NEWS UPDATE

NEWS UPDATE

FEBRUARY 17, 2006 --

Profits Rise 23.3 Percent at The Sports Chalet

The Sports Chalet reported net income was $3.7 million, or $0.26 per diluted share, for the third quarter ended December 31, compared to $3.0 million, or $0.22 per diluted share, for the same period this year.

Sales increased 3.7% from $96.1 million for the three months ended December 31, 2004 to $99.7 million for the same period this year, with sales from six new stores contributing $5.4 million, or 5.5% of the increase. Same store sales decreased 1.8% for the quarter following last year's record winter weather conditions which increased customer traffic. Excluding winter-related merchandise, same store sales increased 3.0% for the quarter following a 3.4% increase for the same quarter last year. Three new stores were opened in the third quarter of fiscal 2006 compared to three new stores opened in the third quarter of fiscal 2005.

Gross profit decreased as a percent of sales from 32.5% for the three months ended December 31, 2004 to 31.9% for the same period this year. The decrease was primarily due to higher rent expenses for new stores opened during the quarter. Selling, general and administrative expenses increased as a percent of sales from 25.9% in the third quarter of fiscal 2005 to 26.5% in the third quarter of fiscal 2006. The increase is related to greater advertising expenses for the holiday season and new store openings.

Craig Levra, Chairman and CEO, stated, "We are pleased with our performance for the quarter. We are beginning to see benefits from our overall strategy of being less weather and geography dependent despite a challenging comparison to last year's all-time record quarter. While we experienced a same store sales and earnings decrease, we are encouraged by the 3.0% growth in our core non-winter business on top of last year's 3.4% increase. In addition, our Northern California and Nevada stores continue to improve, setting the stage for future growth. I am also happy with the performance of our team in successfully opening three new stores in Arizona, marking Sport Chalet's entrance into its third state, while finishing the quarter with zero debt."

"We remain focused on a disciplined expansion of our business as well as in-store systems and customer initiatives aimed at strengthening the Company. Our 10% sales growth and 12% earnings increase year-to-date, excluding the effects of the recapitalization, are a reflection of the hard work and dedication of our employees, our unique store concept and our ability to meet the needs of our customers."

Fila Forms Running/Racquet Technology Alliance

Fila formed a joint development and manufacturing agreement with Dicon Technologies, a wholly owned subsidiary of BH Shoe Holdings, Inc.

The exclusive agreement calls for Dicon to supply patented technologies and trademarks for a number of applications in Fila's running and racquet sports collections, in addition to applications in Fila's fitness, wellness and mountain categories. The partnership further allows full usage by Fila of performance enhancement features such as DRYZ.

DRYZ is a moisture management system developed for direct contact with the skin. The fabric liner wicks away moisture from the foot and transports it to a layer of copolymer foam. Upon contact with perspiration, this “smart foam” then absorbs and stores moisture away from the foot in a gel-like substance. The evaporation process begins immediately to help maintain the comfort of the wearer. The DRYZ insole also has special patented additives, called RESCENT, that neutralize odors. Additional ingredients help to fight the growth of fungi and bacteria. The gelled moisture dissipates continuously throughout the day and then evaporates completely when the shoes are removed.

“Fila has made a conscious decision over the past three years to enhance the pleasure of individual performance,” said Robert Erb, Chief Marketing Officer for Fila. “We don’t subscribe to the ‘no pain, no gain’ mantra that has characterized the sports industry for decades. Our belief is that to truly enhance the sport experience, we need to take a supporting role in enhancing the natural performance features of the human body—to only do that for individual performers which they cannot do for themselves. That kind of oneness and fluidity can only be achieved by partnering with leading edge developers like Dicon.

“Our end goal is to provide a superior athletic footwear experience to the consumer that cannot be duplicated in the marketplace.,” he added. “The forward thinking of Dicon’s patented technology is one more critical step toward owning that niche.”

DRYZ Intellitemp system will also be utilized in developing products with enhanced temperature regulations, said Dicon spokespersons. The trademarked technology is specifically designed as an all weather insulating material. Hollow spheres encapsulate air, trapping cold and heat to help insulate the body. And, critical to active wear, the technology’s insulating properties do not break down when moisture is introduced.

