WEEHAWKEN, NJ, APRIL 12, 1999 -- Hanover Direct, Inc. (AMEX: HNV), an e-commerce and catalog marketer of branded products to consumers as well as a comprehensive range of e-commerce and fulfillment related services to name brand retailers and manufacturers, and RS Software India Limited, a leading provider of quality software services from India to the International markets, today announced the formation of a Joint Venture agreement. Under the terms of this agreement, the two companies will work together toward the development of software, systems and programming for Internet based and electronic commerce applications in the direct marketing, retail and electronic commerce industries. The initial efforts of the Joint Venture will be to support the requirements of Hanover's web services division. This includes enhancing the business functionality and flexibility of the Company's 'plug and play' common system platform as well as providing technical support for its portfolio of web services. The Joint Venture will focus on providing technical expertise and consulting services leading to product development in the future.

"This Joint Venture gives Hanover a superb partner who can help accelerate the timeline for making our world class, common systems platform into the premiere platform for serving e-commerce. The venture also allows us to provide Hanover's portfolio of web initiatives with the scaleable resources we need including creative marketing, web-site creation, maintenance and management. We consider both areas as significant opportunities for growth," stated Rakesh K. Kaul, President and Chief Executive Officer of Hanover Direct, Inc.

"In addition, it provides the bench-strength in servicing the clients of Keystone Fulfillment, the centerpiece of our web services division. It allows us to execute our strategy to become the preferred resource in this space comprehensively providing a 'one-stop shopping' solution for major name brand retailers and manufacturers planning to enter e-commerce," added Kaul.

Raj Jain, Managing Director of RS Software stated, "Hanover's flexible, world class systems and technologies as well as their state-of-the-art training programs will enable RS to become a uniquely qualified, e-commerce resource in India as well as around the globe. This pioneering venture is dedicated to servicing the multi-faceted needs of e-commerce and I can think of no better partner than Hanover Direct in this exciting retail area."

The Joint Venture will actively focus on the Company's state-of-the-art common system platform, a 'plug and play' system, applicable to a wide range of products, performing the high volume, full range of services required by e-commerce companies. It also provides a highly skilled base of intellectual capital involved in web design, maintenance and production. The Joint Venture has already staffed and trained 25 employees. These employees have started focusing on Hanover's systems platform as well as providing programming support for the Hanover portfolio of web initiatives. Mike Contino, Hanover's Senior Vice President and Chief Information Officer will oversee the Joint Venture.

"We're extremely pleased at being able to partner with RS Software. RS Software was selected because of its superior reputation for quality, professionalism and excellence, as well as meeting all requirements to be ISO 9001 qualified for software. With access to their branded methodology for support, and the availability of high-speed data communications between India and the U.S., we are able to provide 24 by 7 system resources. This allows us to scale up our web site design, maintenance and infrastructure 'round-the-clock' while at the same time facilitating Hanover's competence in business functionality to focus on tomorrow's cutting edge technological advances," stated Contino.

"We will initially focus on servicing the needs of Hanover's existing portfolio, quickly transitioning to becoming the outsource arm for the growing roster of Keystone clients. Over time we do believe this joint venture has the means to become a leading product development organization on its own," added Jain.

The Joint Venture comes on the heels of Hanover's realignment announcement earlier this year. The realignment transitions Hanover from one integrated catalog company into two internet-driven divisions, one focused on brand marketing and the other, the web services division, focused on providing the front and back-end services required by direct marketing and e-commerce brands. In 1998, Hanover circulated approximately 242 million catalogs, answered more than 9 million customer service/order calls, and processed and shipped over 7 million packages to customers in North America. Over 80,000 stock keeping units are offered via catalog and e-commerce web sites. The Company has engaged in Internet commerce since 1997.

"We are excited about the future possibilities available to us by partnering with Hanover. The Joint Venture, a new profit center for our Company, offers unique competitive advantages - RS Software's state-of-the-art resources applied to Hanover's comprehensive approach to e-commerce, both offered 'round-the-clock' - a combination currently unavailable in the marketplace," added Sudipta Bhattacharya, Vice President Marketing and Country Manager, RS Software, North America.

RS Software Limited is a leading offshore service provider for Fortune-500 companies across the globe focusing on remote outsourcing, legacy code applications, ERP/EAS services, IBM mainframe technologies and web/e-commerce. It has offices in Calcutta India, London England, Phoenix Arizona and San Mateo California. It is listed on the National stock markets in India. Information of RS Software (India) Limited can be accessed on the Internet at www.rssoftware.com

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 and 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.

Forward Looking Statements
The following may be deemed to be forward looking statements:

Both Companies Committed to Becoming a Leading Provider of Systems & Platform Expertise in E-Commerce

"This Joint Venture gives Hanover a superb partner who can help accelerate the timeline for making our world class, common systems platform into the premiere platform for serving e-commerce. The venture also allows us to provide Hanover's portfolio of web initiatives with the scaleable resources we need including creative marketing, web-site creation, maintenance and management. We consider both areas as significant opportunities for growth,"

This allows us to scale up our web site design, maintenance and infrastructure 'round-the-clock' while at the same time facilitating Hanover's competence in business functionality to focus on tomorrow's cutting edge technological advances,"

"In addition, it provides the bench-strength in servicing the clients of Keystone Fulfillment, the centerpiece of our web services division. It allows us to execute our strategy to become the preferred resource in this space comprehensively providing a 'one-stop shopping' solution for major name brand retailers and manufacturers planning to enter e-commerce."

Cautionary Statements
The following material identifies important factors, which could cause actual results to differ materially from those in the forward looking statements identified above:

A worsening in the political climate between the United States and India or an increase in the tensions existing between those two countries as a result of nuclear weapons testing now being conducted or conducted by India in the future for any other reason.

A general deterioration of economic conditions in the United States leading to increased competitive activity, including a business failure of a substantial size company in the retail industry, a reduction in consumer spending generally, or specifically with reference to the types of merchandise the Company offers in its catalogs. The failure of the Internet generally to achieve the projections made for it with respect to growth of e-commerce or otherwise.

The ability of the Company's computer systems to connect with the systems of others, and to be able to serve the others' fulfillment needs.

The Company has a history of operating losses. Continuation of the operating losses may prevent the Company from making the investments in e-commerce that are required to be made to achieve a position of leadership in serving the e-commerce needs of companies doing business, or desiring to do business, on the Internet. Also acquisitions may be prevented by the continuation of operating losses.

The ability of the Company to attract management with the requisite experience in e-commerce or in Internet businesses and to develop a culture that is consistent with the manner in which e-commerce is managed.

The ability of the Company's brands to continue to maintain the number one position in their niche despite increased competition from others, which, in some cases, have significantly greater resources than the Company.

Only one of the Company's brands is currently vertically integrated. The Company must acquire or invest in the facilities, which would make more of them vertically integrated.

There is no assurance that the Company can make such acquisitions on terms, which would be satisfactory to it.

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

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