WEEHAWKEN, NJ, February 25, 1999 - Hanover Direct, Inc. (AMEX: HNV) announced today that it has entered into a joint marketing partnership with ArtSelect establishing a co-branded network of pages integrating the ArtSelect product line and custom framed art concept into select Hanover Direct catalogs and on-line sites as well as within the ArtSelect on-line site. ArtSelect has granted on-line, direct mail and retail channel exclusivity to Hanover in the domestic market niches presently occupied by the Domestications, The Company Store and Kitchen & Home catalogs. In addition, in the event that ArtSelect shall decide to bring offline order fulfillment in-house or to outsource call center processing, Keystone Fulfillment, Inc., an affiliate of Hanover, will be considered for such services.

"The ArtSelect alliance reinforces Hanover's leadership position in direct marketing of home fashions. Wall decor solutions can now be matched with textile offers giving our customers customization and value in an easy to use format," said Hanover Direct, Inc. President and Chief Executive Officer Rakesh K. Kaul.

ArtSelect, an on-line art print and custom frame shop at www.artselect.com, offers custom framed prints at 40 to 50 percent less than retail store prices. ArtSelect offers customers the opportunity to shop for prints and choose custom mats and frames without stepping inside a store or talking to a salesperson. The company has developed its own technology to make selections appear quickly on the viewer's computer screen in beautiful color and detail.

Earlier this year Hanover conducted a test in the Domestications catalog giving customers the opportunity to link on-line to the co-branded ArtSelect pages at www.domestications.artselect.com and customize art prints to coordinate with bedding ensembles offered by the Domestications catalog.

"The test validated Hanover's ability to drive customers to a web site through advertising in its 240+ million mailed catalogs further enhancing our strategy of migrating catalog customers to the internet," said Howard Lee, Vice President Internet Commerce.

Hanover Direct, Inc. (AMEX: HNV) is a leading, specialty direct marketer with a diverse branded portfolio of home fashions, general merchandise, women's and men's apparel and gift catalogs and proprietary products delivered via direct mail and electronic commerce platforms. Its portfolio of brands includes: Domestications and Colonial Garden Kitchens (Home Fashions - Mid Market brands); The Company Store and Kitchen & Home (Home Fashions - Upscale brands); Improvements and The Safety Zone (General Merchandise brands); Silhouettes and Tweeds (Women's Apparel brands); International Male, Austad's and Undergear (Men's Apparel brands); and Gump's By Mail (Gift brands). The company owns Gump's, a retail store based in San Francisco, and recently launched Keystone Fulfillment Inc., offering third party fulfillment and proprietary electronic commerce services. Information on all of Hanover Direct's retail titles can be accessed on the Internet individually by name.

The following are important factors that could cause actual results to differ materially from those contained in the forward-looking statements: Demand expectations for the growth of third party fulfillment, particularly to support e-commerce activity on the internet, is below expectations and does not expand as rapidly as anticipated; Consolidators of freight and postage do not obtain an advantage as meaningful as currently provided by applicable rules and regulation, thereby resulting in a decrease in margin; The economy ceases to grow or slows down materially resulting in less consumer demand for catalog or internet merchandise; Catalog shoppers are not converted to internet shoppers in a volume which is satisfactory.

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

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