Marks Bros. Jewelers, Inc. Reports Record Holiday Sales -- November and December Comparable Store Sales Increased 8.6% --.

CHICAGO--(BUSINESS WIRE)--Jan. 7, 1999--Marks Bros. Jewelers, Inc. (Nasdaq:MBJI) today reported sales for November and December 1998 rose 39.4% to $87.1 million compared to $62.5 million for the same period in 1997. Comparable store sales for the two month period increased 8.6%, versus a comparable store sales gain of 11.4% for November and December of 1997. Comparable store sales include the Jewel Box stores which posted a 6.1% comparable store sales increase during the two month period.

Year-to-date sales for the eleven months ended December 31, 1998 increased 26.4% to $224 million, versus $177.2 million for the eleven month period last year. Comparable store sales for the period rose 5.7% which includes sales contributions from Jewel Box, versus a comparable store sales increase of 4.8% for the eleven month period ended December 31, 1997.

Commenting on the results, Hugh Patinkin, Chairman and Chief Executive Officer, stated, "We are very pleased with record holiday sales results which significantly exceeded our expectations. Particularly gratifying are the strong comp store sales gains we achieved over our 11.4% comp store sales increase during the holiday season last year. We are pleased to note that this continues our successful track record of posting 20 consecutive quarters of positive comp store sales."

"We are excited with the strong performance of the 32 Jewel Box locations which we acquired in September 1998. We have successfully integrated these stores into our operations. All of these stores were converted to either the Whitehall or Lundstrom tradename as of mid-November 1998. Customer demand for our upscale merchandise assortments at these stores was better than anticipated. In addition, sales at the other 35 stores we opened in 1998 continued to be strong."

"Our increased sales were attributable in part to our strategic decision to invest greater resources in our operations. The investments included greater than normal staffing levels, an increase in our marketing costs and higher credit expenses associated with our increased usage of one year interest free credit. Therefore, we expect SG&A expenses for the quarter to be slightly above plan."

"Given the strength of our performance, we are comfortable with our financial plan for the fourth quarter. Looking ahead, we are well-positioned to pursue our growth objectives for 1999 and expect to open at least 35 stores in the upcoming fiscal year," Mr. Patinkin concluded.

Marks Bros. Jewelers, Inc. is a leading national specialty retailer of fine jewelry, currently operating 250 stores in 29 states. The Company operates stores in regional and superregional shopping malls under the names Whitehall Co. Jewellers, Lundstrom Jewelers and Marks Bros. Jewelers.

All statements, trend analysis and other information contained in this report relative to markets for the Company's products and trends in the Company's operations or financial results, as well as other statements including words such as "anticipate," "believe," "plan," "estimate," "expect," "intend" and other similar expressions, constitute forward-looking statements under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may cause actual results to be materially different from those contemplated by the forward-looking statements. Such factors include, among other things: (1) the extent and results of the Company's store expansion strategy; (2) the seasonality of the Company's business; (3) economic conditions, the retail sales environment and the Company's ability to execute its business strategy and the related effects on comparable store sales and other results; (4) the success of the Company's marketing and promotional programs; (5) the extent to which the Company is able to retain and attract key personnel; (6) competition; (7) the availability and cost of consumer credit; (8) relationships with suppliers; (9) the Company's leverage; (10) fluctuations in gem and gold prices; (11) the efficient and successful integration of the Jewel Box locations and assets into the Company's existing operations (12) regulation; (13) timely "Year 2000" compliance by the Company and third party suppliers and service providers; (14) the Company's ability to maintain adequate information systems capacity and infrastructure; and (15) the risk factors listed from time to time in the Company's filings with the Securities and Exchange Commission.