SANTA BARBARA, CA, March 31, 2005 - Big Dog Holdings, Inc. (NASDAQ: BDOG; www.bigdogs.com; www.thewalkingcompany.com), a developer and retailer of branded, lifestyle consumer products, today reported the financial results for the fourth quarter and year ended December 31, 2004. The results for the quarter and year include assets and operations of The Walking Company ("TWC") which business was acquired on March 3, 2004. TWC is the leading specialty retailer of high-quality, technically designed comfort shoes and accessories.

For the quarter ended December 31, 2004, the Company's consolidated earnings were $.43 per share, as compared to $.35 per share earned for the fourth quarter 2003. Consolidated earnings for the year ended December 31, 2004 were $.40 per share, with 9.2 million average shares outstanding, as compared to $.32 per share and 8.3 million average shares outstanding for 2003. Consolidated net income increased to $4.1 million and $3.7 million for the fourth quarter and year 2004, respectively, as compared to $2.9 million and $2.6 million for the same periods in 2003. Merchandise margins for the 2004 year were 54.9%, as compared 56.6% for 2003. (The Big Dog chain margin increased to 56.8% as compared to 56.6% last year. TWC chain gross margin was 51.9% for the ten months ended December 31, 2004.) Consolidated operating expenses were 50.8% of sales for the year 2004, as compared to 52.3% for 2003. The decrease in operating expenses as a percentage of sales is primarily a result of the operating leverage associated with the TWC chain.

As previously announced, consolidated net sales for the fourth quarter were $55.7 million, a 61% increase as compared to $34.7 million in the same quarter of 2003. Our consolidated net sales increased primarily due to the addition of approximately $23.4 million of revenue from our TWC operations. The Company had a total of 262 stores opened (188 Big Dog stores and 74 Walking Company stores) at the end of the period, as compared with 203 Big Dog stores on December 31, 2003. Comparable retail store sales increased 6.3% for the quarter (2.9% decline for the Big Dogs chain and 21.2% increase for the TWC chain.) Consolidated net sales for the year ended December 31, 2004 (which included 10 months for TWC) were $161.4 million, a 56% increase, as compared to $103.8 million in 2003. Comparable retail store sales increased 3.4% for the year (1.9% decline for the Big Dogs chain and 12.7% increase for the TWC chain.)

Commenting on the 2004 results and looking towards 2005, CEO Andrew Feshbach stated, "We are very pleased with the financial, organizational and strategic progress our Company has made this last year. Notably, our ability to acquire TWC and successfully integrate it into our infrastructure has been instrumental in improving our operations and financial strength. The Company is poised for a successful year and we are hopeful to achieve increases in comparative store sales, operational efficiencies and TWC store unit growth. So far in 2005, our TWC sales momentum continues to be strong. Our Big Dogs business continues with the same pace as we've previously experienced. First quarter sales performance for 2005, while impacted by severe weather conditions around the country, has similar trends to our last quarter of 2004 for both chains."

Big Dog Holdings, Inc. consists of Big Dogs and The Walking Company. Big Dogs develops, markets and retails a branded, lifestyle collection of unique, high-quality, popular-priced consumer products, including activewear, casual sportswear, accessories and gifts. The BIG DOGS® brand image is one of quality, value and fun. The BIG DOGS® brand is designed to appeal to people of all ages and demographics, particularly baby boomers and their kids, big and tall customers, and pet owners. In addition to its 188 retail stores, Big Dogs markets its products through its catalog, internet and corporate sales accounts. The Walking Company is a leading independent specialty retailer of high quality, technically designed comfort shoes and accessories that features premium brands such as ECCO, Mephisto, Dansko, Birkenstock and Merrell among many others. These products have particular appeal to one of the largest and most rapidly growing demographics in the nation. The Walking Company operates 74 stores in premium malls across the nation.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

With the exception of historical information, the matters discussed in this press release are forward looking statements that involve a number of risks and uncertainties. The actual future results of the Company could differ significantly from those statements. Further information on the Company's risk factors is contained in the Company's quarterly and annual reports as filed with the Securities and Exchange Commission.


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Big Dog Holdings, Inc.
121 Gray Avenue
Santa Barbara, California 93101


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Laura Russell
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(805) 963-8727, ext. 1360