with its terms. Neither the execution and delivery of this Second Amendment, nor the consummation of the transactions herein contemplated will conflict with, constitute a default under or result in any breach of (i) the terms and conditions of any organizational documents of any Loan Party or (ii) any Law or any material agreement or instrument or other obligation to which any Loan Party or any of its Subsidiaries is a party or by which any Loan Party or any of its Subsidiaries is bound, or result in the creation or enforcement of any Lien upon any property of any Loan Party or any of its Subsidiaries other than as set forth herein.

C.Consents and Approvals; No Event of Default. No consent, approval, exemption, order or authorization of any Person other than the parties hereto is required by any Law or any agreement in connection with the execution, delivery and carrying out of this Second Amendment. No event has occurred and is continuing and no condition exists or will exist after giving effect to this Second Amendment which constitutes an Event of Default or Potential Default.

3. Conditions to Effectiveness.

This Second Amendment shall be effective as of September 30, 2006; provided that each of the following conditions have been satisfied as of the date above first written:

A. Execution.

The Loan Parties, the Required Lenders and the Agent shall have executed this Second Amendment.

B. Fixed Charge Coverage Ratio. The Borrower shall have demonstrated to the satisfaction of the Agent that the Borrower's Fixed Charge Coverage Ratio

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calculated as of the Second Amendment Effective Date for the four fiscal quarters then ended is not less than 1.0 to 1.0. The Loan Parties hereby agree that failure to satisfactorily demonstrate such ratio shall make this Second Amendment ineffective and shall constitute an Event of Default under the Credit Agreement.

C. Fees and Expenses. The Borrower shall have paid to the Agent for the account of each of the Lenders a fee in the amount of .15% times such Lender's Commitment and all other fees and expenses due and payable, including reasonable fees of the Agent's counsel.

4. Covenant Relating to Inventory Appraisal. At the request of the Agent in its sole discretion, the Borrower shall deliver to the Agent and the Lenders an appraisal of the inventory of the Borrower within thirty (30) days after the request by the Agent and such appraisal shall be satisfactory to the Agent and the Lenders.

5. References to Credit Agreement, Loan Documents.

Any reference to the Credit Agreement or other Loan Documents in any document, instrument, or agreement shall hereafter mean and include the Credit Agreement or such Loan Document, including such schedules and exhibits, as amended hereby. In the event of irreconcilable inconsistency between the terms or provisions of this Second Amendment and the terms or provisions of the Credit Agreement or such Loan Document, including such schedules and exhibits, the terms and provisions of this Second Amendment shall control.

6. Force and Effect.

Each Loan Party a signatory hereto reconfirms, restates, and ratifies the Credit Agreement, and all other documents executed in connection therewith except to the extent any such documents are expressly modified by this Second Amendment and each Loan Party confirms that all such documents have remained in full force and effect since the date of their execution.

7. Governing Law.

This Second Amendment shall be deemed to be a contract under the laws of the Commonwealth of Pennsylvania and for all purposes shall be governed by and construed and enforced in accordance with the internal laws of the Commonwealth of Pennsylvania without regard to its conflict of laws principles.

8. Counterparts.

This Second Amendment may be signed manually or by facsimile in any number of counterparts each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

[SIGNATURE PAGES FOLLOWS]

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[SIGNATURE PAGE 1 OF 2 TO SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT]

The undersigned have executed this Second Amendment as of the day and year first above written.

BORROWER:

BLAIR CORPORATION

By:	/S/ ADELMO LOPEZ
Title:	Senior Vice President - CFO/COO

GUARANTORS:

BLAIR HOLDINGS, INC.

By:	/S/ MICHAEL DELPRINCE
Title:	President

BLAIR PAYROLL, LLC

By:	/S/ MICHAEL DELPRINCE
Title:	Secretary / Treasurer

BLAIR INTERNATIONAL HOLDINGS, INC.

