SANTA BARBARA, CA--(Marketwire - August 14, 2007) - 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 second quarter ended June 30, 2007.

For the quarter ended June 30, 2007, consolidated net sales were $55,854,000, as compared with $53,178,000 in the second quarter 2006. Our consolidated sales increased 5.0%, primarily due to the addition of 27 new The Walking Company ("TWC") stores. The Company had a total of 302 stores opened (160 TWC stores and 142 Big Dog stores) at the end of the period, as compared with 294 stores opened on June 30, 2006 (133 TWC stores and 151 Big Dogs stores). Comparative retail store sales increased 2.3% for the second quarter 2007 (6.4% increase for the TWC chain and 5.3% decline for the Big Dogs chain.) Total consolidated gross profit was 54.6% of sales or $30,497,000 in the second quarter 2007, as compared with 55.3% of net sales or $29,383,000 in the second quarter 2006. TWC's margin contribution remained flat at 52.4% for both periods. Big Dogs' margin contribution for the period decreased to 59.5% as compared to last year's margin contribution of 60.1%.

Consolidated operating expenses in the second quarter 2007 were $29,670,000 or 53.1% of sales, compared to $27,843,000 or 52.4% in the second quarter 2006. Consolidated operating income for the second quarter 2007 was $828,000, compared to $1,540,000 for the second quarter 2006. The increase in such expenses as a percentage of sales and the decrease in operating income, are largely attributable to the reduction in Big Dogs revenue as well as some operating lag resulting from our newly opened TWC outlet store openings. As a result, the consolidated fully diluted net income/loss per share for the second quarter 2007 decreased to $0.02 net loss per share, as compared with $0.06 net income per share for the second quarter 2006.

Andrew Feshbach, Chief Executive Officer, stated, "Aside from the first two weeks in April where retail sales were soft in general and across the country, we continued our trend of strong single digit comps for the remainder of the quarter. However, our earnings per share for the quarter reflect, among other things, the continued decrease of our Big Dogs' business. Our Big Dogs outlet business continues to experience negative sales trends and we are maintaining a sharp focus on reducing commitments. We opened 13 TWC stores year-to-date and are scheduled to open approximately 30 additional stores in 2007. Our core TWC stores remain strong and our Steve's Shoes acquisition stores operating performance has improved and is on plan."

"Looking forward we continue to see the same sales and operating trends for TWC and potentially may experience further erosion of our Big Dogs business, for the third quarter as experienced in the second quarter. We believe that our TWC business remains strong and we have new and exciting Fall merchandise initiatives to introduce. Our corporate infrastructure has been built including our newly opened distribution center from which we have experienced operating leverage this last quarter and we expect to see continue for the remainder of the year. Our balance sheet was strengthened with our earlier $18.5 million convertible debt financing and is positioned to support our TWC growth plan. Lastly, we are excited about the September 1st launch of our new website which we believe will be the world's largest internet comfort store."

Today's Conference Call

Today the company will host a conference call at 1:30pm PDT to discuss financial results for the Quarter Ended June 30, 2007. Dial in information is as follows: U.S. Toll Free: 1-800-434-1335. Participant code (to be given to the operator): 274139. In the event you are unable to attend a recordable copy will be available two (2) hours after the call has ended. Dial in information to listen to the recorded call is as follows: 1-800-750-4065, Participant code: 99277393#.

Big Dog Holdings, Inc. (the "Company") consists of its Big Dogs and The Walking Company subsidiaries. Big Dogs develops, markets and retails a branded, lifestyle collection of unique, high-quality, popular-priced consumer products, including active wear, 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 approximately 142 retail stores, Big Dogs markets its products through its catalog, corporate sales accounts and Internet sales. The Walking Company ("TWC") is a leading independent specialty retailer of high-quality, technically designed comfort footwear and accessories that features premium brands such as ECCO, Mephisto, Dansko, 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 160 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 sales and other 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.



