NEW YORK--(BUSINESS WIRE)--Oct. 23, 2003--Alloy, Inc. (Nasdaq:ALOY), a media, marketing services and direct marketing company targeting the dynamic Generation Y population, today announced that Robert Bernard has been hired as the Chief Executive Officer of the Company's Retail and Direct Consumer division. Mr. Bernard's previous experience of over 25 years in the retail industry includes serving as President and Chief Executive Officer of the Limited Stores, a division of Limited Brands and President and Chief Operating Officer of J. Crew.

Commenting on the hiring, Matthew Diamond, Chairman and Chief Executive Officer of Alloy stated, "We are delighted to bring an executive of Rob's caliber into our organization. Together with Walter Killough, Jr. and the other senior members of our merchandise team, we believe that we now have a superior management foundation in place to maximize the value of our merchandise business. We are excited to have Rob spearheading the integration of the dELiA*s business and guiding our overall merchandise business towards a potential strategic transaction in the future."

At this time, Alloy is also revising its financial expectations for the third fiscal quarter ending October 31, 2003 ("third fiscal quarter") and fiscal year ending January 31, 2004 ("fiscal 2003"). Due primarily to weaker than anticipated catalog performance, together with lower than expected sales of newspaper and broadcast advertisements, we have revised our expectations to the following:

• Third fiscal quarter merchandise revenues of $49 million to $51 million
• Third fiscal quarter sponsorship revenues of $57 million to $59 million
• Third fiscal quarter diluted loss per share of ($0.11) to ($0.06)
• Third fiscal quarter Adjusted EBITDA(a) of $2 million to $4 million
• Fiscal 2003 merchandise revenues of $190 million to $200 million
• Fiscal 2003 sponsorship revenues of $185 million to $195 million
• Fiscal 2003 diluted loss per share of ($0.25) to ($0.15)
• Fiscal 2003 Adjusted EBITDA(a) of $11 million to $15 million

(a) Adjusted EBITDA is defined as earnings before interest and other income/expense, income taxes, depreciation and amortization, and stock-based compensation expense.

Definitive fiscal third quarter financial results will not be available until Alloy's next earnings release, which currently is planned for the week of December 8th.

Mr. Diamond concluded, "We remain leaders in our various businesses and continue to believe in the long-term growth prospects of both our sponsorship and merchandise franchises. We believe we have the premier consumer database of Generation Y names, a stable of strong consumer brands, a comprehensive set of youth-focused media and marketing services assets and a powerful media sales force. Alloy continues to generate substantial Adjusted EBITDA. We have now made significant personnel additions to help drive improved performance across the board and better position our businesses for future strategic, value-creating transactions. With our strong financial standing, we anticipate delivering improved financial results in future years."

About Alloy

Alloy, Inc. is a media, marketing services and direct marketing company targeting Generation Y, a key demographic segment comprising the more than 60 million boys and girls in the United States between the ages of 10 and 24. Alloy's convergent media model uses a wide range of media assets to reach more than 25 million Generation Y consumers each month. Through Alloy's 360 Youth media and marketing services unit, marketers can connect with the Generation Y audience through a host of advertising and marketing programs incorporating Alloy's media and marketing assets such as direct mail catalogs, magazines, college and high school newspapers, Web sites, school-based media boards, college guides, and sponsored on- and off-campus events. Alloy generates revenue from its broad reach in the Generation Y community by providing marketers advertising and marketing services through 360 Youth and by selling apparel, accessories, footwear, room furnishings and action sports equipment directly to the youth market through catalogs, Web sites and retail stores. For further information regarding Alloy, please visit our Web site (www.alloy.com) and click on "Investor Info". Information on 360 Youth's marketing services can be found at www.360youth.com.

This announcement may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding our expectations and beliefs regarding our future results or performance. Because these statements apply to future events, they are subject to risks and uncertainties. When used in this announcement, the words "anticipate", "believe", "estimate", "expect", "expectation", "project" and "intend" and similar expressions are intended to identify such forward-looking statements. Our actual results could differ materially from those projected in the forward-looking statements. Additionally, you should not consider past results to be an indication of our future performance. Factors that might cause or contribute to such differences include, among others, our ability to: increase revenues, generate high margin sponsorship and multiple revenue streams, increase visitors to our Web sites (www.alloy.com, www.ccs.com, and www.danscomp.com) and build customer loyalty; develop our sales and marketing teams and capitalize on these efforts, develop commercial relationships with advertisers and the continued resilience in advertising spending to reach the teen market; manage the risks and challenges associated with integrating newly acquired businesses; and identify and take advantage of strategic, synergistic acquisitions and other revenue opportunities. Other relevant factors include, without limitation: our competition; seasonal sales fluctuations; the uncertain economic and political climate in the United States and throughout the rest of the world and the potential that such climate may deteriorate further; and general economic conditions. For a discussion of certain of the foregoing factors and other risk factors see the "Risk Factors That May Affect Future Results" section included in our annual report on Form 10-K for the year ended January 31, 2003, as amended, which is on file with the Securities and Exchange Commission. We do not intend to update any of the forward-looking statements after the date of this announcement to conform these statements to actual results or to changes in management's expectations, except as may be required by law.

CONTACT: Alloy, Inc. Sam Gradess, 212-244-4307 or PR21, Inc. Investor Relations: AJ Goodman, 212-299-8888 SOURCE: Alloy, Inc.