Boston, Massachusetts, July 1, 2004 - SmartBargains, Inc. announced today that it has filed a registration statement with the U.S. Securities and Exchange Commission relating to a proposed initial public offering of shares of its common stock. The shares in the offering will be offered by SmartBargains and selling stockholders.

Merrill Lynch & Co. will serve as sole book-running manager for the offering, with SG Cowen & Co., LLC acting as co-lead manager and Pacific Crest Securities Inc. acting as co-manager. The timing, size and initial price of the offering have not been determined. A preliminary prospectus for the offering, when available, may be obtained from the offices of Merrill Lynch & Co., Four World Financial Center, 250 Vesey Street, New York, NY 10080, or by telephone at (212) 449-1000.

SmartBargains is an online retailer of high quality, excess merchandise offered at an average of 50% off everyday retail prices. The company sells thousands of brand name and high quality products across 13 departments, ranging from home goods to apparel to electronics, on its website.

A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor may there be any sale of these securities in any state in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.