The Vermont Teddy Bear Co. Plans to Expand Its Newport Bear Output by 50%.

Business Editors

SHELBURNE, Vt.--(BUSINESS WIRE)--Sept. 28, 2000

The Vermont Teddy Bear Company(R) (NASDAQ: BEAR) announced today plans to increase Bear production out of its Newport, Vermont facility by 50% in order to meet growing demand for Bear-Gram(R) gifts. The Company recently reported sales growth of 54% from $21.6 million for the fiscal year ending June 1999 $33.3 million for fiscal year ending June of 2000. With this growth, the Company also reported a doubling of its profits from $1.7 million to $3.7 million for fiscal year 2000.

The Company's Newport manufacturing facility produces approximately 20,000 Bears from start to finish every month, currently representing half of the Company's total production output. The goal is to increase production in Newport to at least 30,000 units a month by June 2001.

Company officials are working with R.E.M. Development Company on a real estate strategy to support the growth plan and are exploring the feasibility of expanding at the current Newport location. This 12,000 square foot facility is leased from R.E.M.

CEO Elisabeth Robert believes Newport is the obvious choice for further manufacturing expansion.

"Our Newport employees moved up the learning curve at an impressive pace and there are more skilled people wanting to work for us in this area, whereas in our Shelburne (VT) location, we continue to battle Chittenden County's low unemployment rate." said Robert. "Our Newport Bear Crew and the city of Newport are phenomenal and we are deeply committed to them both."

The expansion will involve all areas of manufacturing and will include adding more equipment and staff.

The Vermont Teddy Bear Company opened the Newport facility in November 1999 with 25 full-time skilled sewers to stitch Bear parts. Today the Company employs 74 workers and now has cutting, stuffing, and assembly equipment, enabling the group to handcraft complete Bears. The Bears are then shipped back to the Shelburne plant for order fulfillment.

Recently the Company was named "Employer of the Year" by the St. Johnsbury chapter of the Business and Professional Women's Organization, a national group dedicated to raising the standards for women in the workplace.

The Vermont Teddy Bear Company is the largest maker of handcrafted Teddy Bears, making more than 425,000 Bears at its Shelburne and Newport facilities for its Bear-Gram gift delivery service. Each Bear-Gram gift includes a customized handcrafted Bear dressed to suit a special life event or holiday, enclosed in a gift box with a personalized greeting card and candy treat. Ordering a Bear-Gram gift is easy. Customers can call 1-800-829-BEAR where friendly Bear Counselors(R) assist with Bear selection, or they can log onto the Company's popular website www.VermontTeddyBear.com . Orders placed by 4 PM (Eastern Standard time) or 3 PM on the Internet can be delivered within 24 hours if requested.

The foregoing can be interpreted as including forward looking statements under the Private Securities Litigation Reform Act of 1995. Actual future results may differ materially from those suggested by the statements above.