Alloy Affirms Fiscal Third Quarter and Full Year 2001 Financial Guidance.

Business Editors

NEW YORK--(BUSINESS WIRE)--Sept. 20, 2001

Alloy, Inc. (Nasdaq:ALOY) (www.alloy.com), a leading Generation Y-focused media company and direct marketer, today affirmed its financial guidance for the fiscal 2001 third quarter and full fiscal 2001 year.

Matt Diamond, Chairman and Chief Executive Officer stated, "While we are all shocked and saddened by the events last Tuesday, Alloy's business remains intact and our business outlook continues to be strong. We are confident in Alloy's ability to meet the financial guidance we established in late August. Specifically, we continue to expect fiscal third quarter total revenue in the range of $42 million to $44 million, with net merchandise revenues of $30 million to $32 million, and sponsorship and other revenues of $12 million to $13 million. We also expect fiscal third quarter pro forma income to be in the $2.1 million to $2.2 million range. Our full fiscal year total revenue expectation remains between $157 million and $160 million, with a split of $120 million to $122 million of net merchandise revenues and $37 million to $38 million of sponsorship and other revenues. Our full fiscal year pro forma profitability expectation remains between $1.5 million and $1.7 million."

Mr. Diamond added, "In addition to managing the business through these challenging conditions, we are devoting our corporate resources to assist in the recovery effort. We are working with Save the Children's YouthNOISE, together with corporate partners, to reach the youth market through our multiple media outlets to help teenagers deal with last week's events and their repercussions. Companies interested in participating in this program should send an email to [e-mail]."

About Alloy

Alloy, Inc. is a leading youth-focused media company and direct marketer providing community, content, commerce and entertainment to Generation Y, one of the fastest growing segments of the U.S. population. Alloy's convergent media model uses a wide range of media assets such as direct mail catalogs, Web sites, magazines, college and high school newspapers, and college guides to reach more than 15 million Generation Y members each month. Alloy leverages its broad reach in the Generation Y community by offering a host of marketing and advertising services to marketers seeking to connect with the Generation Y audience, as well as selling apparel, accessories, footwear, room furnishings and action sports equipment directly to the youth market. For further information regarding Alloy, please visit our Web site (www.alloy.com) and click on "Investor Info".

This announcement may contain forward-looking statements that involve risks and uncertainties, including statements regarding our expectations and beliefs regarding our future results or performance. When used in this announcement, the words "anticipate", "believe", "estimate", "expect", "expectation" 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 achieve full year pro forma profitability this fiscal year; to increase revenues, generate high margin sponsorship and multiple revenue streams, increase visitors to our and CCS' Web sites and build customer loyalty; to manage all aspects of our convergent business model; to develop our sales and marketing teams; to capitalize on our sales and marketing efforts; to develop commercial relationships with advertisers and the continued resilience in advertising spending to reach the youth market; to manage the risks and challenges associated with integrating newly acquired businesses; to identify and take advantage of strategic, synergistic acquisitions and other revenue opportunities; competition; seasonal sales fluctuations and general economic conditions. For a discussion of these and other risk factors see the Risk Factors section of our annual report on Form 10-K for the year ended January 31, 2001 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 press release to conform these statements to actual results or to changes in management's expectations, except as required by law.