Exhibit 99.1

SKECHERS U.S.A., INC.
TRANSCRIPT OF EARNINGS CONFERENCE CALL
JULY 24, 2003


OPERATOR: Good afternoon ladies and gentlemen, and welcome to your Skechers USA
second quarter six month 2003 earnings conference call. At this time, all lines
have been placed on a listen-only mode and the floor will be opened for
questions following today's presentation. It is now my pleasure to introduce
your host, Mr. Brian Yarbrough. Sir, you may begin.

BRIAN YARBROUGH: Good afternoon and thanks for joining us today. Before we
begin, I'd like to note that today's call may contain forward-looking
statements, and as a result of various risk factors, actual results could differ
materially from those projected in such statements. These risk factors are
detailed in Skechers filings with the SEC. I'd now like to turn it over to David
Weinberg, Chief Financial Officer.

DAVID WEINBERG: Thank you, Brian. Good afternoon and thank you for joining us
today to review Skechers second quarter and six months 2003 results. As always,
we will open the call to questions following my prepared comments.

            Second quarter 2003 sales were 229.3 million compared to 256.7
million in the second quarter of 2002. Net loss per share was 6 cents. For the
six month period ended June 30, 2003, net sales were 437.9 million compared to
net sales of 501.6 million in the first six months of the prior year. Diluted
earnings per share for the first six months were 17 cents.

            We believe several factors resulted in our reported sales and
earnings decline in the second quarter '03 compared to second quarter '02.
First, the difficult retail environment continued to negatively impact our
sales. While our wholesale unit volumes were 1.5% below last year's level, there
was a 14.5% decrease in the average price per pair, due to product mix at lower
price points and higher levels of closeouts.

            Second, we increased advertising and marketing expenses in the
second quarter in an effort to stimulate demand at retail, in order to increase
the sell throughs and relieve the inventory levels.

            Finally, as we build our business in newly established direct
markets, including Canada, Spain, Portugal, and the Benelux region we have
encouraged startup expenses and not realize high enough sales volumes to
generate optimal operating margins.

            The product and brand have been well received in many European
markets, but we are not growing the brand as quickly as anticipated in some
regions. We expect sales to ramp up as these subsidiaries become an integral
part of our international sales in the long-term.

            As I mentioned on the first quarter '03 conference call in April, we
significantly increased our inventory commitments during the fourth quarter of
2002 and first quarter of 2003. In Q2, we diligently attempted to sell through
inventory, with a directed advertising to generate at once orders during the
second quarter. We were not as successful as we had anticipated in this
endeavor. Additionally, we were not able to achieve our inventory goals due to
early shipments of new inventory from the factories during the second quarter.

            We will continue to work through our inventory levels, which will
have an adverse impact on margins in the short-term. On a positive note, at June
30th, our total commitment to inventory, which includes our units on hand and in
production, was only 2.2% higher than last year. We have seen sales pick up
slightly in the latter part of the second quarter, and we believe that the
inventory will be in line by yearend 2003.

            We continue to expect the tough retail environment to be a near term
challenge, and believe that with our flexible business model, diversified
distribution channels, and financial strength, we can maintain our position in
the marketplace.

            We have many of our major initiates in place. We will reevaluate and
adjust our overhead as needed over the next six months. We are currently
entering new footwear markets through the introduction of new lines to the
international market, and expanding our existing lines, and signing new
licensing deals for the domestic and international markets. We have also opened
key retail stores in North America and Europe, and we'll continue to selectively
do so through the remainder of the year.

            With core proven styles and inventory for fall shipments, we are
also focusing on new products that we feel will be key selling styles for back
to school, and looking at what we think the trends will be for spring '04. In
June and July, we shipped some back to school product that has received a good
reception, but it is too early to tell how sales will be as this product has not
hit retail shelves as yet.

            We believe that the Skechers Sport Stamina and Skechers Sport
Premium will be leading Skechers styles for men, women, and kids for fall, based
on the present reaction at retail from initial shipments, and from accounts who
are expanding their offering based on early sell throughs.

            While sport is very strong for Skechers, we also have key styles in
Skechers USA, Something Else from Skechers, and Skechers Kids. These lines have
grown into integral parts of our product offering, and show the diversity of
Skechers. The major department stores have supported the Michele K line, are
continuing their offering for fall, including Bloomingdale's, which has
increased the store count from five in spring '03 to 17 in fall '03.

