Joe's Jeans to Restate Previously Issued Financial Statements

LOS ANGELES, CA, Mar 24 (MARKET WIRE) --
Joe's Jeans Inc. (the "Company") (NASDAQ: JOEZ) announced today that it
will amend and restate certain of its previously issued financial
statements and other financial information to revise the accounting
treatment of its acquisition of JD Holdings, Inc. ("JD Holdings")
completed in October 2007. In light of the pending restatement, the
previously issued financial statements and other financial information
contained in the Company's Forms 10-Q for the quarters ended February 28,
2008, May 31, 2008 and August 31, 2008 should no longer be relied upon.
Additionally, the Company will not file its Form 10-K for the year ended
November 30, 2008 until the restatement has been completed.

For the nine month period ended August 31, 2008, the Company previously
reported earnings per share of $0.09. As a result of its restatement, the
Company expects for the nine month period ended August 31, 2008 restated
earnings per share of $0.06. For the fourth quarter of fiscal 2008, the
Company expects earnings per share of $0.02, at the high end of its
previously announced guidance, before consideration of any non-cash
charges. Finally, for the first quarter of fiscal 2009, the Company
expects earnings per share of $0.01, before consideration of any non-cash
charges, and 5% to 8% growth in its top line.

On February 6, 2007 and June 25, 2007, the Company entered into an amended
Merger Agreement with JD Holdings to acquire its business, which included
all right, title and interest in its intellectual property, which included
the Joe's(R), Joe's Jeans(TM) and "JD" related brand and marks. The merger
was completed on October 25, 2007. The merger was accounted for as a
purchase under U.S. generally accepted accounting principles. Accordingly,
management allocated the purchase price to the assets and liabilities of
JD Holdings in its financial statements as of the completion of the
merger as determined by the Company's valuations. The valuations of
intangible assets, income taxes and certain other items were completed
during the second quarter of fiscal 2008. In addition, under the merger
agreement, Mr. Joseph Dahan, the sole stockholder of JD Holdings, was
entitled, for a period of 120 months following October 25, 2007, a
certain percentage of the gross profit earned by the Company in any
applicable fiscal year. The contingent consideration has been recorded as
additions to goodwill as the amounts have become known.

In connection with its review of the Company's registration statement on
Form S-3 filed on October 15, 2008, the staff of the Securities and
Exchange Commission (the "SEC Staff") commented on the Company's method
for (i) the valuation of the assets acquired in connection with the
merger of JD Holdings and the allocation of the purchase price to those
assets; and (ii) the accounting treatment of the contingent consideration
payment to Mr. Dahan as an adjustment as additional purchase price rather
than as compensation expense. The Company presented to the SEC Staff its
position regarding the transaction and its current accounting treatment.
Ultimately, after considering the SEC Staff's view, management of the
Company recommended to the Audit Committee of the Company (the "Audit
Committee") that the Company should (i) perform a new valuation pursuant
to Statement of Financial Accounting Standards No. 141 of the assets
acquired in connection with the merger with JD Holdings and allocate the
purchase price according to such valuation; and (ii) account for the
contingent consideration payments as compensation expense, rather than as
an addition to goodwill. The Audit Committee discussed and agreed with
this recommendation. On March 18, 2009, the Audit Committee concluded
that, upon the advice of management, in consultation with Ernst & Young
LLP ("Ernst & Young"), that its previously issued financial statements
for each of the three quarters ended February 28, 2008, May 31, 2008 and
August 31, 2008, respectively, will require restatement. The Audit
Committee of our Board of Directors has discussed the matters disclosed
in this press release with Ernst & Young.

Accordingly, the Company expects to amend and restate its financial
statements and other financial information for the quarterly periods in
2008 in its Annual Report on Form 10-K for the year ended November 30,
2008 ("Annual Report") in lieu of amending the aforementioned Forms 10-Q
to reflect the change in accounting. The Company is currently working to
complete the restatement of its financial statements and other financial
information and preparing the appropriate filings with the Securities and
Exchange Commission ("SEC"). As a result of this delay, the Company is no
longer compliant with its periodic reporting requirements with the SEC.
However, the Company is using its best efforts to prepare and make the
filing as soon as possible.

While the information herein describes all of the items for which the
Company and Ernst & Young have determined a restatement is appropriate at
this time, there can be no assurance that further review of the Company's
financial statements will not identify additional items. In light of the
pending restatement, the Company's quarterly income statements for fiscal
2008 are expected to be restated as follows:

2008 Quarter ended
-------------------------------------
(in thousands, except per share data)

As As Expected
Reported to be Restated
Feb 28 Adjustment Feb 28
-------- ----------- --------------

Net Sales $ 15,210 $ - $ 15,210
Cost Of Goods Sold 8,422 - 8,422

-------- ----------- --------------
Gross Profit 6,788 - 6,788
-------- ----------- --------------

Operating Expenses
Selling, General and
Administrative 5,604 522 6,126
Depreciation and Amortization 87 - 87

-------- ----------- --------------
Total Operating Expenses 5,691 522 6,213

-------- ----------- --------------
Income from Operations 1,097 (522) 575
-------- ----------- --------------

Interest Expense (192) - (192)
Income Taxes (62) - (62)

-------- ----------- --------------
Net Income $ 843 (522) $ 321
======== =========== ==============
EPS - Basic $ 0.01 $ 0.01
EPS - Diluted $ 0.01 $ 0.01

As As Expected
Reported to be Restated
May 31 Adjustment May 31
-------- ----------- --------------

