No Fear Retail Stores Press Forward With Orange 21 Merger Proposal

Press Release

• November 12 2008
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OFFICIAL PRESS RELEASE - CARLSBAD, Calif.—(BUSINESS WIRE)—November 11, 2008—No Fear Retail Stores, Inc. (“No Fear Retail”) today responded to the refusal of Orange 21 Inc. (“Orange 21”) (NASDAQ: ORNG) to enter into good faith negotiations regarding a merger of the two entities.

On November 11, 2008, No Fear Retail sent a letter to the Board of Directors of Orange 21 stating:

“No Fear Retail Stores is disappointed with Orange 21’s unwillingness to enter into good faith negotiations regarding a potential merger transaction. As outlined in our letter dated November 3, 2008, we believe significant synergies exist between the two businesses. Based on our review of the public financials of Orange 21, we believe those synergies total several million dollars. Areas identified include real estate and facilities, accounting and audit expense, human resources, information technology, warehousing, distribution, legal, insurance and benefits. While it is important to control costs in these challenging times, we also believe it is important to prudently implement these measures while preserving the integrity of the brand and minimizing the impact on key sales drivers. Having founded Orange 21, we know that the heart of the business is the athletes, influence makers and employees who live and breathe the ethos that Spy represents. Maintaining these relationships is critical to preserving the value of the brand and ultimately value for all shareholders.

On October 29, 2008, we submitted a brief due diligence request list that would allow us to refine our synergies analysis. With the cooperation of the Board in providing this basic additional financial information, we are confident in our ability to enhance our proposal. Given our existing facility and headquarters in Carlsbad and our history with the business, we are in a unique position to implement synergies while maintaining the integrity and momentum of the brand. We propose prudently allocating select cost savings for key initiatives to drive sales, including additional display cases for new and existing retail accounts, product development expense for new styles and targeted promotional activities. We believe this reallocation of expenses is necessary, even in a challenging environment, to preserve brand integrity and maintain sales momentum.

As stated previously in our letters dated October 16, 2008 and November 3, 2008 which we filed on EDGAR, we feel it is in the best interest of all parties in light of the current economic environment to explore a merger that could create significant cost savings. We remain committed to exploring a merger to drive long term shareholder value and plan to continue to communicate our proposal directly to shareholders as permitted under applicable law.

Frankly, we have been surprised by the manner in which the process has been handled to date, given the Board’s fiduciary responsibilities to act in the best interests of Orange 21’s stockholders. No rationale was provided in the Company’s November 4th 8-K filing for the Board’s decision to not pursue negotiations nor was any rationale communicated directly to No Fear Retail. This lack of communication is especially disappointing given the fact that No Fear Retail is one of Orange 21’s largest customers. We hope the Board will reconsider our proposal and enter into meaningful negotiations regarding a merger of the two entities for the benefit of Orange 21’s stockholders. Time is critical in the current climate and, given our understanding and historical involvement in the business, we stand ready to move quickly to negotiate and close a transaction.”

About No Fear Retail Stores, Inc.
No Fear Retail Stores, Inc., www.nofear.com, is a retailer of action sports and casual youth lifestyle apparel and accessories targeting young adults and teens. No Fear Retail sells a broad range of apparel and accessories, primarily under the No Fear® and So Cal™ brands. In addition to proprietary brands, No Fear Retail sells apparel and accessories consistent with its lifestyle focus from leading third party vendors. As of October 31, 2008, No Fear Retail operated 48 retail stores in six states predominately in the southwestern United States. No Fear Retail is headquartered in Carlsbad, California.