Phoenix Footwear completed its acquisition of the Chambers Belt Company. Chambers manufactures and distributes men's and women's belts and accessories spanning traditional and western styles, as well as a growing children's line. The company posted full-year 2004 revenues of $40 million. Chambers' products are highly diversified in terms of style and target audience, and the company benefits from a broad distribution network. Chambers' products can be found in retail outlets such as Wal-Mart, Kmart, Nordstrom, Sheplers and Pacific Sunwear.

James R. Riedman, Chairman of Phoenix Footwear, commented, “We welcome Charlie Stewart, Kelly Green, Dave Matheson and the entire Chambers team to Phoenix Footwear. Chambers is a well-run company with a commitment to profitable growth and a proven track record in the retail industry spanning close to six decades. We believe our shareholders will benefit from this highly complementary acquisition and we are thrilled to have Chambers as part of our portfolio of brands.”

As previously announced, Phoenix Footwear's 2005 second quarter results were impacted by a temporary cessation in Department of Defense (DOD) deliveries at its Altama unit, as well as continued softness at its Trotters unit. As a result, the Company expects to report a loss of $0.10 to $0.l5 per diluted share for the second quarter. For the full year 2005, including the addition of the Chambers Belt Company, the Company expects to report overall revenues of $100 to $110 million and diluted EPS of $0.42 to $0.47. Included in projected EPS is $0.14 per share in amortization charges of acquisition- related intangibles and expenses related to employee stock grants in the Company's 401(k) savings plan.