WOBURN, MA and WEEHAWKEN, NJ, October 26, 1999 - FairMarket Inc. and Hanover Direct, Inc. (AMEX: HNV) today announced that Keystone Internet Services, Inc., a subsidiary of Hanover Direct, Inc. was selected as the primary order fulfillment services vendor for special online auctions on the FairMarket Network. With this agreement, FairMarket is able to offer its participating merchants Keystone's comprehensive range of end-to-end solutions, making it easier for companies without a comprehensive e-commerce offering to fulfill orders from the sale of merchandise via online auction.

The FairMarket Network is a collection of FairMarket-powered, private-label merchant and community auction sites connected through a shared, massive database of goods and services. For example, a customer looking for a Dell computer in an auction on MSN.com, Excite or Lycos will automatically see merchandise available from the www.DellAuction.com site, as well as person-to-person auction listings from other FairMarket sites. This network provides both a compelling marketplace for vendors selling new and refurbished high-quality merchandise to a large online audience as well as a dynamic trading place for person-to-person auctions.

Analyst projections indicate that the online auction market will grow to $52.6 billion by 2002, making it one of the fastest growing segments of e-commerce. To manage that growth and ensure successful transaction completion, FairMarket and Keystone will work together to provide auction sites with a comprehensive order processing and fulfillment system.

Keystone provides a full range of e-commerce marketing solutions services; its infrastructure works off a multi-channel, multi-brand common systems platform with the versatility and flexibility to handle a wide range of product categories in a 24/7 service mode. On the 'front-end' Keystone can provide the logistical services required by e-commerce companies such as telemarketing, order processing, credit card transaction processing, customer database management and systems programming and interface support. Its comprehensive 'back-end' services include fulfillment, order management, inventory management, and facility management.

"Keystone Internet Services continues to expand as a mission critical affiliate partner for all facets of e-commerce," stated Rakesh K. Kaul, President and CEO of Hanover Direct, Inc.

"At FairMarket we are committed to making it as turnkey as possible for our customers to conduct successful online auctions on their own sites, or in special promotion with any of the FairMarket Network member sites," said Susan Zaney, vice president of marketing at FairMarket. "We look forward to working with Keystone, an expert in the fulfillment industry, to offer extremely valuable distribution capabilities to our growing client roster."

"As online auctions continue to grow in popularity, it is more critical than ever for sellers to quickly fulfill orders and deliver the best customer service experience possible," said Richard M. Metzler, President of Keystone Internet Services, Inc. "Working in conjunction with FairMarket, we are confident that we will be able to provide their customers with the most efficient distribution ensuring that all transactions are completed successfully."

Keystone, launched last year, provides its services to a growing roster of brand name manufacturers and retailers. This roster currently includes companies such as, The National Geographic Society, Fogdog Sports, a leading online retailer of sporting goods, United Retail Group, www.mercata.com, recently launched by Mercata, Inc., a privately held company with funding from Vulcan Ventures, Inc., KBkids.com, a new internet joint venture between BrainPlay.com and Consolidated Stores Corporation, and The Dress Barn, Inc., a national chain of women's fashion specialty retail stores now entering new direct marketing channels of distribution. Keystone is also the third party fulfillment services vendor Excite exclusively promotes to others wanting to participate in its shopping channel.

Hanover Direct, Inc. (AMEX: HNV), and its business units, provide quality, branded merchandise through a portfolio of catalogs and e-commerce platforms to consumers, as well as a comprehensive range of Internet, e-commerce, and fulfillment services to businesses. The Brand Marketing division is comprised of the Company's catalog and e-commerce web site portfolio of home fashions, apparel and gift brands, including Domestications, The Company Store, Colonial Garden Kitchens, Kitchen & Home, Improvements, The Safety Zone, Silhouettes, Tweeds, International Male, Austad's, Undergear, and Gump's By Mail. The Company also owns Gump's, a retail store based in San Francisco. Each brand can be accessed on the Internet individually by name. The Web Services division is comprised of the Company's Internet marketing services group, systems platform, fulfillment and telemarketing and third party fulfillment service vendor, Keystone Fulfillment Inc. (www.keystonefulfillment.com). Information on Hanover Direct, including each of its divisions, can be accessed on the Internet at www.hanoverdirect.com.

About FairMarket
FairMarket Inc., founded in 1997 and based in Woburn, Mass., provides online, hosted auctions for e-commerce leaders. The FairMarket Network is the world's largest online auction network comprising the leading portals and vendors on the Web, with a total reach of more than 46 million visitors. FairMarket AuctionPlace is a fully outsourced, private-label, customized solution that helps companies expand their distribution and create a new e-commerce profit center. FairMarket can be reached at (800) 531-7871 or via the Web at www.fairmarket.com.

CONTACT:
AGG International, Public Relations
Paula Zwerdling
Managing Director
(212) 869-8230

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