Sterling Provides Default Status Update

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 11, 2012) - Sterling Shoes Inc. (the "Company") provides its bi-weekly Default Status Report under National Policy 12-203 - Cease Trade Orders for Continuous Disclosure Defaults ("NP 12-203"). The Company announces that the interim financial statements for the quarter ended March 31, 2012, management discussion and analysis and related CEO and CFO certifications (collectively, the "Interim Filings") have not been filed by the filing deadline. In addition, on May 2, 2012, the Company announced that the annual financial statements for the financial year ended December 31, 2011, management discussion and analysis and related CEO and CFO certifications (collectively, the "Year End Filings" and together with the Interim Filings, the "Required Filings") were not filed by the filing deadline. The British Columbia Securities Commission placed the Company on its list of defaulting issuers on May 4, 2012.

As noted in the Company's press released dated May 22, 2012, the Company's wholly-owned subsidiary, Sterling Shoes GP Inc. ("Sterling GP"), the general partner of Sterling Shoes Limited Partnership ("Sterling LP"), and Sterling LP successfully completed the sale of the majority of the assets of Sterling LP including 69 of the Company's retail locations operating under the Sterling Shoes, Shoe Warehouse and Freedman banners to Town Shoes Limited ("Town") for a purchase price of approximately $17.5 million, subject to certain post-closing adjustments (the "Transaction"). The Transaction was completed pursuant to a purchase agreement dated as of April 16, 2012 among Sterling GP, Sterling LP, Town and Alvarez Marsal Canada Inc., in its capacity as the court appointed monitor pursuant to the Company's proceedings under the Companies' Creditors Arrangement Act (the "CCAA").

Other than noted above, since its last default announcement on May 28, 2012, there have not been any material changes to the information contained therein; nor any failure by the Company to fulfill its intentions as stated therein with respect to satisfying the provisions of the alternative information guidelines, and there are no additional defaults or anticipated defaults subsequent to such announcement. Further, there have been no additional material changes respecting the Company and its affairs.

Until the Required Filings are filed, the Company intends to continue to satisfy the provisions of the alternative information guidelines specified in Section 4.4 of NP 12-203 by issuing bi-weekly Default Status Reports, each of which will be issued in the form of a news release. The Company intends to file, if required, its next Default Status Report by June 25, 2012.

Additional information about Sterling Shoes Inc. can be found in the disclosure documents filed by Sterling Shoes Inc. with the securities regulatory authorities, available at www.sedar.com.