By:	/S/ MICHAEL DELPRINCE
Title:	Treasurer

BLAIR CREDIT SERVICES CORPORATION

By:	/S/ ROGER ALLEN
Title:	Treasurer

[SIGNATURE PAGE 2 OF 2 TO SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT]

LENDERS:

PNC BANK, NATIONAL ASSOCIATION, individually and as Agent

By:	/S/ BENJAMIN DITSON
Title:	Vice President

LASALLE BANK NATIONAL ASSOCIATION

By:	/S/ SCOTT THICK
Title:	First Vice President

HSBC BANK USA, NATIONAL ASSOCIATION

By:	/S/ DOUGLAS SMITH
Title:	Vice President

FIFTH THIRD BANK

By:	/S/ JAMES JANOVSKY
Title:	Vice President

EX-99

                                                                                                                                 EXHIBIT 99.1

FOR IMMEDIATE RELEASE:

CONTACTS:

Blair Corporation Carl Hymans

Al Lopez, Sr. Vice President, COO & CFO G.S. Schwartz & Co

814-723-3600 212-725-4500

carlh@schwartz.com

BLAIR CORPORATION REPORTS THIRD QUARTER RESULTS

WARREN, Pa., (October 24, 2006) -- Blair Corporation (Amex: BL), (www.blair.com), a national multi-channel direct marketer of women's and men's apparel and home products, today announced results for the third quarter and nine months ended September 30, 2006.

Net sales for the third quarter ended September 30, 2006 were $89.5 million, a decrease of $8.6 million or 8.7%, compared to the $98.1 million recorded for the third quarter of 2005. Decreases in average selling prices accounted for $5.9 million of the $8.6 million decline in net sales. Average selling prices declined as the Company experienced higher than normal sales of products at lower price points and corresponding margins.

The Company reported a net loss of $1.1 million, or $0.30 per basic and diluted share, for the third quarter of 2006, compared to net income of $1.4 million or $.23 per basic and diluted share reported for the third quarter of 2005. Third quarter 2005 per share results reflect the reduction of weighted average shares outstanding as a result of the Company’s tender offer of 4.4 million outstanding shares on August 16, 2005.

Third quarter 2006 results reflect a decrease in general and administrative expenses of $7.9 million compared to third quarter 2005 levels. The reduction is primarily attributable to operational efficiencies, the elimination of prior year costs associated with Blair’s in-house credit program and costs incurred in August of 2005 for the tender offer. Also contributing to the lower reported expenses in 2006 are adjustments to several compensation plans that are based on reported results.

In November, 2005, Blair sold its credit portfolio to a third party provider. Net income and earnings per share results for the third quarter and first nine months of 2006 reflect the impact of the transition from the Company managing its proprietary credit program to having a third party administer the Blair Credit program. As a result of the sale of the credit portfolio, the Company no longer receives finance charge revenue, does not incur bad debts and has lower general and administrative costs associated with the credit portfolio.

Excluding the net results generated by the credit portfolio in the third quarter of 2005, Blair would have realized a net loss of $819,000, or $0.14 per basic share compared to the reported net income of $1.4 million, or $0.23 per basic and diluted share for the third quarter of 2005.

Third quarter 2006 results realized a 2% increase in cost of goods sold as a percentage of net sales over third quarter 2005 levels. A first quarter postal rate increase and loss of a key freight consolidator, who filed bankruptcy, has resulted in ongoing higher outbound freight expenses. Cost of goods sold has continued to benefit from our direct sourcing program that has generally resulted in lower costs of merchandise.

Third quarter 2006 advertising costs as a percent of net sales rose by approximately 3% over third quarter 2005 levels as a result of the postal rate increase and changes in our circulation program.

Results for the third quarter of 2006 also reflect a favorable reduction of $811,000 in interest expense compared to the third quarter of 2005 that was associated with the tender offer in August, 2005.

Net sales for the nine months ended September 30, 2006 were $307.2 million, a decrease of 5.9%, compared to $326.5 million reported for the nine months ended September 30, 2005. Units sold rose by approximately 2.2%, offset by lower average selling prices of approximately 6.8% as a result of continued price point repositioning.

Reported results for the first nine months of 2006 continued to benefit from the Company’s strategic efforts to increase direct sourcing. This improvement is reflected in the cost of goods sold as a percentage of net sales decreasing from approximately 46.0% to 45.5%.