“Dicon Technologies is looking forward to integrating the patented DRYZ concepts into many of the athletic collections that Fila is launching in the near future,” said Jim Issler, President and CEO of BH Shoe Holdings, Inc. “We believe that the new technical design directions that Fila has created fits well with the innovative concepts that are at the core of Dicon‘s new developments in footwear technology.”

Sof Sole Introduces Custom Memory Footbed

Sof Sole introduced their newest advancement in technology, the Custom Memory footbed at the annual World Shoe Association (WSA) Show. The company said the new footbed offers individualized cushioning that adjusts to your unique footprint with every step.

Designed with the same high standards as Sof Sole's very popular Performance products, the Custom Memory continually responds to your foot's shape, angle and weight balance for all day comfort. The unique footbed reduces fatigue, relieves pressure and increases circulation.

"The Custom Memory provides optimal comfort in low-impact activities and is perfect for casual and dress shoes," said John Andrews, Vice President of Marketing for Sof Sole. "We felt like the WSA was the perfect place to unveil this new technology."

The Custom Memory is constructed of a moisture management foam top cover that instantly forms to your feet, combined with a shock-absorbing soft polyurethane bottom layer that provides extra cushioning. The combination not only provides outstanding comfort, but also supports your arch and cradles your heel for added stability.

Custom Memory has a suggested retail price of $9.99.

Timberland Introduces “Nutrition Labels”

Taking a lead from consumer packaged goods companies and adding its own eco-friendly twist, Timberland Co. plans to roll out new packaging that will include a “nutrition label” detailing where and how it was made, as well as how the process affected the environment.

The label has three sections: The ‘Manufactured’ section provides the name and location of the factory; the ‘Environmental Impact’ section reports how much energy is needed to produce the item; and the ‘Community Impact’ section provides information about the factory, including whether the company was assessed for Timberland’s conduct requirements or whether child labor was involved. Timberland also details community volunteer hours by its employees.

The new packaging, a first in the retail industry, will launch this summer with Timberland’s fall 2006 footwear collection.

Timberland’s packaging will also include a call-to-action for consumers to aid people in their communities. Messaging inside boxes ask consumers, “What kind of footprint will you leave?” and provide examples. For instance, each Outdoor Performance shoe comes in a reusable biodegradable waste bag to be used on the trail. Children’s footwear includes tissue wrap that educates them about birds and animals in the woods.

As expected, the boxes are which will be made from 100 percent recycled post-consumer waste fiber and use no chemical glues and only soy-based inks. Timberland further encourages consumers to reuse and fill the boxes with donations, such as canned goods, first aid items or clothing, and send them to non-profit organizations. Timberland will also provide links on its Web site in coming months to help consumers find local and national groups to support, as well as shipping labels.

“Our goal is to reduce our impact on the environment while engaging consumers to take action,” says Jeffrey Swartz, Timberland’s president and CEO. “This packaging and labeling initiative should make our industry more transparent and give consumers the information they need to make smart buying decisions.”

Timberland hopes its use of eco-friendly packaging and “transparent communications” about its business practices inspires other brands.

“This packaging and labeling initiative is another step in an industry-wide movement towards becoming more aware of what goes into the products we consume,” says Schwartz.

Road Runner Sports Selects Scene7 On-Demand Rich Media Platform

Scene7, a provider of the leading on-demand rich media platform, announced that Road Runner Sports, the running resource for shoes, apparel, accessories and information, is using Scene7 On-Demand (S7OD), Scene7's hosted self-serve rich media platform to add dynamic zoom, re-sizing and other rich media across its e-commerce website.

"We wanted to find a single rich media provider that could deliver all of our visual merchandising needs for our site now and in the future. Only Scene7 could offer the breadth of capabilities we needed, from dynamic zoom, sizing, personalization and templating all accessible through a single on- demand self-service platform. The on-demand solution had significant appeal to us as we are now able to control all the rich media publishing in-house with minimal IT or external vendor support and investment," said Peter Taylor, General Manager, Road Runner Sports. "With Scene7's highly-scalable and robust infrastructure, we can cost-effectively add zoom and colorizing to our entire site, across tens of thousands of products. In addition, Scene7's dynamic image re-sizing capabilities are helping us streamline our internal web production processes thereby reducing cost and time-to-market."

