Summary of SPORT CHALET INC

Entry into a Material Definitive Agreement, Creation of a Direct Financial Oblig

Item 1.01. Entry Into a Material Definitive Agreement.

On January 9, 2009, Sport Chalet, Inc. (the "Company") and its wholly-owned subsidiary, Sport Chalet Value Services, LLC ("SCVS"), entered into a First Amendment to Amended and Restated Loan and Security Agreement and Limited Forbearance Agreement (the "Amendment") dated as of December 28, 2008, with Bank of America, N.A. (the "Bank") as agent for the lenders under the Loan Agreement (as defined below).

Under the Amendment, (i), the Bank has agreed to forbear from exercising its rights in respect of the Event of Default described below under the Amended and Restated Loan and Security Agreement, as amended, dated as of June 20, 2008, among the Company, SCVS and the Bank (the "Loan Agreement"), (ii) the Company may not select a LIBOR-based interest rate under the Loan Agreement, and (iii) the Bank has agreed to permit an overadvance in the amount of $1.5 million until January 13, 2009. As of December 31, 2008, an event of default had occurred under the Loan Agreement due to the failure of the Company to maintain a "Fixed Charge Coverage Ratio" (as defined in the Loan Agreement) of not less than 1.00 to 1.00 (the "Event of Default"). On December 28, 2008, availability under the Loan Agreement was less than $10.5 million, thereby requiring the testing of the Fixed Charge Coverage Ratio. The forbearance period will end on the earlier to occur of any further default under the Loan Agreement or January 31, 2009. The Company and SCVS acknowledged, among other things, that they had no defenses, claims or set-offs to the obligations under the Loan Agreement and provided the Bank a general release of claims.

Concurrently with entering into the Amendment, the Company and SCVS entered into a letter agreement with the Bank under which the Company has agreed to engage, for a minimum of 90 days, a consultant acceptable to the Bank to prepare cash flow and operating budgets to be presented periodically to the Board of Directors of the Company and to the Bank. On January 9, 2009, the Company retained FTI Consulting.

The foregoing summary is qualified in its entirety by reference to the copies of the Amendment and the letter agreement which are attached as Exhibits 99.1 and 99.2 to this Report and are incorporated herein by this reference.

Item 9.01. Financial Statements and Exhibits.

(d)      Exhibits.

    Exhibit
     Number      Description

      99.1       First Amendment to Amended and Restated Loan and Security
                 Agreement and Limited Forbearance Agreement dated as of December
                 28, 2008, among Sport Chalet, Inc., Sport Chalet Value Services,
                 LLC and Bank of America, N.A.

      99.2       Letter agreement dated as of December 28, 2008, among Sport
                 Chalet, Inc., Sport Chalet Value Services, LLC and Bank of
                 America, N.A.