West
49 Inc. reported that net sales for the quarter decreased 3.1%, to
CN$43.6 million ($38 mm) for the fiscal second quarter ended August 1.
Comparable store sales at Canada's largest actions sports retailer
decreased 4.7% on a consolidated basis, while the West 49 banner
remained relatively flat, with a slight decrease of 0.2%. A depressed
economy and unseasonably cool temperatures impacted sales during what
is typically one of the slower quarters of the year for the retailer.

“We are pleased with the sales performance of our core West 49
banner during these challenging market conditions,” said Mr. Baio.
“However, we are disappointed by the sales performance of certain other
elements of our business, specifically with respect to our girls
business, which we will continue to monitor and address.”

Gross margin for the quarter increased 50 basis points to 21.8% of
net sales compared to 21.3% a year earlier. The increase in gross
margin rate was reflective of the company closely working with
merchandise vendors to ensure product assortments reflected current
trends and provided exceptional value for customers.

SG&A expenses were down 130 basis points to 21.1% from 22.4% in
the second quarter of last year as a result of the company's continued
focus on expense management, primarily variable store operating costs
and other discretionary spending. The 130 basis point improvement
marked the sixth consecutive quarter that the company lowered its
SG&A expenses as a rate to net sales.

EBITDA for the quarter was CN$0.3 million compared to a loss of
CN$0.5 million for the second quarter a year ago. The improvement was
mainly due to the improved gross margin as a rate to sales and cost
savings.

The net loss for the quarter improved to CN$1.0 million, or CN$0.01
per share, from a net loss of CN$1.8 million, or CN$0.03 per share, for
the second quarter last year.

As part of the company's focus on growing its core business, two new
West 49 stores were opened during the quarter; one in the Eastgate
Square, Stoney Creek, Ontario, and one in the Georgian Mall, Barrie,
Ontario. During the quarter, the company closed the final two Duke's
Northshore locations, completing the company's exit from this test
concept, as well as two other underperforming stores: an Arsenic store
in Laval, Quebec and a street-front Billabong store in Toronto, Ontario.

Subsequent to the quarter end, the company opened a West 49 store
and an Off The Wall store at CrossIron Mills, in Rocky View, Alberta.

During the quarter, the company successfully obtained the renewal of
its existing credit facilities which included more accommodating
financial covenants. As such, the company was in compliance with all
banking covenants at the end of the quarter, and management believes
that the company will remain in compliance with these covenants
throughout the term of the facility. The company's next renewal date
with its existing bank is scheduled for June 30, 2010.

“The strategies we continue to execute have better positioned our
business for our seasonally stronger back half of the year,” said Mr.
Baio. “We remain focused on increasing profitability by: growing our
core business; refining inventory management; improving our margins and
containing costs.”