General and administrative expenses for the first nine months of 2006 decreased 11% compared to the first nine months of 2005. This reduction is primarily due to restructuring efforts to generate operational efficiencies, elimination of prior year costs associated with Blair’s in-house credit program, costs incurred in August of 2005 for the tender offer, and adjustments to several compensation plans that are based on reported results.

Results were also affected by an increase in advertising costs of $7.6 million or 9.1% for the first nine months of 2006 compared to like period of 2005. The increase in these costs reflects higher levels of circulation and higher paper and postage costs associated with the delivery of catalogs to customers.

Blair's e-commerce channel generated $20.2 million and $73.8 million in net sales for the third quarter and first nine months of 2006 respectively, compared to $18.2 million and $64.2 million for the third quarter and first nine months of 2005.

During the third quarter of 2006, web site traffic increased 19% over third quarter 2005 levels, while website conversion rates and average order values remained steady. Revenue resulting from investments in keyword searches rose 62%, and revenue from natural search has nearly doubled following an intensive website optimization project.

The year-over-year increase reflects our customer’s interest in migrating to Blair.com and the impact of user experience and technology initiatives designed to improve site functionality and increase conversion rates. In addition, an advanced web analytics package was installed during the third quarter of 2006 to provide the Company with more detailed insight into web customer behavior.

The Company reported a net loss for the nine months ended September 30, 2006, of $5.7 million, or $1.47 per basic share, compared to net income of $8.1 million, or $1.09 per basic share and $1.07 per diluted share, reported for the first nine months ended September 30, 2005. The per share results for the nine months ended September 30, 2005, reflect the aforementioned reduction of weighted average shares outstanding resulting from Blair's tender offer for the repurchase of 4.4 million outstanding shares on August 16, 2005.

Excluding the net results generated by the credit portfolio in the nine month period ending

September, 2005, Blair would have realized net income of $1.7 million, or $0.23 per basic share and $.022 per diluted share compared to the reported net income of $8.1 million, or $1.09 per basic and $1.07 per diluted share for the nine months ended September, 2005.

Under the Company’s share repurchase program, 68,000 shares of its common stock were acquired through open market purchases during the third quarter of 2006, bringing total purchases under the existing authorization to 157,500 shares. The average purchase price was $29.40 per share. The Company has remaining authorization as of September 30, 2006 to purchase 242,500 shares. Under the terms of the Company’s revolving credit agreement, annual purchases may total $5 million.

John E. Zawacki, President and Chief Executive Officer of Blair, said, "We are addressing the challenging times within the retail catalog market by continuing to implement initiatives geared to promoting the customer’s buying experience, improving product demand and increasing our operational efficiencies. As a result of ongoing strategic efforts, we continue to recognize growth in the area of e-commerce. We are dedicated to reinforcing our position as the premier direct marketer to value-conscious consumers and increasing long-term shareholder value."

ABOUT BLAIR

Headquartered in Warren, Pennsylvania, Blair Corporation sells a broad range of women’s and men’s apparel and home products through direct mail marketing and its Web site www.blair.com. Blair Corporation employs approximately1,900 associates (worldwide) and operates facilities and retail outlets in Northwestern Pennsylvania as well as a catalog outlet in Wilmington, Delaware. The Company, which has annual sales of approximately $450 million, is publicly traded on the American Stock Exchange (Amex: BL). For additional information, please visit http://www.blair.com.

This release contains certain statements, including without limitation, statements containing the words "believe," "plan," "expect," "anticipate," "strive," and words of similar import relating to future results of the Company (including certain projections and business trends) that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to, changes in political and economic conditions, demand for and market acceptance of new and existing products, as well as other risks and uncertainties detailed in the most recent periodic filings of the Company with the Securities and Exchange Commission.