Net Sales $ 17,955 $ - $ 17,955
Cost Of Goods Sold 9,517 - 9,517

-------- ----------- --------------
Gross Profit 8,438 - 8,438
-------- ----------- --------------

Operating Expenses
Selling, General and
Administrative 5,968 404 6,372
Depreciation and Amortization 87 - 87

-------- ----------- --------------
Total Operating Expenses 6,055 404 6,459

-------- ----------- --------------
Income from Operations 2,383 (404) 1,979
-------- ----------- --------------

Interest Expense (167) - (167)
Income Taxes (201) - (201)

-------- ----------- --------------
Net Income $ 2,015 (404) $ 1,611
======== =========== ==============
EPS - Basic $ 0.03 $ 0.03
EPS - Diluted $ 0.03 $ 0.03

As As Expected
Reported to be Restated
Aug 31 Adjustment Aug 31
-------- ----------- --------------

Net Sales $ 18,248 $ - $ 18,248
Cost Of Goods Sold 9,303 - 9,303

-------- ----------- --------------
Gross Profit 8,945 - 8,945
-------- ----------- --------------

Operating Expenses
Selling, General and
Administrative 6,134 410 6,544
Depreciation and Amortization 70 - 70

-------- ----------- --------------
Total Operating Expenses 6,204 410 6,614

-------- ----------- --------------
Income from Operations 2,741 (410) 2,331
-------- ----------- --------------

Interest Expense (133) - (133)
Income Taxes (368) - (368)

-------- ----------- --------------
Net Income $ 2,240 (410) $ 1,830
======== =========== ==============
EPS - Basic $ 0.04 $ 0.03
EPS - Diluted $ 0.04 $ 0.03

In connection with its delayed Annual Report, on March 19, 2009, the
Company received a Nasdaq Staff Determination letter stating that the
Company is not in compliance with its filing requirements for continued
listing as set forth in Nasdaq Marketplace Rule 4310(c)(14) due to the
Company's failure to timely file its Annual Report. The Company has until
May 18, 2009 to provide Nasdaq with a plan to regain compliance and if
accepted, until September 14, 2009 to regain compliance. The Company
expects to be able to regain compliance in the allotted time frame for
continued listing on Nasdaq, but there can be no assurance that it can do
so or any additional time periods for compliance will be granted by
Nasdaq.

About Joe's Jeans Inc.

Joe's Jeans Inc. designs, produces and sells apparel and apparel-related
products to the retail and premium markets under the Joe's(R) brand and
related trademarks. More information is available at the company website
at www.joesjeans.com.

This release contains forward-looking statements within the meaning of the
safe harbor provisions of the Private Securities Litigation Reform Act of
1995, as amended. Statements in this press release that relate to future
results and events (including statements about expected materiality or
significance and the quantitative effects of the restatement) are
forward-looking statements based on the Company's current expectations.
Actual results, as well as the Company's expectations regarding
materiality or significance, the restatement's quantitative effects, the
effectiveness of disclosure controls and procedures, and deficiencies in
internal control over financial reporting, may differ materially from
those in the forward-looking statements because of a number of risks and
uncertainties, including: the risk that additional information may arise
during the completion of the work on the restatement, our independent
auditor's review of the restatement and its audit work, or the Audit
Committee's final review of the restated financial statements, or as a
result of other subsequent events; our ability to successfully remediate
any internal control deficiencies; our ability to meet NASDAQ
requirements for continued listing as a result of our past due periodic
report filings; evaluation of the need for any non-cash charges; the risk
that the Company will be unsuccessful in gauging fashion trends and
changing customer preferences; the risk that changes in general economic
conditions, consumer confidence, or consumer spending patterns will have
a negative impact on the Company's financial performance or strategies;
the highly competitive nature of the Company's business in the United
States and internationally and its dependence on consumer spending
patterns, which are influenced by numerous other factors; the Company's
ability to respond to the business environment and fashion trends;
continued acceptance of the Joe's(R) brand in the marketplace; successful
implementation of any growth or strategic plans; effective inventory
management; the Company's ability to continue to have access on favorable
terms to sufficient sources of liquidity necessary to fund ongoing cash
requirements of its operations, which access may be adversely impacted by
a number of factors, including the reduced availability of credit
generally and the substantial tightening of the credit markets, including
lending by financial institutions, who are sources of credit for the
Company, the recent increase in the cost of capital, the level of the
Company's cash flows, which will be impacted by the level of consumer
spending and retailer and consumer acceptance of its products; the
ability to generate positive cash flow from operations; competitive
factors, including the possibility of major customers sourcing product
overseas in competition with our products; the risk that acts or
omissions by the company's third party vendors could have a negative
impact on the company's reputation; a possible oversupply of denim in the
marketplace; and other risks. The Company discusses certain of these
factors more fully in its additional filings with the SEC, including its
last annual report on Form 10-K filed with the SEC, and this release
should be read in conjunction with that annual report on Form 10-K,
together with all of the Company's other filings, including current
reports on Form 8-K, made with the SEC through the date of this release.
The Company urges you to consider all of these risks, uncertainties and
other factors carefully in evaluating the forward-looking statements
contained in this release.

Any forward-looking statement is based on information current as of the
date of this document and speaks only as of the date on which such
statement is made, and the Company undertakes no obligation to update
these statements to reflect events or circumstances after the date on
which such statement is made. Readers are cautioned not to place undue
reliance on forward-looking statements.

Contact:
Joe's Jeans Inc.
Hamish Sandhu
323-837-3700 x 304

Copyright 2009, Market Wire, All rights reserved.

-0-