To enhance its innovative website, Road Runner Sports selected Scene7 On-Demand solutions to improve its visual merchandising by providing visual details, colors, materials and options on all of its products. In addition, Scene7 dynamically generates unlimited image derivatives from single master images, greatly reducing associated time and costs, and providing Road Runner Sports with an automated, scaleable rich media solution to easily update content on its ATG- driven e-commerce website.

Scene7 On-Demand provides companies with a flexible, self-service environment for the creation and deployment of rich media. Scene7's hosted rich media platform enables key business solutions including Dynamic Imaging (dynamic zoom, sizing, art, color swatching, spin, templates), eCatalogs, Product Configurators, Targeted email and print, and Dynamic Asset Management enabling customers like Road Runner Sports to continuously enhance its visual presentation on its website.

"We're excited to partner with an innovative market leader like Road Runner Sports," said Doug Mack, CEO of Scene7. "Our hosted self-service rich media platform is geared to offer Road Runner Sports superior visual online customer shopping experiences, while offering the lowest cost of ownership and the highest ROI in the industry today."

Sprint and Bones in Motion Launch Mobile Fitness Application

Sprint and Bones in Motion are offering BiM Active, which is calls “the first in a suite of applications that enables active individuals to use Sprint and Nextel phones and the Web to achieve their fitness and lifestyle goals.”

The companies said BiM Active enables runners, cyclists, and walkers to wirelessly capture and monitor their activity in real-time on GPS-enabled Sprint and Nextel phones. The service transforms the phone into a virtual coach and offers users feedback during their exercise through sound alerts. When the activity is complete, the exercise information is uploaded to a personal Web portal on http://www.bimactive.com/. There, users can chart their personal progress and share information such as routes with ratings and reviews.

"Sprint customers can use BiM Active to transform their mobile phone into a fitness and lifestyle enhancement tool," said Alana Muller, director of information data services for Sprint. "This is just one of the many location- based consumer applications Sprint offers that gives customers personalized information when and where they want it on the device they always have with them."

"Whether you are training for a triathlon or walking to get in shape, BiM Active is a motivational tool that provides instant audible feedback during the activity and support and information online," said Andrew Graham, CEO of Bones in Motion. "Our vision is to create a truly interactive experience and virtual community that helps people achieve their fitness goals."

BiM Active is available from Sprint for $9.99/month. For more information, visit http://www.sprint.com/ or http://www.bimactive.com/. To experience a live demonstration, visit pod #63 at the DEMO Conference on Feb. 6-8 at the Pointe South Mountain Resort in Phoenix, Arizona.

ASICS Richard Bourne Joins SGMA's Board

The Sporting Goods Manufacturers Association (SGMA) is making changes to its Board of Directors. Joining the SGMA Board of Directors are Richard Bourne (COO/President - ASICS America Corporation), Paul Ehrlich (general counsel - adidas America), and Chris Considine (President - Wilson Sporting Goods Company).

Two current board members are being promoted to the SGMA executive committee. They are Wayne Merck (President/COO - K2, Inc.) and Carl Ferraro (President - Regent Sports Corporation). Tony Palma (President/CEO - Easton Sports) is the new treasurer.

These changes to the board were made recently during The Super Show (January 23-25; Orange County Convention Center - north/south complex; Orlando, FL), one of the leading marketing events/trade shows in the sporting goods industry.

"This is a dynamic group of leaders within in the sporting goods industry who have pledged their support to SGMA as this trade association launches a new era,” said SGMA President Tom Cove. “These are exciting times filled with change on all fronts as we expand our presence and influence on Capitol Hill, in the trade show business, in market research, and in public relations initiatives. The support and guidance we receive from our board will help us be successful.”

