KB Toys Expands Relationship With Sears

Toy Retailer to Supply and Fulfill Wish Book, sears.com Orders; Develop Exclusive 'My First Craftsman' Licensed Toys

KB Toys and Sears, Roebuck and Co. (NYSE: S) are expanding a relationship that began last year with a test of 29 "KB Toys at Sears" shops at Sears stores in Los Angeles, Detroit, Mobile and Chicago.

(Photo: http://www.newscom.com/cgi-bin/prnh/20020926/CGTH002 )

Through this expanded relationship, KB Toys becomes the exclusive toy supplier for Sears Wish Book® catalog and sears.com.

KB Toys also has entered into a trademark license agreement with Sears under which KB Toys has developed Craftsman branded toy tools. The toys will be marketed under the brand "My First Craftsman™", and will be offered for sale this holiday shopping season through both KB Toys and Sears retail channels.

Finally, beginning in mid-October 2002, KB Toys and Sears will launch the second phase test of the KB Toys at Sears "store within a store" concept, increasing the number of locations from last year's 29 to 77 locations for the 2002 holiday season.

"This season, through this expanded relationship with KB Toys, a recognized leader in the toy industry, Sears customers will find one of the most exciting and extensive selection of toys and video games ever offered in Sears Wish Book and on sears.com," said Dennis Honan, vice president and general manager of Sears Customer Direct.

"It's our privilege to be working with Sears, one of America's most trusted retail brands," said Michael L. Glazer, President and CEO of KB Toys. "These initiatives build upon the success we experienced last year working with Sears within their stores. This expanded relationship is based on our common commitment to offering customers a large assortment of trend right merchandise, exclusive product lines and great service in a variety of retail formats."

Expanded Toy Selections at Sears Wish Book and sears.com

This year, Sears Wish Book and sears.com will offer customers one of the largest selections of toys for the holidays ever offered by Sears. The expanded merchandise selection offered in the Sears Wish Book includes approximately 900 items. The toy and video game assortment offered through sears.com will reflect even more variety and will include approximately 2,500 items. Now, customers shopping sears.com will enjoy expanded selections in the important holiday categories, including pre-school, learning and video game categories. In addition, a number of new high quality brands will be available at sears.com for the first time including LeapFrog®, Radio Flyer® and Neurosmith®.

KB Toys also will provide fulfillment services for all toy and video game products offered through the 2002 Sears Wish Book and sears.com through its state-of-the-art fulfillment center located in Blairs, VA. Sears will continue to manage all other aspects of the Sears Wish Book and sears.com including customer service, order processing, catalog distribution and site production and design.

Introducing Exclusive "My First Craftsman" Licensed Toys

Under a new trademark license agreement with Sears, KB Toys has developed a line of toys that will be sold under the brand "My First Craftsman." These exclusive toys are high quality, affordable, and feature great play value under the "My First Craftsman" brand.

"My First Craftsman" toys will be offered for sale in time for the holidays through both Sears and KB Toys retail channels and represent established quality tools that consumers have trusted for decades. Now, children will be able to emulate their parents through activities and role-play using high quality "My First Craftsman" toys from KB Toys.

Customers can choose from a variety of "My First Craftsman" toys including tool workbench activity center, a tool and pouch set, power tools, chainsaw, 52-piece boxed tool set and a big rig truck with removable tool box. "My First Craftsman" toys will be available in more than 460 Sears locations this holiday season as well as the Sears Wish Book, sears.com, more than 1,300 KB Toys stores and KBtoys.com.

KB Toys at Sears Test Expanded

In October 2002, KB Toys and Sears will begin a second phase test of the KB Toys at Sears "store within a store" concept increasing the number of locations from 29 last year to 77 locations during the 2002 holiday season. These 'stores within a store' will average approximately 1,000 square feet and will continue to be branded as "KB Toys at Sears." Each KB Toys at Sears will offer customers a large selection of name-brand toys and KB Toys exclusives. The KB Toys at Sears will operate from mid-October through early January.

In addition to the markets tested in 2001 (Los Angeles, CA; Detroit, MI; Chicago, IL and Mobile, AL), KB Toys at Sears will be opening at select Sears stores within Florida, Georgia, Hawaii, Indiana, Massachusetts, New Jersey, New York, Pennsylvania, Rhode Island and Washington.