            This season will mark the official launch of Mark Nathan, a new line
of high end designer footwear for men. The line was tested with a soft launch in
Nordstrom stores in Q2, and had a positive reaction at retail, and has booked
strong at major fashion independents for fall '03, and has been well received by
major department stores that review for holiday '03. We expect this line to
appear at better department and specialty men's stores.

            During our pre-line meetings at our headquarters over the past two
weeks, we have seen numerous major accounts react very strongly to our spring
'04 offering, with some accounts looking to Skechers for expanded looks, such as
more tailored junior fashion heels and sandals. We feel optimistic that spring
'04 will be strong if the retail environment improves, though we will have a
better sense after WSA in early August.

            We continue to view our international business as a key area for
growth over the long-term, with estimated sales anticipated at 20-25% of our
total sales in two to four years. We're looking at effective means to further
build the brand and increase our sales in the diverse global marketplace.

            We now handle our business directly in thirteen countries - England,
Ireland, Germany, France, Italy, Austria, Switzerland, Spain, Portugal, Belgium,
Luxembourg, Holland, and Canada, through eight subsidiaries. Our cost structure
is in line with what we anticipated for building these direct operations, and
implementing the necessary infrastructure, including our distribution center in
Liege, Belgium.

            As we expand our product offering and build the brand through
marketing efforts and the opening of retail stores in fine locations like
Madrid, where we opened a store this quarter, we expect our European subsidiary
sales to benefit from these efforts. In regards to our international retail
operations, we expect to open our first store in the Netherlands, Amsterdam, our
third flagship store in Germany, Dusseldorf, and our fourth store in England,
Birmingham, in Q3. Additionally, through our distributor in Japan, the fifth
Skechers Japanese retail location will be opening in Suzuka, later this year.

            As I mentioned on the Q1 call in April, we are continuously speaking
with distributors in South America, Central America, and other parts of the
world, about opening Skechers retail stores, as we believe these will positively
impact the brand's presence and our sales.

            In the second quarter, we continued to open Skechers retail stores
in the domestic market to further build brand exposure and test products,
including a concept store in the Houston Galleria, and the relocation of our
Beverly Center store to the main level, near the Gap, Baby Gap, Betsy Johnson,
Pottery Barn, and Hugo Boss. We plan to open another 10-15 domestic retail
stores by yearend.

            Moving on to the licensing, we recently expanded our scope of
licensed products that reflect our image in international markets. In the first
quarter, we signed a licensing agreement with Mitsui & Company for apparel and
accessories for men, women, and kids in Japan, and in the second quarter with
Multi Group Inc. in Canada for infant, toddlers, and kids apparel. We see these
two international licensing agreements as ideal opportunities to extend the
brand beyond footwear in key global markets, and believe there are additional
opportunities for Skechers branded products in the domestic and international
market.

            Skechers sports socks are now available in major department stores,
while Skechers kids apparel will be available to consumers in August at
department stores across the United States. Skechers sports socks for men and
women will follow in late fall, and Skechers collection outerwear is scheduled
for holiday '03 in store delivery.

            With the availability of Skechers licensed products, Skechers is
growing into a head to toe lifestyle brand. We now expect a minimum of 7-8 cents
pre-tax profit from licensing revenues during 2004.

            Finally, as a lifestyle footwear company with a strong image, our
consistent exposure in multiple mediums is essential to our brand image. Print
advertising remains the center point of our advertising plan, but is supported
by television, visual merchandising, and additional mediums, including mall
kiosks.

            In Q2, our advertising expenditures were higher due to Easter
occurring later in the year, as well as aggressive advertising efforts and
marketing related promotions to create a demand in the marketplace. In Q2 '03,
we spent 24.1 million in advertising and marketing versus 17 million in Q2 '02.
We also ramped up our advertising with a new kids television commercial and new
print ads to increase sell throughs and reduce our inventory.

            In Q3, the focus will again be on print, with new campaigns for
Skechers Sport, Something Else from Skechers, and Skechers Collection. These are
predominantly single image, single page ads that spotlight the footwear in a
direct and attitude intensive way. We will also use the images in multiple
shopping centers across the country, target the top malls where teens and their
parents will be shopping for back to school. New Michele K ads, featuring the
designer will also begin appearing in fall books.

            Now turning to our second quarter and six month numbers. For the
second quarter, sales were 229.3 million compared to 256.7 million last year.
The lower sales in 2003 were due to lower consumer spending, decreased mall
traffic, and abnormal weather conditions.

            Gross profit was 89.6 million versus 105.8 million in the same
period a year ago. Second quarter gross margins decreased 210 basis points to
39.1% compared to last year's gross margin of 41.2%. Our gross margins decreased
due to taking a more accommodative stance with our wholesale accounts, and
higher levels of clearance product.

