The Bombay Company, Inc. Announces Proposed Resolution of Auction Process

    - Joint Venture of Gordon Brothers and Hilco, in Partnership with Bowring
    and Benix, Plan for U.S. Operations to be Liquidated and Canadian
    Operations to Continue -

    - Court Approvals Sought in Both U.S. and Canada -

    FORT WORTH, Texas, Oct. 12 /CNW/ -- The Bombay Company, Inc. ("Bombay")
(OTC Bulletin Board:   BBAOE) today announced that a joint venture of Gordon
Brothers Retail Partners, LLC and Hilco Merchant Resources, LLC ("the Joint
Venture") has submitted the winning bid at the auction for Bombay's business
operations, which contemplates a liquidation of Bombay's U.S. stores. In
addition, in a transaction arranged by Hilco Consumer Capital, the Joint
Venture, in partnership with Bowring and Benix & Co., provides for the
continuation of Bombay's Canadian operations after inventory disposition
sales. The Canadian transaction is an agreement in principle subject to
completion and the results of the auction are subject to certain conditions
including court approvals in the United States and Canada.
    (Logo: )
    The agreement between Bombay and the Joint Venture will be submitted to
the U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth
Division, and a hearing to consider approval of the agreement is expected to
be held early next week. In addition, The Bombay Furniture Company of Canada
Inc., a wholly-owned subsidiary of Bombay, will seek acceptance of this
successful bid from the Ontario Superior Court of Justice early next week.
    The Joint Venture intends to begin the store closing sales at Bombay's
U.S. stores next week following court approval.  Other Bombay assets,
including its U.S. intellectual property rights and its real estate assets,
are not part of the proposed transaction.
    "This is a difficult day for Bombay in the United States, but we are glad
that we have found a solution that will help provide most of our U.S.
employees with continued work through the all-important holiday season, while
also preserving the Bombay name and continuing the Company's successful
Canadian operations," said David B. Stewart, Chief Executive Officer of
Bombay.  "Over the coming weeks and months, our U.S.-based employees will work
closely with the Joint Venture to prepare, stock and operate the stores during
the holiday season.  I want to thank all of our hard-working, dedicated
employees who have remained committed to serving our loyal customers,
especially during these most difficult days."
    Fred Benitah, Chief Executive Officer of Bowring and Benix, said,
"Bowring and Benix are excited about this acquisition. Bombay represents one
of the most respected retail brands in Canada, and the acquisition of Bombay
Canada complements our existing Bowring and Benix brands, strengthening our
position as Canada's leading home retailers."
    Margaret Morrison, President of Benix, added, "I am pleased and look
forward to working with Bombay's exceptional group of management and
    On September 20, 2007, Bombay filed voluntary petitions for
reorganization under Chapter 11 of the U.S. Bankruptcy Code for itself and its
U.S. subsidiaries in U.S. Bankruptcy Court for the Northern District of Texas,
Fort Worth Division.  On the same day, The Bombay Furniture Company of Canada
Inc. announced that it had obtained an Order from the Ontario Superior Court
of Justice providing it with protection from its creditors under the
Companies' Creditors Arrangement Act.
    Safe Harbor Statement
    Certain statements made in this news release are forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements are made based upon management's current
expectations and beliefs concerning future developments and their potential
effects upon the Company. These forward-looking statements include statements
regarding the Company's expectations concerning the bankruptcy process and
other risk factors identified in the Company's Annual Report on Form 10-K for
the fiscal year ended February 3, 2007, the Company's Quarterly Report on Form
10-Q for the quarter ended May 5, 2007 and other filings with the Securities
and Exchange Commission.  There can be no assurance that future developments
affecting the Company will be those anticipated by management.  The Company
disclaims any obligation to update or revise any of the forward-looking
statements that are in this news release.
    About Bombay
    The Bombay Company, Inc. designs, sources and markets a unique line of
home accessories, wall decor and furniture through 384 retail outlets and the
Internet in the U.S. and internationally. Further information on The Bombay
Company, Inc. can be found on the Company's website at
    About Gordon Brothers
    Founded in 1903, Gordon Brothers ( is an
advisory, restructuring and investment firm specializing in the retail,
consumer products, real estate and industrial sectors. In addition to
undertaking private equity investments, Gordon Brothers provides asset
valuations and appraisals, dispositions, real estate consulting, lending and
advisory services.
    About Hilco Merchant Resources
    Hilco Merchant Resources provides a wide variety of services including
merger and acquisition facilitation, strategic store closings including
inventory disposition, business strategies, outsourced services including
Interim management, loss prevention, asset protection and store openings. For
more information visit
    About Bowring
    Founded in 1811, Bowring is one of the oldest and most respected names in
Canadian retailing.  Bowring currently has 56 locations across Canada selling
an array of furniture, gifts, fashion tableware and decorative home
    About Benix & Co.
    Benix & Co. is Canada's pre-eminent housewares retailer specializing in
cooking, home entertaining and gift-giving for all occasions.

For further information:

For further information: Michael J. Veitenheimer of The Bombay Company, 
Inc., 1-800-991-4441, Web Site:          

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