BrandDirect Marketing Inc. Receives $75 Million in Strategic Investments to Develop New Products, Markets.

SHELTON, Conn.--(BUSINESS WIRE)--Nov. 11, 1999--

Reader's Digest, Federated Department Stores Invest Separately

in Leading Operator of Membership Clubs

BrandDirect Marketing Inc., one of the nation's largest operators of membership clubs, announced today that in two separate and unrelated transactions Reader's Digest Association, Inc. (NYSE: RDA, RDB) and FACS Group, Inc. (a division of Federated Department Stores, Inc.) (NYSE: FD) have committed to investments totaling $75 million in the Company. BrandDirect said the investments represent significant interest by both major consumer products companies to develop strong brand name affinity clubs for their customers and develop new markets.

Federated and RDA join existing investors in BrandDirect that include Advanta Partners, Boston Millennia Partners, and the Still River Fund.

"BrandDirect is a leader in relationship marketing - we strengthen the bond between leading consumer brands and customers," said Tom St. Denis, president and chief executive officer. "Our expertise is derived from years of delivering value-added, loyalty-based membership clubs and products to consumers. Now we plan to deliver that expertise for two great national brands that are also major investors in our company."

Federated, which operates more than 400 major department stores in the U.S. including Bloomingdale's, The Bon Marche, Burdines, Goldsmith's, Lazarus, Macy's, Rich's, and Stern's, has invested $25 million in BrandDirect. A separate business agreement between the two companies provides for the exclusive sale of BrandDirect's membership clubs to credit card customers of Federated's retail divisions. It also provides for new customized programs based on discounted point-of-sale and internet-based products and services from Federated's retail divisions to be offered through BrandDirect's marketing channels, including the internet, and for BrandDirect to help Federated add value to its proprietary credit card base.

"We're extremely pleased with the broad relationship we've established with Federated Department Stores," St. Denis said. "We view this partnership as very open-ended, and we believe this deal will result in excellent marketing opportunities for both parties."

Terms of the Reader's Digest investment, which were disclosed in October, include a $50 million investment in cash for an 18% share of BrandDirect and the opportunity for the global publisher and marketer to increase its stake in the Company. Initial efforts of the marketing partnership will focus on creation of membership clubs in the United States that are targeted to Reader's Digest customers and other databases, and international joint ventures also are contemplated. In addition, the partnership would focus on clubs defined by Reader's Digest brands, including the magazine and special interest publications, including New Choices; Walking, American Health for Women, Moneywise, and The Family Handyman.

"We're particularly excited about the international partnership that Reader's Digest wants to forge with us. Our branded membership clubs have great potential outside the U.S., and now we can form joint ventures with a company that has a tremendous global reputation," St. Denis said.

Headquartered in Shelton, Connecticut, BrandDirect Marketing Inc. (www.branddirect.com) is a leading affinity membership-based direct marketer engaged in the development, management and sale of branded membership clubs, products and services. BrandDirect provides a new generation of membership services that offer exceptional value to customers while leveraging established brand names such as Conde Nast, Arthur Frommer, CBS SportsLine, Field & Stream and Children's Television Workshop.