TradeStone Exhibits Record Growth in Summer 2006; Award-Winning Global Sourcing Company Adds Several Clients, Expands Market Reach.

GLOUCESTER, Mass. -- TradeStone Software, the leader in delivering domestic and international sourcing, product lifecycle management, and order management through the Unified Buying Process(TM) (UBP), enters the fourth quarter with a strong wind at its back thanks to record growth through the usually quiet summer months. The company added several new customers, grew its global and vertical footprints, added new staff, won prestigious industry awards and launched a service-based version of its flagship solution for the SMB market.

"This has been a crucial period of growth for TradeStone Software. Our vertical and geographic market expansion, coupled with the honor of receiving some of the industry's most prestigious awards makes us all extremely proud," said Sue Welch, CEO, TradeStone Software.

TradeStone Breaks Into New Industries

In the third quarter of 2006, TradeStone achieved a presence in several dynamic new industries. With the addition of Europe's largest footwear distributor, TradeStone decisively entered the footwear industry. J D Williams' line of direct home shopping catalogs represents TradeStone's first foray into the retail catalog industry. With the acquisition of one of North America's largest consumer electronics superstores, TradeStone added the electronics industry to its roster. And TradeStone deepened its reach with department stores, adding another North American retailer to department store giants KarstadtQuelle, Deutsche Woolworth, and Federated Department Stores.

In the coming months, TradeStone will deliver its award-winning UBP to customers in the grocery, auto parts and office supplies industry, addressing the building market demands for TradeStone's unique solution in those sectors.

TradeStone Boasts New Customer Wins

TradeStone's customer base continues to grow exponentially. Last quarter, the world's largest footwear exporter sought out TradeStone to help boost its supply chain collaboration and provide more powerful tracking for complete visibility throughout the supply chain. TradeStone is helping this Asian-based global enterprise ship nearly 50 million pairs of shoes around the world while keeping its suppliers and factories on the same page.

J D Williams, one of Britain's leading direct home shopping retailers, is using the TradeStone Suite to unify the various departments involved in product development and sourcing, as well as to automate administration, ensure best practices, and give its designers more time to create innovative products. The demand for close collaboration and rapid product development with suppliers around the world was a key driver in J D Williams' selection of TradeStone to support those needs and unify its buying process on a global basis.

At a major North American department store, TradeStone is focused on helping increase the number of internationally sourced private label SKUs. In particular, the group is focused on apparel, footwear, and housewares. TradeStone is supporting this expansion effort with its Unified Buying Process, including robust RFQ capabilities, offer comparison, and production event tracking.

In addition, a leading specialty retailer of consumer electronics purchased several TradeStone Suite Software modules, which are designed to work throughout the product lifecycle, from product design, planning, costing and allocation to normalizing information received in vendor offers to auto-calculate landing costs and create planning calendars, right through enabling the retailer to track finished goods. All this will help the electronics giant as it supports smaller, more frequent orders, making it better able to respond to the most current sales data and changing market conditions.

TradeStone Reaches out to SMB's with SaaS

Small and medium businesses can now take full advantage of TradeStone's enterprise-class software thanks to a new service-based version of the TradeStone Suite. The new solution leverages the cost-savings and flexibility of the on-demand delivery model to extend the accessibility and availability of TradeStone's powerful software to retailers of all sizes and their supply chain partners.

The Software as a Service (SaaS) delivery model enables small to mid-sized retailers, product development companies and their global suppliers to access the core benefits of the TradeStone Suite at a lower price point and without the investment in an IT and software infrastructure.

"At TradeStone, our first customers served as our development partners. They have helped drive much of our retail-specific product functionality such as the Virtual Showroom, WIP Reports and the Packing List. It is their dedication to our vision that has made the software so successful," said Ann Diamante, chief product officer. "Now as we ramp up new customers like J D Williams, our implementations are streamlined for success in 90-120 days. By creating software for the real world we ensure that the TradeStone Suite solves real problems, not theoretical issues brain stormed in a closed conference room."

TradeStone Bolsters Product Functionality through Partnerships with Major Global Retailers

TradeStone's ever-evolving partnerships have facilitated the development of several unique product functionalities over the past quarter:

--Deutsche Woolworth, a EUR 1B department store chain, spearheaded the refinement of the Plan/Buy List. The Plan/Buy List provides a comparison between financial plans and execution of pre-buy requested quantities, on-order commitments, and merchandise received for a given period by department/class/sub-class. This reconciliation is critical for understanding product portfolio profitability.

--Federated Department Stores spurred the development of the TradeStone Virtual Showroom to enable regional buyers to shape the flavor of local collections while still maintaining the brand look and feel. The Virtual Showroom is a secure online workspace where the central purchasing group can introduce seasonal collections to local retail buyers and

merchants. These regional buyers select pieces, as well as attributes (cuts, colors, sizes, packaging) from the general collection so they can create local brand extensions of private labeled merchandise.

