Sport Chalet, Inc. in a statement pointed to continued progress on its
initiatives to improve its financial performance and return the company
to profitability. Last Friday, the Los Angeles-based retailer reported
its net loss in its fiscal fourth quarter reached $11.1 million, or 79
cents a share, compared to a loss of $2.8 million, or 20 cents, a year
ago.

Fourth-quarter sales declined 12.7% to $84.5 million from $96.8 million a year ago as same-store sales tumbled 17.7%.

In a statement Monday, Sport Chalet said that following a comprehensive
review beginning in October 2008 of the company's financial performance
in light of the continued economic downturn in Sport Chalet's core
markets (California, Nevada, Arizona, and Utah), the company has taken
a number of actions and implemented several corporate initiatives in an
attempt to increase sales, improve operating performance, maximize
shareholder value and position Sport Chalet for long-term growth.

The company's initiatives to date include the following:


Amended loan agreement: On May 4, 2009, Sport Chalet amended its
existing loan agreement with Bank of America, N.A. to increase
financial flexibility. As a result of the initiatives taken by the
company, Bank of America approved loan amendments favorable to Sport
Chalet and agreed to covenants that require a $5.4 million EBITDA
profit in fiscal 2010, a $24 million improvement from fiscal 2009.
Sport Chalet has reported to the bank that results have exceeded plan
in the first two months of fiscal 2010.


Improved inventory management: Sport Chalet has implemented an
aggressive inventory management program, which has led to historic lows
of aged winter apparel and hardlines, along with footwear, general
apparel, and other key categories of hardlines. This is due in part to
the renewed commitment by the company to better inventory control, new
executive leadership in merchandising, along with the implementation
and roll out of SAP computer systems. The result has been fresh
assortments on the floor and an enhanced borrowing base. From January
through May 2009, the company received a total of $138.6 million in
fresh inventory at retail. The company believes it has the freshest and
cleanest inventory in the company's history.


Renegotiated lease terms and agreements: The company has approached
landlords of all of its 55 stores, as well as of the corporate
office, distribution center, and Team Sales division about
restructuring lease terms. To date, these efforts have resulted
in projected savings of approximately $17 million, $14 million of
which is over the next three years, with many leases to
include kick-out clauses, percentage rent and co-tenancy
clauses. The company continues to negotiate aggressively for
additional concessions.


Reduced expenses: Sport Chalet revised its store operating model by
creating four models based on individual store performance,
increasing the number of full-time versus part-time employees and
freezing incentive and salary programs. This resulted in a $7.2 million
reduction in payroll in the second half of fiscal 2009 and is expected
to further reduce payroll expense by $10.7 million in fiscal 2010. The
company also began approaching expense vendors concerning elimination
or reduction of non-critical programs, implementing aggressive
cost containment and renegotiations. In the second half of fiscal
2009, Sport Chalet reduced $2.8 million in annual expenses, which
includes advertising and marketing, professional fees, supplies,
utilities, travel and other costs. The company expects an
additional $9.4 million reduction in expenses throughout fiscal
2010.


Launched enhanced ecommerce website: Sport Chalet successfully
completed on-time and on-budget the launch of its new sportchalet.com
website with enhanced capabilities on March 23, 2009. The company
established a leadership position in ecommerce in the sporting goods
industry by selecting Marketlive, Sapient, Shopatron, Bazaarvoice, and
Experian Cheetah Mail to run the website. This new business is expected
to achieve average store sales volume by the end of the fiscal year and
continue to grow. It is also expected to be one of Sport Chalet's
primary advertising and marketing vehicles in the future.


Improved and expanded customer loyalty program: Despite the macro
economic environment, the company continued to aggressively move
forward with its Sport Chalet Action Pass program, which was initiated
in November 2007 to enhance the company's customer relationship
management capabilities. To date, the company has over 720,000 members
and is signing 6,000 to 8,000 new members each week. Currently, over
40% of all sales are being generated by Action Pass members. As a
result the company has been able to shift a significant portion of its
marketing activities away from traditional channels and towards direct
marketing to Action Pass members, the company's best customers, which
is expected to result in a higher return on advertising
investment.

Craig Levra, chairman and CEO of Sport Chalet, stated, “We are
extremely pleased with the traction we have gained to date as a result
of the aggressive actions we have taken in implementing our corporative
initiatives to improve the company's operational performance. Through
our team's diligent execution and business decisions, we improved
inventory and expense management, enhanced our ability to connect with
our customers, expanded our credit facility, and reduced capital
expenditures while making only critical investments in the business. We
are fortunate to have the support of our vendors and financial
partners, as well as a team of dedicated and hard-working employees who
believe in Sport Chalet. We look forward to providing our customers
with all of their specialty sporting goods needs for many years to
come.

“We believe our unwavering efforts and the progress we have made should
improve the business and our profitability. Prior to the economic
downturn, which began in 2007, Sport Chalet had been profitable for 11
consecutive years and 43 out of 44 quarters. We are confident that if
we continue to execute our plan, we will be better positioned for
sustainability, viability and positive results in the future.”