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Exceed Company Ltd. Follow-up Letter To Shareholders

FUJIAN, China, Aug. 17, 2011 /PRNewswire-Asia-FirstCall/ -- Exceed Company Ltd. (NASDAQ: EDS) ("Exceed" or "the Company"), one of the leading domestic sportswear brands in China, announces that its Chairman and Chief Executive Officer, Mr. Shuipan Lin, has issued a follow-up letter to shareholders in response to investor inquiries regarding the Company's financial and operational disclosure.  The full text of the letter is provided below and can also be accessed on the company's website at www.exceedsports.cn .  

Chairman ' s Letter

August 17, 2011

Dear Shareholders,

As a follow-up to our investor letter on August 4, 2011, we are writing in response to additional shareholder inquiries that we have received regarding our operations, specifically our relationship with our distributors and the Xidelong retail store network.  

We hope the following information provides our investors with greater insight into our operational structure and addresses the concerns some of you may have.

Our Business Model and the Xidelong Retail Store Network

Exceed Company Ltd. is a brand owner and wholesaler.  The company itself does not own or operate the Xidelong-brand retail stores directly.  Instead, they are operated by our distributors and authorized third-party retail store operators.  The store count data that we disclose in our filings is provided to the Company by its distributors, which the Company analyzes in order to implement its operational planning. While there may be some variance in store count based on the timing of when the Company receives updated information from its distributors, we believe the overall disclosed number of Xidelong retail stores in our reports filed with the SEC to be accurate.  

Furthermore, as part of its Advertising and Promotional expenses, the company includes both costs associated with advertising and promotional activities as well as store renovation subsidies which are paid to its distributors and third party retail store operators to help maintain a consistent brand image.  The store subsidies include subsidies for the outfitting of new stores, subsidies for the renovation of old stores, and subsidies for props and models for use in new or renovated stores.  

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