                  BIG DOG HOLDINGS, INC. AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS
                                (Unaudited)


                                                         June 30,
                                                ---------------------------
                                                    2007          2006
                                                ------------- -------------
                        ASSETS
CURRENT ASSETS:
 Cash and cash equivalents                      $     937,000 $     766,000
 Receivables, net                                   3,360,000       856,000
 Inventories, net                                  69,403,000    56,090,000
 Prepaid expenses and other current assets          1,841,000     3,060,000
 Deferred income taxes                              7,326,000     3,288,000
                                                ------------- -------------
   Total current assets                            82,867,000    64,060,000
PROPERTY AND EQUIPMENT, Net                        29,028,000    15,850,000
INTANGIBLE ASSETS, Net                              3,907,000     4,300,000
GOODWILL                                            3,131,000     3,131,000
DEFERRED INCOME TAXES                               1,875,000     1,891,000
OTHER ASSETS                                          365,000       398,000
                                                ------------- -------------
 TOTAL                                          $ 121,173,000 $  89,630,000
                                                ============= =============

          LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
 Short-term borrowings                          $  24,394,000 $  23,446,000
 Current portion of long-term debt                  3,332,000     1,839,000
 Accounts payable                                  13,711,000     8,098,000
 Income taxes payable                                       -             -
 Accrued expenses and other current liabilities     6,036,000     5,220,000
                                                ------------- -------------
   Total current liabilities                       47,473,000    38,603,000
LONG-TERM CONVERTIBLE DEBT                         17,250,000             -
NOTES PAYABLE                                       3,447,000     4,176,000
CAPITAL LEASE OBLIGATIONS                           2,136,000         4,000
DEFERRED RENT AND LEASE INCENTIVES                  5,671,000     1,691,000
DEFERRED GAIN ON SALE-LEASEBACK                       116,000       169,000
                                                ------------- -------------
 Total liabilities                                 76,093,000    44,643,000
STOCKHOLDERS' EQUITY                               45,080,000    44,987,000
                                                ------------- -------------
 TOTAL                                          $ 121,173,000 $  89,630,000
                                                ============= =============



                  BIG DOG HOLDINGS, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                                (Unaudited)


                     Three Months Ended             Six Months Ended
                          June 30,                      June 30,
                ----------------------------  ----------------------------
                    2007           2006           2007           2006
                -------------  -------------  -------------  -------------

NET SALES       $  55,854,000  $  53,178,000  $ 100,078,000  $  91,848,000
COST OF GOODS
 SOLD              25,356,000     23,795,000     46,281,000     42,369,000
                -------------  -------------  -------------  -------------
GROSS PROFIT       30,498,000     29,383,000     53,797,000     49,479,000
                -------------  -------------  -------------  -------------
OPERATING
 EXPENSES:
  Selling,
   marketing and
   distribution    25,578,000     24,210,000     50,916,000     45,750,000
  General and
   administrative   2,419,000      2,102,000      4,474,000      4,122,000
  Depreciation
   and
   amortization     1,673,000      1,531,000      3,488,000      2,857,000
                -------------  -------------  -------------  -------------
    Total
     operating
     expenses      29,670,000     27,843,000     58,878,000     52,729,000
                -------------  -------------  -------------  -------------
INCOME (LOSS)
 FROM
 OPERATIONS           828,000      1,540,000     (5,081,000)    (3,250,000)
INTEREST INCOME         3,000          2,000          6,000          4,000
INTEREST
 EXPENSE           (1,132,000)      (516,000)    (1,838,000)      (785,000)
                -------------  -------------  -------------  -------------
INCOME (LOSS)
 BEFORE
 PROVISION
 FOR (BENEFIT
 FROM) INCOME
 TAXES               (301,000)     1,026,000     (6,913,000)    (4,031,000)
PROVISION FOR
 (BENEFIT FROM)
 INCOME TAXES        (113,000)       385,000     (2,590,000)    (1,512,000)
                -------------  -------------  -------------  -------------
NET INCOME
 (LOSS)         $    (188,000) $     641,000  $  (4,323,000) $  (2,519,000)
                =============  =============  =============  =============
NET INCOME
 (LOSS) PER
 SHARE
  BASIC         $       (0.02) $        0.07  $       (0.46) $       (0.28)
                =============  =============  =============  =============
  DILUTED       $       (0.02) $        0.06  $       (0.46) $       (0.28)
                =============  =============  =============  =============

WEIGHTED
 AVERAGE SHARES
 OUTSTANDING:

  BASIC             9,415,000      9,177,000      9,375,000      9,135,000
                =============  =============  =============  =============
  DILUTED           9,415,000     10,308,000      9,375,000      9,135,000
                =============  =============  =============  =============

Contact Information: For Further Information: Big Dog Holdings, Inc. 121 Gray Avenue Santa Barbara, California 93101 www.bigdogs.com www.walkingcompany.com Contact: Alexis Dilg Investor Information (805) 963-8727, ext. 1302