            Total operating expenses as a percentage of sales increased to 39.2%
compared to 27.4% in the second quarter of fiscal 2002. We have a relatively
fixed operating expense structure, and when sales drop below a certain level,
our expenses tend to de-leverage as a percentage of sales.

            Second quarter selling expenses increased to 28.8 million as
compared to 21.4 million in the prior year period. The increase in selling
expense is due to higher advertising and marketing expenses, offset somewhat by
lower sales commissions and tradeshow expenses.

            On a percentage basis, advertising and marketing expense was 10.5%
of sales in the second quarter of 2003 as compared to 6.7% in last year's second
quarter. As I previously mentioned, our advertising expense increased in part to
the shift in advertising from first quarter 2003 to second quarter, caused by
Easter occurring in April this year, and also our efforts to support the brand
and create consumer demand to reduce our inventory level.

            General and administrative expenses were 61.1 million, representing
26.6% of sales, compared to 48.9 million, or 19% percent of sales in last year's
second quarter. We realized expense increases in rent of 2.6 million,
depreciation of 1.2 million, insurance of 1 million, and personnel service costs
and related taxes of 4.8 million.

            These expenses increased due to the addition of 18 domestic and 4
international retail stores, international showrooms, and establishing
international subsidiaries in Spain, Canada, and the Benelux region, including
our European distribution center in Belgium.

            The income tax provision for the three months ended June 30, 2003
was a benefit of 211,000. The second quarter was adversely affected by
approximately 800,000 dollars to adjusted tax provisions for the current
projected fiscal tax rate of 43.1%, which is higher than the rate forecast in
the first quarter.

            Net loss for the second quarter was 2.1 million, compared to net
earnings of 21.3 million in the prior year period. Loss per share was 6 cents on
37 million, 782 thousand shares outstanding compared to diluted earnings per
share of 52 cents on 41 million, 909 thousand shares outstanding in the second
quarter of last year. We did not assume the conversion of shares that would be
issued under our convertible notes for the second quarter of 2003 loss per
share.

            For the six months ended June 30, 2003 net sales were 437.9 million
versus net sales of 501.6 million for the first six months of 2002. Gross profit
was 179.9 million compared to 208.3 million for the same period of the prior
year. Selling expenses for the first six months of 2003 were 45.9 million
compared to 40.1 million for the first six months of 2002. G&A expense was 118.7
million compared to 98.5 million in the same period last year.

            In total, for the first six months of 2003, operating expenses were
164.6 million compared to 138.5 million for the same period last year.

            Net income for the first six months of 2003 was 6.3 million, or 17
cents per diluted share compared to 41.5 million, or $1.05 per diluted share in
the same period last year.

            At June 30, 2003 cash on the balance sheet stood at 41.5 million,
which is a decrease of 33 million from June 30, 2002. The company had no
short-term borrowings as of June 30, 2003. Trade accounts receivable at quarter
end were approximately 154.9 million as compared to 185.1 million at June 30,
2002. Our DSO's at June 30, 2003 were 54 days versus 56 days at June 30, 2002.
Inventory at quarter end was 217.1 million, representing an increase of 78.1
million or 56.2%, from 138.9 million at the end of June 2002.

            Working capital rose 3.9% to 292.7 million at quarter end versus
281.7 million at June 30, 2002. Long-term debt was 120.7 million compared to
120.5 million at June 30, 2002. Of this amount, 90 million is related to our
convertible debt offering. The remainder is related to mortgages on our
distribution center and corporate headquarters, along with capital lease
obligations.

            Shareholder's equity at quarter end increased 7.1% to 269.2 million
versus 251.4 million at June 30, 2002. Capital expenditures for the second
quarter and six months 2003 were approximately 3.3 million and 11.1 million
respectively, primarily stemming from new store openings. We expect cap ex to be
around 25-30 million for the full year.

            We currently expect third quarter sales to be between 205-215
million compared to third quarter 2002 sales of 261.1 million. We also expect to
see some pressure on gross margins, as we believe freight expenses will increase
throughout the year and we expect to continue working through our inventory
position.

            In addition, we see pressure on operating expenses as a percentage
of sales due to our fixed operating cost structure. Because of this and the
challenging retail environment which we expect to continue through the end of
the year, we now expect a loss per share of 5 cents, to diluted earnings per
share of 5 cents in the third quarter, compared to diluted earnings per share of
35 cents in the same period last year.

