Hanover Direct, Inc. (AMEX: HNV) announced today that a subsidiary of its business-to-business, third party Internet subsidiary, erizon, Inc., will open a new e-fulfillment and distribution facility for its Keystone Internet Services unit in Maumelle, Arkansas later this month. The facility adds 700,000 square feet of capacity bringing total Company warehouse fulfillment capacity to close to 2 million square feet. The Maumelle facility will be used by third-party clients of Keystone Internet Services, an industry leader in providing back-end e-commerce services to a widening and well-known roster of Internet players.

"The opening of the Maumelle facility demonstrates Hanover’s commitment to be a leader in third-party Internet services," stated Rakesh K. Kaul, President and Chief Executive Officer of Hanover Direct, Inc. "Strategically located, Maumelle fits perfectly into our national distribution rollout plan to locate product closer to our end consumers. The new facility will provide additional capacity to allow us to capture our share of this market and add new customers in the year ahead."

"We welcome the opportunity to bring technological industry to the area and are pleased that Keystone chose Maumelle to provide the needed workforce for these positions," said Gov. Mike Huckabee. "The decision to bring over 500 new jobs to Maumelle will make a significant impact on our state’s economy," the Governor added.

Staffing of the new distribution facility, scheduled to employ over 500 new employees, has already begun with a management team in place that includes James D. Grisham, recently appointed Vice President, Operations. By locating the facility in Maumelle Arkansas the Keystone affiliate company will benefit from a competitive and attractive incentive package offered by the State of Arkansas. The Venator Group Retail, Inc., distributors of Champs apparel and sporting goods products previously occupied the building.

"The combination of location and design made the Maumelle facility a natural fit with our growing business needs," stated Michael G. Lutz, Executive Vice President and Chief Operating Officer of Hanover Direct, Inc. "The building is already configured and pre-racked to handle distribution work similar to ours and is well situated with land adjacent for future expansion. A well-trained work force exists in the community with a local government anxious to preserve opportunities within it. Factored together, we are able to accelerate the facility’s opening date while minimizing business risks normally associated with new start-ups."

Hanover Direct’s erizon, Inc. subsidiary is a leading end-to-end technology solutions provider for e-commerce customers through its Keystone Internet Services unit. Its core asset is a proprietary, fully integrated systems platform that offers flexibility, scaleability and functionality. Other key assets include four warehouse fulfillment centers totaling close to 2 million square feet, and four telemarketing/e-care centers with over 750 agent positions.

Keystone, launched in 1998, provides easy-to-install, e-commerce marketing and operational solutions to companies wanting to enter into this channel of distribution. Its unique, multi-channel, multi-brand systems platform has the versatility and flexibility to handle a wide range of product categories in a 24/7 service mode. Its roster currently includes: Oxygen Media; Fogdog Sports, a leading online retailer of sporting goods; The National Geographic Society; Mercata, Inc., a privately held company with funding from Vulcan Ventures, Inc.; KBkids.com, an internet joint venture between BrainPlay.com and Consolidated Stores Corporation; United Retail Group; and The Dress Barn, Inc., a national chain of women’s fashion specialty retail stores now entering new direct marketing channels of distribution.

In addition, 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. On the 'back-end', it offers a comprehensive range of services including fulfillment, order management, inventory management, and facility management. Through its association with the Hanover Brands, Inc. portfolio of catalogs and associated web sites, as well as a growing roster of third-party clients, Keystone has obtained expertise in a broad range of product categories such as home fashions and home improvements, men’s and women’s apparel, and gifts.

About Hanover Direct, Inc.
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, general merchandise 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, Ltd., 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.

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