Phoenix Footwear Q3 Revenues Rise 6.8 Percent

Phoenix Footwear Group, Inc. said sales totaled $4.7 million in the third quarter ended Oct. 1, compared to $4.4 million in the prior year comparative period. The
increase in net sales for the quarter is primarily due to improvements
in the supply chain in stock inventory position of key core and fall
product offerings and on time customer order fulfillment.

Gross profit was $1.8 million for the quarter, an increase of $646,000
compared to the prior year's comparable quarter, while gross margin
improved 12 percent to 38 percent, compared to 26 percent in the third
quarter of 2010. The improvement in gross margin for the third quarter
was the result of a higher percentage of full margin sales coupled with
decrease in closeout sales of slow moving and discontinued styles.

Selling, general and administrative expenses, or SG&A, totaled $1.5
million, a decrease of 28 percent compared to $2.1 million in the third
quarter of 2010. SG&A as a percentage of net sales was 33 percent
for the third quarter of 2011 compared to 49 percent in the prior year
comparative period. The improvement in SG&A for the period was
primarily due to lower employee compensation and benefits, office rents,
utilities, insurance and public company expenses as a result of the
Company's restructuring, relocation of the corporate headquarters in
Carlsbad and delisting and deregistration from the NYSE Amex and
Securities Exchange Act of 1934 reporting and Sarbanes-Oxley compliance
requirements.

Interest expense for the quarter totaled $177,000 compared to $127,000 for the third quarter of 2010.

In the third quarter, the Company reported net earnings of $73,000,
compared to a net loss of $1.1 million for the same period of the prior
year. Operating income before interest and taxes from continuing
operations for the quarter totaled $242,000 or $0.03 a share compared to
an operating loss of $1.0 million or $0.12 a share in the prior year
comparative period.

Phoenix Footwear Group, Inc., headquartered in Carlsbad, California, 
makes the Trotters(R) and SoftWalk(R) brands.