            With many new initiatives now in place, we will continue to closely
monitor our operating expense structure over the next several months, and adjust
our expenses so that they are in line with our expected sales. We will take a
detailed look at each expense line item to find ways to lower our cost structure
and maximize our operating margins.

            While it is early in the season and the retail environment is tough,
Skechers back to school product has been well received at retail, and we believe
that we can maintain our position in the marketplace. We will continue to
implement our initiatives already in place and support our brand with new
advertising and marketing campaigns.

            In closing, we will continue to focus on controlling our costs and
managing our business during these difficult times, looking at opportunities
that will make Skechers more profitable and better position us for the
long-term. And now I would like to turn the call over to the operator to begin
the question and answer portion of the conference.

OPERATOR: Thank you. The floor is now open for your questions. If you have a
question, please press the numbers one followed by four on your touchtone keypad
at this time, please. If at any point your question has been answered, you may
remove yourself from the queue by pressing the pound key. Please hold while we
poll for questions. The first question is coming from David Turner of BBT. Your
line is live.

DAVID TURNER: Thanks. Good morning. A question regarding the inventory. I know
this is peak shipping season and there was some language in the press release,
as well as the prepared comments that indicated sales picked up in late June, so
maybe if we took a snapshot of inventory as of today or last week, would it be
significantly down from the June 30th number?

DAVID WEINBERG: It depends what you mean by significant. It would certainly be
down. And a big piece of that is because we've absorbed the in transit. Our
inventory is made up of three pieces, and two of them are reflected on the
balance sheet. I think we've discussed this before. It includes the inventory
that we physically have control over, which would include our distribution
centers in the United States and in Belgium, and the inventory that's on the
shelves in all our stores.

            In addition, since our terms are FOB, port when it leave the Orient,
or any country that we buy from, all the goods in transit are considered our
inventory. And obviously the third piece is our production, that you don't see
in our balance sheet, because we're not completely vertical. That stays at
factory level.

            Basically it's fair to say our inventory was up certainly in our
stores, because of more stores, and our distribution center, because we were
over inventory. However, the part that's related to work in process and
production was where the big swing came. Our work in process is down about
35-40% from where it was this time a year ago, so a lot of it came earlier and
less of it is in production, to come at a later period of time. Which is a
timing issue to get down to that fine of an inventory. And because the factory
base is somewhat slower and anxious to get shoes out because of the business
environment, predominantly in the Orient, our in transits, which we do pick up
on our inventory, were up significantly over last year, which is our new product
that came in for July and August.

            So it's safe to say that our production is down now sine June 30th,
our in transits on the water are down since June 30th, since that's been
absorbed and we're now going to slower production times, and our inventory on
hand is slightly down since the quarter end, so we've made some progress. In
addition, we continue to sell it off, but we just haven't got the ship, a lot of
that stuff is to be delivered through the third quarter, so more of it is spoken
for than would have been at June 30th. So, while it's not completely done nor
completely out of the woods, we feel we've made significant progress and feel
very comfortable in the fact that they'll be in line by the end of the year.

DAVID TURNER: Great. And is there any one product line or category that is at
the most risk, in terms of margin pressure? Or is it just kind of broad-based
and totally spread out amongst your various product lines?

DAVID WEINBERG: It's spread out. There's different amounts in different
categories. I think it's safe to say that the retro portion of our business was
the most difficult throughout the year, and probably had the most pressure, and
is being cleaned out and closer to being clean. The rest of it would

be more issues of some over-inventory and not really selling them at
significantly lower prices. So we have a combination, so it goes top to bottom.
And I think retro's probably the most difficult for us, and then it's pretty
evenly distributed throughout the rest of the brands.

DAVID TURNER: Okay. And then one last question, kind of playing devil's
advocate. Has there been any thought to maybe shelving or walking away for a
period of time, some of the product lines that aren't working, and taking some,
as well as walking, benefiting from the subsequently reduced marketing and
inventory, or I guess working capital requirements?

DAVID WEINBERG: Sure, we think about those things all the time. But we're not
currently involved or growing any business line that we don't think has
significant potential as it goes forward. So while it might not be readily
advisable, when product doesn't work for us, we do scale it down significantly,
we do take it out of our advertising mix, and it takes a while to work through,
because we don't want to dump it all at once. But those thought processes and
decisions about product lines and initiatives, whether it's retail stores or
subsidiaries, are constantly being thought of. It's just not that easy to react
within a single quarter when it happens, but we are addressing them and
certainly thinking hard about them.

