Blue Holdings Inc. Acquires Taverniti So Jeans, LLC; Over $10 million in Annual Revenue Anticipated in 2006.

COMMERCE, Calif. -- Blue Holdings Inc. (OTCBB:BLHL), a designer, manufacturer and distributor of high-end fashion jeans and denim apparel, today announced that it has entered into an exchange agreement with Taverniti So Jeans, LLC ("Taverniti") and all its members, effective October 31, 2005, to acquire the business and all assets and liabilities of Taverniti in consideration for $750,000 in cash and 500,000 new shares of common stock to be issued by Blue Holdings Inc. Paul Guez, Chairman, Chief Executive Officer and President, and majority shareholder of Blue Holdings Inc., was, and is expected to remain, the sole manager of Taverniti. Taverniti's members, holding 100% of its membership interests, include, Mr. Guez, Elizabeth Guez, the Chief Operating Officer of Blue Holdings Inc., and two other members of Mr. and Ms. Guez' family.

Taverniti is the exclusive licensee for the design, development, manufacture, sales, marketing and distribution of the "Taverniti So Jeans" trademark in the denim and knit sports wear categories for men and women. Taverniti will pay royalties to Taverniti Holdings LLC in the range of 5-8 percent depending on the net sales of the licensed products pursuant to a license agreement with Taverniti Holdings LLC. Taverniti Holdings LLC is jointly owned by Paul Guez (60%) and Jimmy Taverniti (40%), the designer of the products for the brand, and Mr. Guez is the sole manager. The initial license agreement between Taverniti and Taverniti Holdings was signed in May 2004 and expires on December 31, 2015. Blue Holdings Inc. expects that the license agreement would remain in effect through its termination date.

The exchange transaction was approved by a majority of Blue Holdings Inc.'s Board of Directors, including all of its independent directors.

Paul Guez, Chairman and CEO stated, "The acquisition of Taverniti So Jeans represents the addition of a third premiere denim/lifestyle brand into the Blue Holdings family. Jimmy Taverniti's unique style, particularly his garment dying and stone wash techniques, will add a new dimension to our collections. We are excited to be able to collaborate with the very talented Jimmy Taverniti to further exploit the many market opportunities we see ahead. We anticipate that Taverniti will contribute in excess of $10 million in revenue in 2006 and will become an additional powerful brand for us to compete against premium jeans manufacturers."

Mr. Guez continued, "We will continue to develop the four brands we now have, Antik Denim, Yanuk, U, and Taverniti So Jeans. We firmly believe this multi-brand strategy is the right approach to grow Blue Holdings aggressively and profitably. We will continue to look to opportunistically and selectively broaden our distribution as well as to leverage our operational resources for all of the brands."

Blue Holdings Inc. will host a telephone conference regarding its third quarter 2005 earnings on November 1, 2005 at 4:30 p.m. Eastern Standard Time. The call will be open to all interested investors through a live audio Web broadcast via the Internet at www.fulldisclosure.com. For those who are not available to listen to the live broadcast, the call will be archived.

About Blue Holdings Inc.

Blue Holdings Inc., directly and through its wholly owned subsidiary, Antik Denim, LLC, designs, develops, manufactures, markets, distributes and sells high-end fashion jeans, apparel, and accessories with a western flair under the "Antik Denim" , "Yanuk" and "U" brands, both in the United States and internationally. Blue Holdings currently sells men's and women's styles and is in the process of launching a children's line. Antik Denim and Yanuk jeans are made from high-quality fabrics milled in the United States, Japan, Italy and Spain, and are processed with cutting-edge treatments and finishes. Blue Holdings' concepts, designs, embellishments, patent-pending pockets and great attention to detail and quality give it a competitive advantage in the high-end fashion jeans market.

Forward-Looking Statements 

Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. An example of forward-looking statements in this press release includes Blue Holdings' statement relating to its anticipation that Taverniti will contribute in excess of $10 million in revenue in 2006. Forward-looking statements are inherently unreliable and actual results may differ materially. Factors which could cause actual results to differ materially from these forward-looking statements include such factors as may be detailed from time to time in Blue Holdings' filings with the United States Securities and Exchange Commission. Blue Holdings undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.