Brown Shoe Industry's Net Surplus In The Two Quarter Dropped By 77.4%

The net surplus in the second quarter dropped by 77.4% to $2 million 200 thousand, which was diluted to $0.05 per share, including the cost of the company's Famous Footwear headquarters from Madison, Wisconsin to Saint Louis, Missouri, after a diluted share of $0.15 per share.

The company's net surplus in the same period last year was $9 million 800 thousand, which was diluted to $0.22 per share, including the cost of the company's Earnings Enhancement Plan (surplus growth plan) related to diluted $0.08 per share.

Although sales and surpluses are affected by the decline in store pactions and the increase in promotional activities in our industry, our expenditure and inventory are still well controlled due to our emphasis on cost saving and our attention to new and rapid promotion strategies.

At the same time, we continue to invest in our brand, storefront and infrastructure to support our company's long-term development.

We have made significant progress in moving Famous Footwear to Saint Louis, and we continue to improve the product design capabilities of all our brands.

We believe that these plans, together with the diversity and development brought about by our new brand listing such as Fergie, and our partnership with Wang Weiwei Wang on the design and promotion of its Lavender Label Collection, will jointly promote Brown Shoe to become a stronger and more dynamic company in the future. Vera

Nevertheless, we should act cautiously in the second half of 2008, appropriately reduce our forecast and strengthen our capital management level.

Therefore, we now expect that Famous Footwear will open 90 new stores this year, and we originally planned to have 130 stores.

Although we anticipate that the retail environment is unstable, we believe we have sufficient strength and hope to win market share, and continue to move towards our long-term strategic goals.