DAVID TURNER: So it sounds like maybe second half, you might see some
manifestation of the thought process, about tightening up? Maybe that's the
wrong term, but just - I'll use that term, tightening up.

DAVID WEINBERG: I think it's fair to say by the end of the year, we'll have a
better idea of what the company really is. And when we have it, you'll have it.
It'll pass through. You'll see the company shape that's taking for 2004 and
where we intend to be aggressive and grow it up. So yeah, I think by the end of
the year, by the time you get finished with WSA and see the reaction to our
brand from our customers and start monitoring those sell throughs and see where
our strength lies, and we do think it's coming back, you'll have a better idea
of what the company will look like going into 2004.

DAVID TURNER: Great. See you in Las Vegas. Thanks.

OPERATOR: Thank you. The next question is coming from John Zolidis of Buckingham
Research. Your line is live.

JOHN ZOLIDIS: Hi, good morning. I guess a follow up question on the inventory.
Rather than try to project where sales and backlog's going to be at the end of
the year, I wonder if you could just give us an idea of, ideally, if you had
your choice, where would you have your inventories be right now, so we can kind
of quantify the overage?

DAVID WEINBERG: I think it's fair to say that they should be equivalent to last
year, with increases for our new product lines, our additional stores, and our
additional volume in Europe. So, say last year plus maybe 10-15%.

JOHN ZOLIDIS: So, even with projected sales declines in the third quarter, you
think your inventory should be up 10-15%?

DAVID WEINBERG: Yes, be able to clean it out. But yeah, because we have to
support the new brands and we have to have a basic inventory. And we have some
new divisions that we're selling out of stock, and we obviously have to support
our new stores and our new subsidiaries so that there's a little inventory build
that comes prior to the sales increasing in those particular areas, and then
flattens out if there's no increase in the initiative.

JOHN ZOLIDIS: Okay. So that implies inventory of about 154 million, so you're
about 62 million dollars in extra inventory?

DAVID WEINBERG: You mean like today?

JOHN ZOLIDIS: Yeah, at the end of the quarter.

DAVID WEINBERG: Yeah, if you count the in transits and everything, sure. But a
lot of that is early inventory, so there's a timing issue as well. I don't think
we have 62 million to sort of sell down.

JOHN ZOLIDIS: Okay. And then on the infrastructure build, I know you're saying
your operating expenses are fixed, so you (inaudible) with lower sales, but it
looks like the operating expense is actually growing. Is there any thought to
maybe slowing down some of the infrastructure build until we start to get some
traction with the better product?

DAVID WEINBERG: Yeah, same answer as the other question. We think about that all
the time. But when we say fairly fixed, we're talking within categories and
within initiatives. In other words, when we opened most recently our office in
Benelux and our office in Italy, it comes with some, at the current time, at
least, current quarter, fixed expenses such as the sales force and rent of the
showroom, and some extra inventory to sell into that's more sellable in Italy.
That doesn't mean that that operating expense structure is fixed an
indeterminate period of time, because each one will be evaluated.

            The same is true of opening stores. We opened ten stores the first
half of this year through the second quarter domestically and two
internationally. We'll open another eleven stores domestically in the third
quarter. And those operating expenses and overheads to open them and start them
are fixed in the period of time they're opened, but not for an exaggerated
period of time.

            So it's safe to say that as we slow down our infrastructure build,
as we get our stores more on line and we slow down the growth of stores and the
growth of subsidiaries, the growth in that overhead in a real dollar basis slows
down. And then of course, these are brand new initiatives, so we don't know how
profitable they'll be. But over the next year or so, obviously each one will be
evaluated and either taken down, or eliminated, or grown, depending on what it's
potential and what it can add to our bottom line. So over the next year or so,
we have a lot of flexibility winning those operating overheads.

JOHN ZOLIDIS: Okay. If you breakout the stores, are the stores profitable?

DAVID WEINBERG: The stores are profitable on the whole. They're certainly
profitable to four walls and as direct charges to them. They're less profitable
per store than they were last year, which also puts some operating pressure on
the overhead per dollar in the retail stores. So that's obviously the same issue
as everybody else in retail has with our comps being down, like everybody else -
puts more pressure on the operating overhead. We're addressing those things, and
we're re-evaluating our store position, our store openings, and the existing
stores as they are now. So it's a matter of re-evaluating, just like everybody
else.

