SOURCE: Charles & Colvard, Ltd.

Charles & Colvard, Ltd.

October 11, 2011 08:28 ET

Charles & Colvard Announces Launch of Lulu Avenue™ Direct-to-Consumer Home Trunk Show Business

MORRISVILLE, NC--(Marketwire - Oct 11, 2011) - Charles & Colvard, Ltd. (NASDAQ: CTHR), the sole manufacturer of created moissanite gemstones, The Most Brilliant Jewel in the World®, today announced the launch of Lulu Avenue, a new venture focused on selling moissanite jewelry directly to the consumer through the in-home direct sales business model. Lulu Avenue will be operated through Charles & Colvard Direct, LLC, a wholly-owned subsidiary of Charles & Colvard, Ltd. In addition, Kevin Raulston, an industry veteran with more than 17 years' experience in the direct-selling space, has joined the Company to lead this effort as General Manager of Charles & Colvard Direct.

Mr. Raulston most recently was consulting with businesses on direct selling nationally while leading two companies in the greater Phoenix area. He is relocating to North Carolina to devote himself fully to Charles & Colvard Direct. Mr. Raulston's unique experience leading both home trunk show and other direct-to-consumer business models over the past two decades in the U.S. and abroad provide the broad scope of skills needed to bring moissanite directly to the consumer through Charles & Colvard Direct.

"We are extremely enthusiastic about the launch of our new direct-to-consumer home trunk show business and the addition of Kevin Raulston, a seasoned and highly respected direct-selling executive, to head this new venture," stated Randy N. McCullough, Chief Executive Officer of Charles & Colvard, Ltd. "Direct selling is a proven method of taking unique, innovative products to the market through highly motivated field sales leaders. The sales and consumer response throughout our test phase over the past several months, where the majority of participants had never been exposed to moissanite, have greatly exceeded our projections and goals. As a result, we are developing the support today to move this initiative forward as quickly as possible to capitalize on demand in a marketplace that we feel is far from saturated."

After carefully evaluating test data collected from in-home trunk shows conducted in multiple cities across the U.S., McCullough strongly recommended to the Board of Directors of Charles & Colvard, Ltd. that they endorse the full nationwide launch of the new business, which the Board unanimously approved.

George R. Cattermole, Chairman of the Board of Charles & Colvard, Ltd., commented, "This new business model is an important step forward for our Company. Our experience indicates that many consumers are enamored of the beauty and appreciate the value of moissanite when there is an opportunity to educate them about its unique features. We believe that home parties present an ideal opportunity for such interaction with potential customers, and based upon our test data, it appears that consumers and prospective sales representatives alike are excited about the delivery of our unique jewelry at attractive prices in convenient, comfortable venues. We believe the direct selling initiative will not only add incremental sales but also increase consumer awareness of moissanite, which may benefit sell-through in our e-commerce and wholesale distribution sales channels."

"Our sales representatives will be our best marketers of moissanite," Mr. Raulston expressed. "Lulu Avenue provides a unique entrepreneurial opportunity for women who desire to become independent sellers and differentiate themselves with a gorgeous, exclusive moissanite jewelry line."

The new subsidiary will expand its test marketing in key U.S. cities through the remainder of 2011 and is targeted to open nationwide in January 2012. Prospective independent sales representatives interested in this unique direct selling opportunity may email Charles & Colvard Direct at direct@charlesandcolvard.com for further information.

About Charles & Colvard, Ltd.

Charles & Colvard, Ltd., based in the Research Triangle Park area of North Carolina, is the global sole source of moissanite, a unique, near-colorless created gemstone that is distinct from other gemstones and jewels based on its exceptional fire, brilliance, luster, durability, and rarity. Charles & Colvard Created Moissanite® is currently incorporated into fine jewelry sold through domestic and international retailers and other sales channels. Charles & Colvard, Ltd. is headquartered in Morrisville, North Carolina, and its common stock is listed on the NASDAQ Global Select Market under the symbol "CTHR". For more information, please access www.moissanite.com or www.charlesandcolvard.com.

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements expressing expectations regarding our future and projections relating to products, sales, revenues, and earnings are typical of such statements and are made under the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, objectives, representations, and contentions and are not historical facts and typically are identified by use of terms such as "may," "will," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict," "continue," and similar words, although some forward-looking statements are expressed differently.

All forward-looking statements are subject to the risks and uncertainties inherent in predicting the future. You should be aware that although the forward-looking statements included herein represent management's current judgment and expectations, our actual results may differ materially from those projected, stated, or implied in these forward-looking statements as a result of many factors including, but not limited to, our dependence on consumer acceptance and growth of sales of our products; our dependence on third parties for the sales and marketing of our products to end consumers; dependence on a limited number of customers; our current customers' potential perception of us as a competitor as we enter the finished jewelry business; general economic and market conditions, including the current economic environment; dependence on Cree, Inc. as the current supplier of the raw material; intense competition in the worldwide jewelry industry; the financial condition of our major customers; risks of conducting business in foreign countries; the pricing of precious metals, which is beyond our control; our ability to protect our intellectual property; and possible adverse effects of governmental regulation and oversight, in addition to the other risks and uncertainties described in our filings with the Securities and Exchange Commission, or the SEC, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2010 and subsequent reports filed with the SEC. Forward-looking statements speak only as of the date they are made. We undertake no obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur except as required by the federal securities laws, and you are urged to review and consider disclosures that we make in the reports that we file with the SEC that discuss other factors relevant to our business.

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