--Financial table follows--

Blair Corporation and Subsidiaries
Consolidated Statements of Income
	(Unaudited)		(Unaudited)
	Three Months Ended		Nine Months Ended
	September 30		September 30
	2006	2005	2006	2005
Net sales	$ 89,542,291	$ 98,106,952	$ 307,246,833	$ 326,499,410
Other revenue	1,550,591	10,237,923	4,693,030	31,814,077
	91,092,882	108,344,875	311,939,863	358,313,487
Cost and expenses:
Cost of goods sold	40,691,637	42,634,240	139,629,234	150,113,495
Advertising	25,762,260	25,265,481	92,194,093	84,523,176
General and administrative	26,410,512	34,352,624	89,349,413	100,656,767
Provision for doubtful accounts	273,494	3,289,124	356,816	10,196,089
Interest (income) expense, net	(248,481)	538,469	(866,227)	104,479
Other expense (income), net	(8,829)	17,453	169,704	(189,400)
	92,880,593	106,097,391	320,833,033	345,404,606
Income (loss) before income taxes	(1,787,711)	2,247,484	(8,893,170)	12,908,881
Income taxes (benefit) provision	(640,000)	832,000	(3,184,000)	4,779,000  (640,000)
Net income (loss)	$ (1,147,711)	$ 1,415,484	$ (5,709,170)	$ 8,129,881
Basic earnings (loss) per share based on
weighted average shares outstanding*	($0.30)	$0.23	($1.47)	$1.09
Diluted earnings (loss) per share based on
weighted average shares outstanding
and assumed conversions*	($0.30)	$0.23	($1.47)	$1.07
Weighted average basic shares outstanding*	3,820,116	6,059,508	3,875,738	7,476,121
Weighted average diluted shares outstanding*	3,887,199	6,169,972	3,964,117	7,601,769

*The per share results for the third quarter and nine months ended September, 2005 reflect

 the reduction of weighted average shares outstanding resulting from Blair’s tender offer for the

 repurchase of 4.4 million outstanding shares on August 16, 2005.

Blair Corporation and Subsidiaries
Consolidated Balance Sheets
	(Unaudited)
	September 30	December 31
	2006	2005
Assets
Current Assets:
Cash and cash equivalents	$ 16,209,846	$ 53,099,129
Receivables, less allowances for doubtful accounts of $363,333
in 2006 and $158,471 in 2005	6,066,555	2,987,832
Inventories:
Merchandise	74,097,571	71,217,282
Advertising and shipping supplies	14,879,659	12,146,732
	88,977,230	83,364,014
Deferred income taxes	216,000	731,000
Prepaid and refundable federal and state taxes	1,712,617	-0-
Prepaid expenses	2,720,305	2,781,777
Total current assets	115,902,553	142,963,752
Property, plant and equipment:
Land	692,144	1,142,144
Buildings and leasehold improvements	66,052,080	66,609,565
Equipment	77,417,320	75,320,297
Construction in progress	5,268,333	3,961,206
	149,429,877	147,033,212
Less allowances for depreciation	102,179,873	98,350,258
	47,250,004	48,682,954
Trademark	289,495	343,678
Other long-term assets	1,143,542	1,103,903
Total assets	$164,585,594	$193,094,287

Blair Corporation and Subsidiaries
Consolidated Balance Sheets – Continued
	(Unaudited)
	September 30	December 31
	2006	2005
Liabilities and Stockholders’ Equity
Current liabilities:
Trade accounts payable	$ 21,614,135	$ 29,137,285
Advance payments from customers	4,117,000	1,873,803
Reserve for sales returns	4,953,000	4,602,000
Accrued expenses	16,160,566	20,994,747
Accrued federal and state taxes	-0-	6,782,444
Current portion of capital lease obligations	13,848	19,198
Total current liabilities	46,858,549	63,409,477
Capital lease obligations, less current portion	6,709	14,695
Deferred income taxes	2,509,000	2,582,000
Other long-term liability	297,762	679,720
Stockholders’ equity:
Common stock without par value:
Authorized 12,000,000 shares
issued 10,075,440 shares (including shares
held in treasury) -- stated value	419,810	419,810
Additional paid-in capital	13,414,474	13,553,937
Retained earnings	324,925,681	334,023,925
Accumulated other comprehensive loss	(4,839)	(48,579)
	338,755,126	347,949,093
Less 6,238,999 shares in 2006 and 6,124,818
shares in 2005 of common stock
in treasury -- at cost	224,217,345	221,381,619
Less receivable and deferred compensation
from stock plans	(375,793)	159,079
Total stockholders’ equity	114,913,574	126,408,395
Total liabilities and stockholders’ equity	$164,585,594	$193,094,287