Other board members are: Chairman Tom Rogge (President -- Cramer Products); Immediate Past Chairman Richard Kazmaier (President -- SR Industries, Inc.); Vice Chairman Steve Furniss (Executive Vice President -- TYR Sport, Inc.); Bob Corliss (President/CEO - The Athlete's Foot); Calvin Johnston (CEO - Russell Athletic Group) Jim Baugh (President - Tennis Industry Association); Dan Bower (President -- Century, Inc.); Jim Davis (Chairman/CEO -- New Balance Athletic Shoe); Larry Franklin (President -- Franklin Sports, Inc.); Carol Hochman (President/CEO - Danskin, Inc.); Dave Haggerty (CEO -- Head/Penn Racquet Sports); Kerry Kligerman (President -- Vital Apparel Group); Kevin Lamar (President/CEO -- Lamar Health, Fitness & Sports, LLC); Doug Morton (Chairman/CEO -- The Sports Authority, Inc.), Bob Munroe (Senior Vice President/General Manager -- Reebok International Ltd.); George Napier (CEO -- Prince Sports, Inc.); Bill Sherman (President - Riddell, Inc.), and Kevin Plank (CEO -- Under Armour Performance Apparel).

Walking Co. Acquires Steve's Shoes

The Walking Company, a wholly owned subsidiary of Big Dog Holdings, announced that it has agreed to acquire substantially all the assets of Steve's Shoes, Inc. for approximately $4.2 million in a bankruptcy auction.

Steve's Shoes, one of the largest independent comfort shoe retailers in the country, operates 45 stores in 22 states, primarily in the Mid West, under the store names Steve's Shoes, Overland Trading Co., and Sole Outdoors. Brands include Ecco, Dansko, and Merrell, among others, with total annual sales of approximately $35 million. Steve's Shoes was founded 67 years ago and grew from one store in Kansas City to 78 stores across the nation. As a result of their aggressive expansion and other factors, Steve's Shoes eventually declared bankruptcy a few weeks ago.

The Walking Company has agreed to acquire at least 35 of the stores and has retained the right to accept, assign or reject the ten remaining stores after a 90-day trial period.

Andrew Feshbach, Chief Executive Officer, stated, "This is a good add-on acquisition for us, further implementing our expansion strategy for The Walking Company. We look forward to converting these stores to Walking Company stores. We will immediately bring financial strength to the organization and look to achieve significant operating leverage and cost savings by more fully utilizing The Walking Company's systems, distribution infrastructure, and experienced management team."

The Walking Company operates 88 stores in premium malls across the nation. Featured brands include ECCO, Mephisto, Dansko, Birkenstock and Merrell.

SHORTS

Moretz Sports has signed agreements to sponsor professional ultramarathon runner Pam Reed and international mountain guide Dave Hahn. The announcement was made by Ander Horne, Vice President, Marketing, Moretz Sports. In addition to wearing PowerSox while performing their respective sports, Reed and Hahn will provide Moretz Research & Design with field testing data and each will contribute to online journals covering their sporting lives at www.powersox.com. They will also make appearances at PowerSox promotional eventsThe endorsements by performing athletes are a first for Moretz Sports, celebrating its sixtieth anniversary this year. The company currently has licensing and lifestyle branding business relationships with NFL legends Ronnie Lott and John Elway; and lifestyle businesswoman, Kathy Ireland. Said Ander Horne, Vice President, Marketing, Moretz Sports, “Pam Reed and Dave Hahn represent a new breed of extreme athlete. We couldn't be happier that PowerSox will be on their feet as they push onward in their sports.”

AC/InterActiveCorp of New York plans to acquire Boston-based Shoebuy.com Inc., an internet retailer of footwear and related apparel. No financial details of the deal were released. Shoebuy’s founder and chief executive officer Scott Savitz will continue to oversee the company’s operations. IAC is a diversified holding company of businesses in sectors associated with the Internet.

Atsco Brands announced several new positions and promotions. New executive hires include: John Kelly named Chief Financial Officer of Atsco Brands; Joel Kaplan as the new Vice President/Director of Sourcing; Angela Petropoulos as the new Product Manager, ellesse footwear; and Bill Bratton, named Vice President of Sales, ellesse apparel. Promotions within the company include: Suzanne Hood, from Inside Sales and Operations to Director of Lelli Kelly; Brian Benko, from Account Executive to Regional Sales Manager; Gary Nohe, from Account Executive to Regional Sales Manager; and Chris Langathianos, promoted from KangaROOS Marketing Manager to Director of Corporate Marketing. Atsco Brands is the exclusive U.S. licensee for KangaROOS apparel and footwear, Lelli Kelly footwear and accessories, and ellesse footwear and apparel.