JOHN ZOLIDIS: Okay. One final question, and then I'll hop off. It seems like the
biggest challenge has been this retro athletic trend, and the consumer has just
kind of not really accepted the Skechers brand in that product. The product
looked pretty good, and I think retail looked pretty good in the sell in was
pretty strong, but the sell through didn't match up to those expectations. Are
you seeing

any change in that retro athletic trend? Is it starting to trail off at all? Are
you seeing anything coming up on the horizon that maybe Skechers can take
advantage of, in terms of trends within footwear?

DAVID WEINBERG: It's very difficult to go through each one here, but in the
broad, macro sense of the question, yeah, we do see some trailing off of the
retro look. And we do see better acceptance, like I said in my prepared
statements, for the stamina that we're delivering, and other shoes like that,
and in some of our black and brown shoes. So yeah, we see increases outside the
retro look for us, and we'll be significantly curtailing it. And we think it is
slowing down, at least somewhat, in the marketplace, in general.

JOHN ZOLIDIS: Okay, great. Good luck, and I look forward to seeing the new
product at WSA.

OPERATOR: Thank you. The next question is coming from Dorothy Lakner (sp?) of
CIBC. Your line is live.

DOROTHY LAKNER: Thanks. Good morning everyone, or good afternoon, as the case
may be. Just to go back to inventories for a second, David, could you talk about
maybe just what carry over or older inventory represents as a percent versus the
year ago? I know you said that some of the inventory is early receipt, so it's
fresh. Hopefully the sell throughs are good, but what is that as a percent of
the business versus the year ago? And then, could you talk a little bit more
about different categories of sales? What's working the best? I know you spoke a
little bit to this in your prepared remarks, but for example, men's versus
women's, women's versus kids - how did they change as a percent of sales in the
quarter? And then maybe just sport versus the non-sport part of the equation -
how did those do in general as a percent of total sales in the quarter? Thanks.

DAVID WEINBERG: I don't remember exactly, but we had obviously less closeout
inventory last year than we did this year. Not to significantly quantify the
expense, we think it represents certainly less than 10% of the inventory on hand
and in production. So we've made big in-roads into it, and there's only some
left that we want to move out. So it's less of a problem than it was three
months ago, and it will be less of a problem three months from now.

DOROTHY LAKNER: So, is there less that you're doing through maybe off price
channels, or about the same level? Where do you...?

DAVID WEINBERG: Our sale through the off price channel, I think would
predominantly people like Marshall's and TJ Max, and things like that. It's up
slightly from last year, nothing that you'd call significant. We do have some
increases, but nothing that's outrageous. We've just taken our time moving it
through over a period of time. And we're moving some through our own outlets and
some of it overseas. And I will say we haven't significantly expanded our
distribution base. We have somewhat to move it out, obviously with the bigger
numbers. We're not doing what we think is a significant or anything that would
hurt the brand in the long-term.

            To your other question about changes in percentage of the business,
the big pieces of our business - women's, men's, and kids - as a percentage of
the overall have deviated less than plus or minus 1%. So in other words, the
percentage of the business that women's was last year was within 1% of this
year. Same for men's, obviously, men's and kids. So our mix hasn't changed
significantly since last year. And I forgot, was there a third part?

DOROTHY LAKNER: Sport versus non-sport.

DAVID WEINBERG: And sport versus non-sport remains the same. I think the sport
portion came down a little bit, but we anticipate with the stamina and the
premium, that will increase, and by the end of the year will be the same or
slightly higher as the overall portion.

DOROTHY LAKNER: Okay. And just one more thing, on just the average price per
pair sold - do you have any data you can give us on that?

DAVID WEINBERG: Like I said, it's down 14%. I think it's fair to say that on in
line product, our average selling price has been reduced somewhere in the 7-10%
range, across the broad range of categories we sell.

DOROTHY LAKNER: Okay, great. Thank you.

OPERATOR: Thank you. The next question is coming from Michael Ryan of Sidoti &
Company. Your line is live.

MICHAEL RYAN: Hi. I just have a quick question, going back to gross margins. I
just want to, obviously you've had pressure on the wholesale side, but I was
wondering how this held up internationally in the retail buseinss?

DAVID WEINBERG: In international, they were up slightly because of the benefit
we received from the Euro and dollar. And part of our strategy there was to cash
that back to our consumers, the retailer build. So margins are about the same in
Europe and internationally through our distributor base because it's cost,
certainly on a percentage basis. Less dollars per shoe, but the margins have
held up in international, and are down just slightly in our stores - not
significantly down in our stores. The biggest pressure was obviously from our
wholesale customers and some of the clearance items.

MICHAEL RYAN: Okay. And do you have a number on your operating cash flow in the
quarter?

DAVID WEINBERG: I think it was minus 37 million.

