"The Board of Directors has approved, effective immediately, a $45 million investment to expand the systems, e-care and fulfillment capacity of erizon," stated Rakesh Kaul, President & Chief Executive Officer of Hanover Direct, Inc., "further demonstrating Hanover's commitment to make erizon a leader in end-to-end e-commerce solutions to name brand third party clients."

"During our continuing evaluation of capital options with Bear Stearns," commented Brian C. Harriss, Senior Vice President and Chief Financial Officer, "initial financing for this project will be supported through a new $25 million unsecured credit facility from Richemont Finance S.A., a subsidiary of Richemont, the Swiss luxury goods group, which owns approximately 49% of Hanover Direct."

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. Hanover Brands, Inc. 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, Turiya, Domestications Kitchen & Garden, Kitchen & Home, Encore, Improvements, Silhouettes International Male, Undergear, and Gump's By Mail. Hanover Direct is the exclusive distributor of the Compagnie de la Chine brand in North America; the Company owns Gump's, a retail store based in San Francisco; and the Company has a majority equity stake in Always In Style ®. Each brand can be accessed on the Internet individually by name. erizon, Inc. is comprised of Keystone Internet Services, Inc. (www.keystoneinternet.com), the Company's third party, end-to-end, fulfillment, logistics and e-care provider, and Desius, LLC, the Company's joint venture with RS Software India, Limited, offering 24/7-web shop services and e-commerce systems development. The erizon subsidiary also services the logistical, IT and fulfillment needs of the Hanover Brands subsidiary. Information on Hanover Direct, including each of its subsidiaries, can be accessed on the Internet at www.hanoverdirect.com.

CONTACT:

Hanover Direct, Inc.
Brian C. Harriss
Sr. VP – Chief Financial Officer
Tel: (201) 272-3224

AGG International, Public Relations
Paula Zwerdling / paula@aggintl.com
Tel: (212) 869-8230

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