--Pacific Alliance, a major apparel manufacturer, worked with TradeStone Software to improve supply chain visibility into its factories worldwide with TradeStone's WIP Report (work-in-progress). The TradeStone WIP Report dynamically displays the status of multiple projects, either by product family, by collection, or by vendor. The status reports are triggered by various quality tests or production milestones. This functionality also allows product managers to immediately assess the impact of a failed or passed test throughout an entire collection or product portfolio, and make any adjustments necessary.

--American Eagle Outfitters, a leading youth apparel retailer, looked to TradeStone Software to expand its capabilities to define product, collaborate with vendors and manage purchases across its global supply chain with TradeStone Suite's Packing List/ 3-Way validation. The Packing List includes information on bar codes, RFID tags and containerization specifications and ensures suppliers are in compliance with buyers' documentation requirements.

TradeStone Experiences Surge in Internal Growth

The mounting need for solutions to global sourcing, product lifecycle management, and unified order management concerns can be seen in the growing numbers of TradeStone staff. Over the summer, TradeStone an added a substantial 20 percent to its staff at the company's Gloucester headquarters. New hiring occurred primarily in the professional services and development organizations in an effort to address the rapidly growing demand for TradeStone's unique solution.

"With more and more customers adopting the Unified Buying Process, the need for dedicated technical support is crucial. We're pleased to be able to offer our customers 24/7 support in addition to our team of implementation specialists and developers," said Chief Technology Officer Kamal Anand. "Meeting our customers' needs and ensuring their success is our primary focus."

TradeStone has added two new worldwide offices: an Atlanta location that will focus its efforts on technical support, development and PSO; and a new Hong Kong office that will further TradeStone's penetration in the Far East. In addition, TradeStone's expansion continued in India with a 40 percent up-tick in its Bangalore staff.

TradeStone Wins Industry Awards

TradeStone CEO Sue Welch continues to collect industry accolades for the tremendous impact her vision is having in the global sourcing arena. In June Welch was named a 2006 Provider Pro to Know by Supply & Demand Chain Executive Magazine, the executive's user manual for successful supply and demand chain transformation. Welch earned the honor in large part for her work helping leading retailers such as American Eagle, The Children's Place, Federated Department Stores, Guitar Center and Deutsche Woolworth embrace the unified buying process.

In August, Welch was named to World Trade magazine's prestigious annual "Fabulous 50 Plus One" list. Welch's presence on this list highlights her career-spanning dedication and vision of creating truly collaborative global commerce communities. This year, the "Fabulous 50 Plus One" list also included global leaders such as Toyota, Boeing and Walt Disney Company, distinguished government officials and institutional thought leaders from MIT and Stanford Business School. As CEO of TradeStone, Welch represents the only software company to be recognized on this year's list.

TradeStone Retains Leading Customer Base

In addition to seeing record growth on the new customer front, TradeStone has also experienced growth via new deployments of existing customers. Recently, American Eagle announced the launch of a new line of specialty stores called Martin & Osa, aimed at the post-collegiate crowd, and has expanded its implementation of TradeStone to include this new venture. Having achieved market saturation with 850 stores across the United States, the company decided to spin off a new brand that will offer a classier, more grown-up take on casual wear for 25 to 40 year olds. With TradeStone, American Eagle streamlined and unified its design, sourcing, planning, merchandising and logistics information to ensure collaborators at every stage of the process were operating on the same page. The company recognized that Martin & Osa could achieve an even greater competitive advantage by deploying TradeStone from day one.

The Children's Place was so successful with its deployment of TradeStone that the company elected to deploy TradeStone at The Disney Store, a licensed brand. TradeStone enabled The Children's Place to more effectively collaborate with global suppliers, improve visibility into the pre- and post-shipment supply chain and replace legacy sourcing systems on a fill-in-the-gaps basis. The Children's Place anticipates TradeStone will afford The Disney Store similar benefits.

About TradeStone Software, Inc.

TradeStone Software enables retailers and manufacturers to plan, design, collaborate on and purchase goods from across the world as easily as from across the street. TradeStone's Unified Buying Engine uses Web services technology to layer across an organization's existing infrastructure while its modular software fills in buying process gaps to provide a single view, access and interaction across the entire procurement process. The first and only complete solution for global sourcing, product lifecycle management, and unified order management, TradeStone's intuitive "No Training" technology helps people throughout the supply chain to collaborate globally, enabling users to focus on speeding innovative products to market. Marquee customers include American Eagle Outfitters, The Children's Place, Deutsche Woolworth, Ocean State Job Lot, Pacific Alliance and Federated Department Stores. TradeStone Software is based in Gloucester, Mass. and can be found on the Web at www.TradeStoneSoftware.com.