The Timberland Company has completed a global retail portfolio review. This measure is part of the Company’s strategy to redirect investment to higher return businesses, drive efficiencies across its organization and rationalize its operating expense structure. The Company also updated its 2007 third-quarter and full-year outlook to reflect these changes, as well as the impact of challenging market conditions and the costs associated with a voluntary recall of certain Timberland PRO® products.

Following an evaluation of the performance of its worldwide retail stores, Timberland has decided to close approximately 40, principally larger, specialty retail stores in the United States, Europe and Asia. This action is consistent with the Company’s strategy to transition to smaller, footwear-focused stores in the U.S. and in certain international markets.

Timberland also plans to close several underperforming U.S. outlet stores. The majority of the store closures are expected to occur in the first several months of 2008, and the reduction in door count is anticipated to increase annual operating profits by approximately $6 million, while lowering annual revenues by approximately $40 million.

Timberland believes that retail is an important component of its multi-channel distribution strategy and will continue to operate approximately 200 retail doors globally following these select closures. These company managed stores, when combined with over 550 stores and shops operated by franchise partners and distributors, will leave the Company with more than 750 Timberland® retail locations worldwide following the closures.

Timberland will incur pre-tax restructuring costs of approximately $17 million to cover non-cash charges related to property and equipment, severance and other costs associated with the retail store closures. It anticipates incurring costs of approximately $7 million in the 2007 third quarter, $8 million in the 2007 fourth quarter and $2 million in early 2008.

The Company is also revising its 2007 full-year outlook to reflect softer market trends, impacts from the anticipated store closures, and approximately $4 million in additional costs related to its recent voluntary recall of some Timberland PRO® Direct Attach Steel Toe Series products due to a potential safety issue. For the full year, Timberland now anticipates revenue declines in the 5% range and a 400 to 450 basis point operating margin decline compared to prior-year levels excluding restructuring costs.

For the third quarter, Timberland anticipates revenue declines in the low teen range and operating margin declines in the range of 600 basis points, due in part to the voluntary recall. For the fourth quarter, it anticipates relatively improved performance with relatively flat revenues and an operating margin decline in the range of 100 basis points excluding restructuring costs.

The Company estimates that its full-year tax rate will be in the range of 35.0% to 35.5%. It does anticipate some volatility in its quarterly tax rate, as higher tax rates driven by lower profits in international markets will be partially offset by the release of specific tax reserves due to the closure of certain audits expected in the fourth quarter.

Jeffrey Swartz, Timberland’s President and CEO said, “After the completion of an extensive analysis of our retail portfolio, we have determined that several stores are not demonstrating the performance we require to justify continued investment. As a result, we have decided to begin the closure of most of our specialty retail stores in the United States, as well as select stores in Asia and Europe. We will continue to test and validate our new Footwear First model, and believe that it will provide the consumer facing branding we seek in a more compact and efficient structure. This initiative is one component of our ongoing efforts to rationalize our operating expense structure in order to drive further efficiencies, higher margins and healthy sustainable growth.”