MICHAEL RYAN: And do you have any expectations for where cash flow is going to
be at the end of the year?

DAVID WEINBERG: We would anticipate that cleaning out the inventory and cleaning
out the receivables, given the fact that we're now getting 22 million a year in
depreciation, that we will rebuild a significant, if not all, the portion of
cash that we've used in the first six months.

MICHAEL RYAN: Okay, thank you.

OPERATOR: Thank you. The next question is coming from Stan Poser of Mosaic
Research. Your line is live.

STAN POSER: Good morning. I have a couple questions, again back to the
inventory. You said that about 10% of the inventory was the product that you
needed to liquidate. That's correct?

DAVID WEINBERG: Sell at clearance. I wouldn't necessarily liquidate, not all of
it is under water and at give away prices. But yeah, inventory that we consider
excessive, that we'd like to sell off during the six months.

STAN POSER: Then you said that you should have 15% more inventory than last year
in your perfect scenario. So that would put a gap in there of almost 14 million
dollars, even taking that 10% out. What makes up that difference right now? You
take out the 10%, you get o 196 million in current inventory to take out the
goods you're trying to clear, and then you, if you had the 15% more than last
year, you'd have 182. So there's a gap of around 14 million bucks there.

DAVID WEINBERG: The 14 million is the minimum, I think it's higher than that, of
the in transit. Our in transits are up well over 15 million dollars between last
year and this year, at the same period of time. In other words, if we had the
same amount of inventory in transit, you get right on top of your number.

STAN POSER: Okay And the new product that you have in transit and in production,
considering that business has been fairly tough lately, you've gotten good
indications from your customers that they are, that this merchandise is going to
be well received?

DAVID WEINBERG: Yeah. Right now it's more anecdotal than it is in fact, but
that's obviously the place we have to start with all increases. We're just going
through our pre-line, with all our major accounts are coming in before WSA. And
what we've been told is that they're a lot happier or a lot more excited, I
guess is the best word, about the line that's being offered now for spring than
they were last year at this time. So that's always a positive, and they've
obviously shopped some of our competitors in the marketplace. And they also seem
to be anticipating the deliveries of all the stuff for back to school that we're
just shipping now, because they feel that's a significantly better offering than
we had this past spring. So it's a very positive group of meetings, which bodes
well for the fourth quarter and the first quarter. But like I said, it's kind of
early to tell, other than that's a good start for us.

STAN POSER: And one last question about channels of distribution in the United
States. Besides your own retail stores, where are you seeing the strength and
where are you seeing the weakness, by channel?

DAVID WEINBERG: I think it varies. There are different pieces in retail around
the country that are getting stronger and weaker, where we see different
customers in different regions, and I don't think this would be a good place to
just discuss them by name.

STAN POSER: No, that's why I asked it the way I did. How about regionally in the
United States, where are you strongest?

DAVID WEINBERG: I think if I had to pick, the southeast would be the weakest and
the rest of them are close. There's difficulties, there's pluses and minuses
everywhere, it depends who they are. They actually change by customer within
some regions. But I don't see anybody in our customer base that's having an
outrageously strong retail season yet.

STAN POSER: Just to follow up real quick, there's not like, you wouldn't say
independent specialty is out-performing value department store, just in the
general sense, or anything like that?

DAVID WEINBERG: No, it's across the board because even within specialty stores,
some do better than others. And I think it's very specific to the customers and
their promotions, and their price points, and their customer base. And even
within the same customer, it varies regionally, so it's very difficult to just
pinpoint a channel.

OPERATOR: Thank you. The next question is coming from Derek Wenger of Jeffries &
Company. Your line is live.

DEREK WENGER: Thank you. Can you give me the depreciation and amortization level
for the second quarter? Also capital expenditures for the second quarter, and
then outlook for the year? And then lastly, when do you expect to give us some
color on whatever cost structure changes need to be made and how much you might
be able to save out of that?

DAVID WEINBERG: Depreciation was just short of 5.5 million for the quarter,
capital expenditures were 3.3 million for the quarter. Third part, sorry?

DEREK WENGER: Was there any amortization?

DAVID WEINBERG: No. Depreciation and amortization was a little less than 5.5
million.

DEREK WENGER: And the capital expenditures for the year, and then the color on
the cost cutting?

DAVID WEINBERG: As we said, capital expenditures for the year will still be in
the 25 million dollar range, and cost cutting will be probably - it's hard to
tell. We have no initiatives that we're ready to come public with, as I
mentioned in the previous question, between now and the end of the year. We
expect it'll be in the public domain of exactly what it'll be and how we're
setting up for 2004.

