URGI United Retail Grp. (MM)

United Retail Group, Inc. (NASDAQ-NMS: "URGI") today announced that net sales increased 4% to $32.8 million during July 2006 from $31.5 million during July 2005. Comparable store sales increased 4% for the month on top of a 17% increase in July 2005. Net sales increased 5% for the second fiscal quarter to $120.9 million from $114.7 million in the same quarter last year. Comparable store sales increased 6% for the fiscal quarter on top of a 15% increase in the same quarter last year. Net sales increased 4% for the fiscal year to date to $230.3 million from $221.2 million in the same period last year. Comparable store sales increased 5% for the fiscal year to date on top of a 13% increase during the same period last year. Comparable store sales data does not include online ("Shop @ Home") sales. Shop @ Home sales increased 49% for the month of July, 48% for the fiscal quarter and 59% for the fiscal year to date. Raphael Benaroya, the Company's Chairman, President and Chief Executive Officer, commented: "I am pleased that our strong sales performance is continuing and am particularly gratified that the 4% increase in July 2006 was on top of a 17% increase in July 2005. The Company also set a record for average merchandise margin dollars per store during the six-month Spring selling season ended July 29, 2006. From a qualitative perspective, it is important that transactions per average store increased for the month, for the quarter and for the year to date. Looking ahead, we are well positioned at the beginning of the Fall season with fewer units per average store of Spring /Summer carryover apparel than any comparable time during the last 10 years." He added: "The consistent growth of comparable store sales over the past eight quarters was the result of repositioning our merchandise assortment. Now, we are ready to focus on expansion of our selling square footage by opening new stores and pursuing other growth initiatives in addition to continued sales productivity growth in our existing space." United Retail Group, Inc. is a specialty retailer of large-size women's fashion apparel, footwear and accessories featuring AVENUE(R) brand merchandise. The Company operates 495 AVENUE(R) stores with 2,178,000 square feet of selling space, as well as the AVENUE.COM(R) website at www.avenue.com. The above release contains certain brief forward-looking statements concerning the Company's operations and performance. The Company cautions that any forward-looking statements are summary in nature, involve risks and uncertainties and are subject to change based on various important factors, many of which may be beyond the Company's control. Accordingly, the Company's future performance and financial results may differ materially from those expressed or implied in any such forward-looking statements. The following additional factors, among others, could also affect the Company's actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements included in this release or otherwise made by management: threats of terrorism; war risk; shifts in consumer spending patterns, overall economic conditions; the impact of increased competition; variations in weather patterns; uncertainties relating to execution of the Company's product repositioning strategy; store lease expirations; increases in interest rates; the ability to retain, hire and train key personnel; risks associated with the ability of the Company's manufacturers to deliver products in a timely manner; political instability and other risks associated with foreign sources of production and increases in fuel costs. The reports filed by the Company with the Securities and Exchange Commission contain additional information on these and other factors that could affect the Company's operations and performance. The Company does not intend to update the forward-looking statements contained in the above release, which should not be relied upon as current after today's date.