Big Dog Holdings Acquires The Walking Company

(Santa Barbara, CA, March 8, 2004) — Big Dog Holdings, Inc. (NASDAQ:BDOG) has completed the acquisition of The Walking Company for cash, debt and equity securities totaling approximately $19 million, effective March 3. FocalPoint the Los Angeles-based independent investment bank specializing in mergers and acquisitions, facilitated the acquisition.

The Walking Company, which will be operated as a subsidiary of Big Dog Holdings, Inc., is the leading specialty retailer of high-quality, technically designed comfort walkwear & accessories, featuring quality brands such as Ecco, Mephisto, Dansko, Birkenstock and Merrell. It markets its collections of products through more than 70 retail store locations with total annual sales of approximately $65 million.

The Walking Company was founded in 1991 and grew rapidly from a base of 20 stores in 1995 to over 100 stores in 2003. As a result of their rapid expansion, The Walking Company made certain real estate and merchandising missteps and eventually declared bankruptcy last summer. The bankruptcy process allowed The Walking Company to shed their non-performing stores and liquidate excess and obsolete inventory. The current enterprise is now wholly re-focused on its core business of operating specialty stores in premium malls selling the best brands in the comfort shoe category.

“Big Dogs has been looking for the right acquisition opportunity for years,” comments Big Dogs CEO Andrew Feshbach. “We are excited about The Walking Company’s retail concept and niche and its future growth prospects. Further, we believe we can achieve substantial operating leverage and cost savings by more fully utilizing Big Dog’s systems and distribution infrastructure and experienced management team. In addition, we believe there are excellent future growth opportunities for The Walking Company once we have fully absorbed their operations.”

David Wolf, Sr. Vice President of Sales and Marketing, comments, “We are very impressed with the growth opportunity in the premium comfort walkwear market. Key brands are growing rapidly, fueled by the growing demographics of the comfort walkwear customer and the acceptance, awareness and interest in this type of product. Further, we believe there are substantial opportunities to improve the brand image and perception of The Walking Company retail stores.”

Big Dog Holdings, Inc. is the parent company of Big Dog Sportswear, which develops, markets and retails a branded lifestyle collection of unique, high-quality, popularly priced consumer products, including active wear, casual sportswear, accessories and gifts. The BIG DOGS brand image is one of quality, fun and a sense of humor. The BIG DOGS brand is designed to appeal to people of all ages and demographics, particularly baby boomers and their kids, big and tall customers, and pet owners. In addition to its 194 retail stores, Big Dogs markets its products through its catalog, better wholesale accounts and Internet sales.

About FocalPoint
FocalPoint is an independent investment bank, specializing in mergers and acquisitions, raising capital (both debt and equity), and financial restructurings. The firm’s primary focus is on middle-market companies headquartered in the United States, operating with revenues between $5 million and $250 million in a diverse range of industries. FocalPoint is managed by seasoned veterans with backgrounds in law, public accounting, senior lending, private equity and investment banking at leading national and international firms. The firm’s goal is to provide unbiased, innovative financial advice by taking the time to truly understand the needs of its clients and then devising a strategy that best fits those objectives.

Please feel free to contact Duane Stullich at (310) 405-7070 with any questions about this transaction.

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