Shoe Pavilion, Inc. received a written notice from The Nasdaq Stock Market (“Nasdaq”) on June 19, indicating that the company has failed to comply with the minimum bid price requirement for continued listing on the Nasdaq Global Market. The bid price of its common stock has closed below the Nasdaq minimum bid price listing requirement of $1.00 per share for 30 consecutive business days.

Under Nasdaq Marketplace rules, the Company has until December 16, 2008 to regain compliance with the Nasdaq minimum bid price requirement. If at any time before that date, the bid price of the company's common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days, the company will regain compliance with the listing requirement, although the Nasdaq Staff has the discretion to require compliance for a period in excess of 10 consecutive business days, but generally for no more than 20 consecutive business days, under certain circumstances.

If the company does not achieve the minimum closing bid price requirement by December 16, 2008, Nasdaq will provide written notice of delisting. The company may either appeal this decision or, alternatively, it may apply to transfer its listing to the Nasdaq Capital Market, provided that it qualifies under all of the Nasdaq Capital Market initial listing criteria at that date other than the minimum bid price.