LaSalle Bank has become the become title sponsor of the Columbus Distance Classic half marathon. Entering its third year, the 13.1 mile road race will now officially be titled The LaSalle Bank Columbus Distance Classic and will serve as the Bank's premiere event in the Columbus community. LaSalle already sponsors two marquee Chicago- based running events -- The LaSalle Bank Chicago Marathon and The LaSalle Bank Shamrock Shuffle.

New this year to the Columbus Distance Classic will be a two-day Health and Fitness expo, where individuals can shop and receive last minute tips and enjoy gearing up for the half-marathon. Also new this year is a walking division and a new headliner concert Saturday Night presented by The Lifestyles Communities Pavilion.

The 2006 LaSalle Bank Columbus Distance Classic takes place Saturday, April 1. The half-marathon will begin at 9 a.m. The Commit to Be Fit 5k will start at 9:10 and the popular Capital Kids Mascot Chase will take place at 8:30 a.m. Registration is now open for 2006. Interested individuals can register for the half-marathon on-line at http://columbusdistanceclassic.com/ and via standard mail. On-line registration is $50.

Nautica has signed a multi-year agreement to be the title sponsor of the Nautica New York City Triathlon. This year's race is scheduled for Sunday, July 16. Last year, over 2,000 athletes, from elite international athletes to local New Yorkers, competed in this prestigious event. As the title sponsor, Nautica is the sole apparel provider for all event officials, announcers, staff and volunteers. As part of the agreement, Nautica will have a prominent signage presence throughout the race route and during the televised broadcast. In addition to the Nautica New York City Triathlon, Nautica is also the title sponsor of the Nautica Malibu Triathlon. The Nautica New York City Triathlon is the only sanctioned triathlon held in New York City and consists of a 1,500-meter swim in the Hudson River, a 40-kilometer bike ride along the Henry Hudson Parkway and a 10-kilometer run in Central Park.

"We look forward to revamping the race with fresh ideas, creating a corporate challenge with New York companies, and bringing in new partners to extend the reach of the Nautica New York City Triathlon," said Chris Fuentes, Nautica's Vice President of Marketing. "We will continue to support cause related fundraising with our events which include the AVP Tour, US SAILING, Nautica Malibu Triathlon, Nautica/GQ Kayak for a Cause and Head of the Charles Regatta."

Nike unveiled its new women's fitness dance collection along with a music video featuring Def Jam artist, Rihanna, and celebrity director/choreographer, Jamie King, performing moves from the "Nike Rockstar Workout - Hip Hop by Jamie King." The interactive music video at nikewomen.com features Rihanna's latest single, "SOS" and allows viewers to pause the video to pull up a screen with King teaching dance moves from the video. The hour-long, high-energy cardio class, "Nike Rockstar Workout - Hip Hop," will be available at 24 Hour Fitness locations throughout the country beginning February 16.

KangooNYC.com, official distributor of Kangoo Jumps, the world's lowest impact aerobic fitness shoe, announced that The Athlete's Foot at Woodbridge Center mall in Woodbridge, N.J., is the first retailer in the United States to carry Kangoo Jumps.

The distributor said Jumps have been popular at fitness centers in Europe since the 1990s. Kangoo Jumps are sold through independent distributors throughout the world and are emerging into the U.S. retail market through KangooNYC.com. Ericka Simmons, managing partner of Epic Sculpt, a fitness product distribution company based in Cranford, N.J., is the official distributor of Kangoo Jumps through KangooNYC.com.

The distributor said Kangoo Jumps' architecture and technology supports the intense training regimens of athletes such as runners and marathoners as well as anyone looking to start a weight loss fitness routine or expand their fitness training. Kangoo Jumps' Swiss-engineered patented Impact Protect System (IPS) is designed to help reduce joint impact stress by up to 80%; limit the risk of aggravating overused or surgically reconstructed joints; and prevent the onset of injuries due to rigorous training.

"We're always looking for an exciting product and this is it," says Bruce Blanke, managing partner of The Athlete's Foot at Woodbridge Center since 1977. "Kangoo Jumps are easier to use than inline skates. You just put them on and use them and you feel great."

"The Athlete's Foot at Woodbridge Center is the perfect retail partner to carry a product as innovative as Kangoo Jumps," says Simmons. "Kangoo Jumps' design and performance technology appeal to a cross-section of athletic consumers who demand the best in footwear and service."

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January 30, 2005
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