Forward-Looking Statements

This release contains forward-looking statements based on assumptions about the future that are subject to risks and uncertainties, such as competitive conditions in retail; changes in consumer confidence and spending; anticipated cash flow; general economic conditions and normal business uncertainty. While the company believes in a successful implementation of this relationship with KB Toys, it cautions that actual results may differ materially. The company intends these forward-looking statements to speak only as of the time of this presentation and does not undertake to update or revise them as more information becomes available.

About KB Toys

KB Toys is the nation's largest combined mall-based and online specialty toy retailer, operating more than 1,300 stores in all 50 states, the American Territory of Guam and the Commonwealth of Puerto Rico. KB Toys operates retail stores under the names KB Toys®, KB Toy Works®, KB Toy Outlet™, Toy Liquidators®, KB Toy Express® and offers online shopping through KBtoys.com™ ( http://www.kbtoys.com/ ) and eToys® ( http://www.etoys.com/ ). KB Holdings, Inc., the parent corporation, is a privately held company headquartered in Pittsfield, Massachusetts.

About Sears Roebuck and Co.

Sears, Roebuck and Co. is a broadline retailer with significant service and credit businesses. In 2001, the company's annual revenue was more than $41 billion. The company offers its wide range of apparel, home and automotive products and services to families in the U.S. through Sears stores nationwide, including approximately 870 full-line stores. Sears also offers a variety of merchandise and services through its Web site, http://www.sears.com/. In June 2002, Sears acquired Lands' End, a direct merchant of traditionally styled, classic Lands' End clothing offered to customers around the world through regular mailings of its specialty catalogs and online at http://www.landsend.com/ .

      KB Toys At Select Sears Stores This Holiday Season

          CITY         ST         CITY           ST
      MOBILE           AL      BRAINTREE         MA
      MONTGOMERY       AL      BURLINGTON        MA
      BREA             CA      DEDHAM            MA
      CERRITOS         CA      MARLBOROUGH       MA
      CONCORD          CA      SAUGUS            MA
      COSTA MESA       CA      DEARBORN          MI
      EL CAJON         CA      LINCOLN PARK      MI
      HAYWARD          CA      LIVONIA           MI
      HOLLYWOOD        CA      NOVI              MI
      LAGUNA HILLS     CA      ROSEVILLE         MI
      MONTCLAIR        CA      TROY              MI
      NEWARK           CA      DEPTFORD          NJ
      NORTHRIDGE       CA      JERSEY CITY       NJ
      PLEASANTON       CA      MIDDLETOWN        NJ
      SAN BERNARDINO   CA      PARAMUS           NJ
      SAN BRUNO        CA      ROCKAWAY          NJ
      SAN JOSE         CA      WATCHUNG          NJ
      SAN JOSE         CA      WAYNE             NJ
      SANTA ROSA       CA      WOODBRIDGE        NJ
      TORRANCE         CA      BAY SHORE         NY
      WESTMINSTER      CA      BROOKLYN          NY
      PENSACOLA        FL      HICKSVILLE        NY
      ATLANTA          GA      LAKE GROVE        NY
      DULUTH           GA      MIDDLETOWN        NY
      KENNESAW         GA      NANUET            NY
      LITHONIA         GA      REGO PARK         NY
      MORROW           GA      STATEN ISLAND     NY
      AIEA             HI      YONKERS           NY
      HONOLULU         HI      PHILADELPHIA      PA
      AURORA           IL      WARWICK           RI
      CALUMET CITY     IL      REDMOND           WA
      CHICAGO          IL      SEATTLE           WA
      CHICAGO          IL      TACOMA            WA
      CHICAGO RIDGE    IL      TUKWILA           WA
      OAK BROOK        IL
      ORLAND PARK      IL
      SCHAUMBURG       IL


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SOURCE: Sears, Roebuck and Co.

CONTACT: John P. Reilly, Director, Sales Promotion & Public Relations of
KB Toys, +1-413-496-3427, Fax, +1-413-496-3616, or E-mail,
jreilly@kbtoys.com , or Peggy Palter, Sr. Manager, Public Relations of Sears,
+1-847-286-8361, Fax, +1-847-286-5918, E-mail, ppalter@sears.com

Web site: http://www.sears.com/

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