DEREK WENGER: But you don't have like a particular timeline that you want to be
able to come to the market and say this is our plan?

DAVID WEINBERG: Not yet.

DEREK WENGER: Okay, thank you.

OPERATOR: Thank you. The next question is coming from John Gordon of Deltec
Management. Your line is live.

JOHN GORDON: Good afternoon. I'd just like to step back and ask for your general
comments, because as I've been listening to the conference call, I can't help
but have in my mind the last scene in the Thelma and Louise movie. And the
increase in inventories is astounding, the increase in SG&A is remarkable, and
just from your tone of voice - and I'm only an amateur psychologist - but from
your tone of voice, I don't get any sense of urgency, that something's wrong and
something needs to be fixed, and yet obviously the share price reflects that at
least some other people think that.

            And I guess I'd just like to ask two questions. The first is, if you
went back to the beginning of this calendar year and you formulated your
expectations for the year, how far at variance from those expectations is the
current reality? And if it is a big variance, I guess I would think there would
be more of a sense of urgency in your voice. Secondly, since you seem to be
doing a lot of things on multiple fronts to grow the business, and yet you sort
of began with a good cash position and you have at least some capability of
generating meaningful cash, I'm wondering why you don't go in the opposite
direction and in fact shrink your business and just be profitable and return
excess cash to the shareholders. I'm frankly puzzled, distressed, upset,
whatever. And I'd love to just get your comments on how happy you think
shareholders should be and how happy you think we're going to be six, twelve, or
eighteen months from now.

DAVID WEINBERG: I never saw the end of Thelma and Louise, so I'm at a little
disadvantage of how that ended and what you mean. And as far as a sense of
urgency, I think the sense should be that we're not in panic mode. I don't think
anything that's happened internally should create a panic. We know we've had
issues. We had a problem. The year is not as stellar as we would have
anticipated. We started on a multiple number of initiatives that we're not ready
to pull the plug on yet. We have thought about whether it pays to shrink the
business or not, or whatever. We're certainly always working in what we feel is
the best interests of stockholders, since that's ultimately the value that's
perceived. And we realize that we have some things to fix, but I don't know that
sitting here in a panic, with a sense of urgency that we have to cut everything
off at the head would be a correct evaluation of how the senior management
feels, nor something that we would convey, because it's just simply not true.

            We don't think the business is out of control, we don't think, while
we've missed in certain instances and we certainly have places to go, we think
the brand is still strong, we think we'll come through our inventory issues
without any significant adversity to the brand or our potential as we go down
the road. We certainly hope and would anticipate that shareholders will be
happier in the next six to twelve months, should we reach our initiatives,
should these things start to turn money making. If not, we certainly have the
capacity to generate cash, given the fact that we have depreciation of 5.3
million, an operating loss of 2.2 million, and we think that's a significantly
bad quarter. So we have licensing revenue that's coming in. So I don't know that
anybody would assume it's doom and gloom, other than the stock price.

            We think we have a healthy company that's had a misstep. We've grown
dramatically, we've taken a piece of the marketplace. We've hit a plateau and
started to trend somewhat down, given that the tastes in the marketplace have
changed. We think we've set up all our initiatives, both internationally,
domestically, and in licensing, to take further value as we go down the road,
and I don't think it would be correct to just sit here in a sense of panic
saying we don't know what's going on and the business is in significant danger
of going away. I don't think any of that is true.

            So yeah, we've thought about everything, and everything will be
under advisement. But I don't know that it would be fair to say that we've just
started these initiatives, they're less than a year old, we have some
subsidiaries and some stores that haven't been open a month, but because of the
stock price, we should cut them all off, even if we think they're going to be
profitable in the next six months to a year. We have to give them somewhat of a
chance to mature, somewhat a chance to be evaluated, and then we'll take those
dramatic steps, if necessary, and certainly with an eye towards generating
significant cash for the latter part of this year and through 2004.

OPERATOR: Thank you. There appears to be no further questions at this time, Mr.
Weinberg.

DAVID WEINBERG: Okay. We thank and appreciate everybody in these tough times,
coming on this call. And we certainly anticipate more information being
disseminated and a better idea of what's going on. For those that are coming to
WSA, we think you'll see quite a better display from our customers and what they
feel about the product, and we hope to report through that for the end of the
year. Thanks again.

OPERATOR: Thank you. That does conclude today's second quarter six months 2003
earnings conference call. You may disconnect your lines at this time, and enjoy
your day.