VANCOUVER, B.C. April 16, 2012 - Sterling Shoes Inc. announced today that its wholly-owned subsidiary, Sterling Shoes GP Inc. (general partner of Sterling Shoes Limited Partnership ("Sterling LP")) and Sterling LP have entered into an agreement (the "Purchase Agreement") with Town Shoes Limited ("Town Shoes") pursuant to which Town Shoes has agreed to acquire the majority of the assets of Sterling LP including a substantial portion of Sterling's retail locations operating under the Sterling Shoes, Shoe Warehouse and Freedman Shoes banners for a purchase price of $17.5 million, subject to certain adjustments (the "Transaction"). The Transaction is subject to the terms and conditions set out in the Purchase Agreement, including a requirement to obtain the approval of the British Columbia Supreme Court (the "Court") under the Companies' Creditors Arrangement Act (the "CCAA"). The Transaction is currently expected to close on or about May 22, 2012.

"I believe that achieving this agreement presents the best possible outcome for the business" said Dave Alves, President and CEO of Sterling Shoes LP. "By leveraging the core strengths of the unified organizations we create significant opportunities for the business, employees and ultimately the customer. As a collective portfolio of Freedman Shoes, Shoe Warehouse, Sterling Shoes, The Shoe Company, and Town Shoes, we are excited to be a part of the largest branded footwear retailer in Canada."

Sterling Shoes announces today the proposed future closure of 53 store locations in British Columbia, Alberta and Ontario. Stores were selected for closing after extensive analysis and based on parameters established as part of the Company's business strategy.

The Company is continuing with 5 Freedman stores, 28 Sterling stores and 72 Shoe Warehouse stores. These remaining stores will continue to operate on a normal basis. Upon completion of the store-closing process, the Company's total store portfolio will consist of 105 stores.

Sterling Shoes announces today that the Company obtained an order (the "Order") from the Supreme Court of British Columbia under the Companies' Creditors Arrangement Act (CCAA) extending the stay of proceedings granted pursuant to the previously announced Initial Order obtained by the Company on October 21, 2011.

The Order extends the stay period until December 30, 2011, to be further extended as required and approved by the Court.