FACTORY 2-U STORES, INC. Announces March Sales.

Business Editors

SAN DIEGO--(BUSINESS WIRE)--April 9, 2003

FACTORY 2-U STORES, INC. (Nasdaq:FTUS) today announced that sales for the five-week period ended April 5, 2003 were $40.3 million, a decrease of 16.8% over sales of $48.5 million for the five-week period ended April 6, 2002. Comparable store sales for the five-week period ended April 5, 2003 decreased 15.3% versus a decrease of 7.9% for the same period last year. For the five-week period ended April 5, 2003, the Company opened 1 new store in Arizona and closed 2 stores.

Sales for the nine-weeks ended April 5, 2003 totaled $69.1 million compared to $82.4 million for the same period last year, a decrease of 16.2%. Comparable store sales for the nine-weeks ended April 5, 2003 decreased 12.3% versus a decrease of 8.8% for the same period last year. For the nine-weeks ended April 5, 2003, the Company opened 1 new store and closed 2 stores.

Bill Fields, Chairman and Chief Executive Officer, commented, "Comparable store sales were significantly lower as a result of pre-Easter sales occurring in March last year versus April this year. To a lesser extent, lower inventory levels in-store contributed to the negative comparable store sales performance. For March, our transaction counts and purchase size were down primarily due to the Easter shift and lower in-store inventory levels. All merchandise categories had negative comparable store sales, ranging in the negative low to high teens. Geographically, Dallas, TX performed the best with comparable store sales in the positive low twenties. San Antonio and Houston, TX and San Diego, CA also performed well with comparable store sales in the negative low single-digit range. The Pacific Northwest, Tucson, AZ, New Mexico and northern California performed the worst with comparable store sales in the negative low twenties."

Mr. Fields concluded, "We began March with in-store inventory levels down approximately 30% compared to last year. During the month of March we experienced a gradual improvement in in-store inventory levels, ending the month of March down 19%. We continue to build our in-store inventories and are experiencing an increased flow of merchandise as a result of improved liquidity and vendor support. With new inventory moving in and the completion of liquidating slow moving and aged inventory, we expect to be in a better inventory position for Easter."

We will provide a mid-month sales update for April on April 21, 2003 at 5:00 P.M. Eastern Standard Time. Those interested can access this update message at 1-888-201-9603. This message will remain available until May 19, 2003. We will release our April sales results on May 7, 2003 after the market closes, or approximately 4:00 P.M. Eastern Standard Time.

We expect to release our first quarter operating results on May 14, 2003 after the market closes, or approximately 4:00 P.M. Eastern Standard Time. We will host a real-time web cast presentation and live conference call to discuss our first quarter operating results and second quarter sales and operating results expectations, the same day at 5:00 P.M. Eastern Standard Time. To participate in the call, dial 1-800-843-7949 five minutes before the call or access the Internet at www.factory2-u.com. All shareholders and other interested parties are encouraged to participate. A replay of the call will remain available for 48 hours by telephone or on the Internet through May 28, 2003. You may also obtain a transcript of the call by contacting Kehoe, White & Co., Inc. at 1-562-437-0655.

FACTORY 2-U STORES, INC. operates 243 "Factory 2-U" off-price retail stores which sell branded casual apparel for the family, as well as selected domestics and household merchandise at prices which generally are significantly lower than the prices offered by its discount competitors. The Company operates 32 stores in Arizona, 2 stores in Arkansas, 64 stores in southern California, 63 stores in northern California, 1 store in Idaho, 8 stores in Nevada, 9 stores in New Mexico, 1 store in Oklahoma, 15 stores in Oregon, 34 stores in Texas, and 14 stores in Washington.

Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve risks and uncertainties, and actual results could differ materially from the Company's present expectations. Among the important factors that could cause actual results to differ materially from those indicated in the forward-looking statements are: customer demand and trends in the off-price apparel industry, the effect of economic conditions, the impact of competitive openings and pricing, supply constraints or difficulties, and other risks detailed in the Company's Securities and Exchange Commission filings.