PRESS RELEASE


August 2008

New York & Company, Inc., a specialty apparel chain with 596 retail stores, announced results for the second quarter ended August 2, 2008. The results of operations discussed below are for the Company's continuing operations only, the New York & Company brand.

For the second quarter of fiscal year 2008, net sales were $295.7 million, as compared to $285.0 million for the second quarter of fiscal year 2007. Comparable store sales for the second quarter of fiscal year 2008 decreased 2.2%, compared to a 4.9% increase in the prior year second quarter. Net income from continuing operations for the second quarter of fiscal year 2008 was $8.6 million, or $0.14 per diluted share, as compared to prior year second quarter net income from continuing operations of $5.0 million, or $0.08 per diluted share, representing a 75% increase in earnings per diluted share.

For the six month period ended August 2, 2008, net sales were $565.7 million, as compared to $559.2 million for the six months ended August 4, 2007. Comparable store sales decreased 4.3% for the six month period ended August 2, 2008, as compared to a 2.0% increase in the prior year period. Net income from continuing operations for the six month period ended August 2, 2008 was $15.3 million, or $0.25 per diluted share, as compared to prior year six month net income from continuing operations of $10.2 million, or $0.17 per diluted share, representing a 47% increase in earnings per diluted share.

Richard P. Crystal, New York & Company's Chairman and CEO, stated: "We are pleased to continue our positive momentum and deliver better than expected second quarter results. Our performance this quarter demonstrates the success of our strategies to maximize profitability in a tough environment and our ability to deliver compelling assortments and value to our customers. During the quarter, our sales met our expectations and we achieved a significant increase in gross profit margin driven by the strength of our offerings and our actions to tightly control inventory and eliminate non brand-building promotions. As we begin the second half of the year, we believe we are well positioned to accomplish our goals and will continue to emphasize the strategies that generated our strong first half performance."

Significant highlights with respect to the second quarter included the following:

A favorable customer response to merchandise assortments, which, coupled with the elimination of non-brand building promotions, resulted in a 230 basis point increase in gross profit margin versus the same period a year ago;

A 22.3% decline in inventory per average store as compared to the end of last year's second quarter. This reduction reflects the Company's planned optimization of inventory flow and establishes inventory support at the proper level;

Controlling costs which resulted in selling, general and administrative expenses declining by 1.6% on an average store basis;

The opening of 10 new stores during the quarter, expanding the store base to 596 stores and 3.4 million selling square feet; and

Further strengthening of the balance sheet which resulted in a cash balance of $87 million versus $27 million at the end of last year's second quarter.

Outlook

The Company expects to continue its successful strategy of improving margin through targeted well-planned promotions and tight inventory control during what we anticipate to be a challenging business environment throughout the third and fourth quarters.

The Company's outlook for the third quarter of fiscal year 2008 reflects comparable store sales in the low to mid negative single-digit range with gross margins improving versus the same period a year ago. This outlook includes the effect of a shift in the timing of a key promotional program from the last week of the third quarter into early November in order to optimize sales and margins for the fall season. The Company's current outlook for earnings per diluted share in the third quarter of fiscal year 2008 is in the range of $0.08 to $0.12. This compares to actual third quarter of fiscal year 2007 earnings per diluted share of $0.09. During the third quarter of fiscal year 2008, the Company plans to open approximately five stores, close two stores and remodel seven stores, ending the quarter with approximately 599 stores and 3.4 million selling square feet.

The Company expects comparable store sales to be in the low to mid negative single-digit range for the full fiscal year 2008 and now expects earnings per diluted share to be in the range of $0.52 to $0.60. This compares to the Company's previous guidance range of $0.44 to $0.54 and compares to actual fiscal year 2007 earnings per diluted share of $0.44.

During fiscal year 2008, the Company plans to open 25 to 30 stores, close approximately 12 stores and remodel approximately 13 stores, ending the fiscal year with 591 to 596 stores and approximately 3.3 million selling square feet in operation, with new stores representing approximately 105,000 selling square feet. Capital expenditures are estimated in the range of $52.0 million to $54.0 million in fiscal year 2008 versus $75.5 million in fiscal year 2007. Depreciation expense for the year is estimated at $44.0 million.


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