Phoenix Announces the Sale and Leaseback of its Old Town, Maine Facility

Phoenix Footwear

Announces the sale and leaseback of the old town facility

CARLSBAD, Calif., July 08, 2013 -- Phoenix Footwear Group, Inc. (OTCMarkets.com: PXFG) today announced the sale and leaseback of its Old Town facility.

Phoenix Footwear Group announced today that on July 1, 2013, Penobscot Shoe Company (?Penobscot?), a Maine corporation and wholly owned subsidiary of Phoenix Footwear Group, Inc., a Delaware corporation (?Phoenix Footwear?), entered into a purchase and sale agreement (the ?Agreement?) with Old Town Partners, LLC (?Buyer?) relating to transactions which include, among other things, the sale and leaseback of Phoenix Footwear's warehouse facility located in Old Town, Maine.

Under the terms set forth in the Agreement, Penobscot sold to Buyer an approximately  75,000 square foot commercial building located on approximately 3.379 acres (collectively, the ?Property?). Currently, Phoenix Footwear utilizes the Property as its warehouse for inventory. Under the Agreement, Penobscot is required to lease the Property back from the Buyer pursuant to the terms of a Commercial Lease (Net Lease) between the Buyer, as landlord, and Penobscot, as tenant, and guaranteed by Phoenix Footwear. The lease term is ten years. The purchase price under the Agreement is $620,000. The proceeds from the closing of the transaction will be used by Phoenix Footwear to pay off its $250,000 term loan with AloStar Bank of Commerce, an Alabama bank (?AloStar?), and pay down its $700,000 subordinated term note with Gibraltar Business Capital, LLC, and its $7.0 million revolving credit facility with AloStar.

About Phoenix Footwear Group, Inc.

Phoenix Footwear Group, Inc., headquartered in Carlsbad, California, specializes in quality comfort women?s footwear with a design focus on fitting features. Phoenix Footwear designs, develops, markets and sells footwear in a wide range of sizes and widths under the brands Trotters? and SoftWalk?, These brands are primarily sold through department stores, leading specialty and independent retail stores, mail order catalogues and internet retailers and are carried by approximately 659 customers in over 997 retail locations throughout the U.S. Phoenix Footwear has been engaged in the manufacture or importation and sale of quality footwear since 1882.

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. These forward-looking statements include, but are not limited to, statements regarding Phoenix Footwear?s ability to repay its bank debt in a timely manner, future growth and performance of its individual brands, expected financial performance and condition for fiscal 2013 and/or statements preceded by, followed by or that include the words ?believes,? ?could,? ?expects,? ?anticipates,? ?estimates,? ?intends,? ?plans,? ?projects,? ?seeks,? ?exploring,? or similar expressions. Although Phoenix Footwear believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements included in this press release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by Phoenix Footwear or any other person that the objectives and plans of Phoenix Footwear will be achieved. All forward-looking statements included in this press release speak only as of the date of this press release and are based on Phoenix Footwear's current expectations and projections about future events, based on information available at the time of the release, and Phoenix Footwear expressly disclaims any obligation to release publicly any update or revision to any forward-looking statement contained herein if there are changes in Phoenix Footwear?s expectations or if any events, conditions or circumstances on which any such forward-looking statement is based.

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