REDE Redenvelope (MM)

RedEnvelope Reports On Valentine's Day Fulfillment Execution SAN FRANCISCO, Feb. 25 /PRNewswire-FirstCall/ -- RedEnvelope, Inc. , the premier multi-channel gift retailer, reported on the performance of its Valentine's Day fulfillment execution. On the Company's peak business day, it processed orders with a 99.9% accuracy rate, based on the Company's outbound quality control sampling. That day's volume represented approximately 80% of a peak day's volume during the 2003 Holiday season. During the 2004 Valentine's Day season, product personalization continued to be a strong gifting category, and the Company reported that it was able to extend the ordering deadline for personalized products by three extra days. In addition, RedEnvelope was successful in allowing customers to shop until 5:00 p.m. (ET) on February 13 within its Express Gifts Collection with guaranteed Saturday delivery for Valentine's Day. Since the 2003 Holiday season, the Company has worked to improve the performance of its distribution center. Some of the highlights include expedited personalization processing time, improved product flow through the facility, and improved processing time for both receiving and for returns. These improvements allowed the Company to processat least 95% of orders within eight hours of receipt and to ship every order within 24 hours during the peak business days leading up to Valentine's Day. "I am especially pleased with the performance at our fulfillment center this Valentine's Day, from the accuracy of the filled orders to the presentation of the gifts," said Alison May, President and Chief Executive Officer. "The implementation of our new warehouse management system is proceeding according to schedule and should further improve efficiencies. Additionally, we will be upgrading our materials handling equipment, which we believe will complement our new warehouse management system," she added. RedEnvelope, Inc. is a multi-channel retailer of upscale gifts for every occasion, every day. RedEnvelope offers a unique assortment of imaginative gifts through its catalog and website, http://www.redenvelope.com/. This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve risks, uncertainties and assumptions, including statements regarding systems and process improvements we currently plan to undertake. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors. Factors that could affect future performance include, but are not limited to: unanticipated delays, expenses or other difficulties in implementing software systems; termination of existing marketing relationships or failure to develop successful new marketing relationships; any significant disruption of our operations due to network or systems failures or disruptions, power outages, regulatory actions, natural disasters or attacks; our limited operating history; difficulties encountered in predicting consumer preferences, managing inventory levels or gaining access to popular products; increased or more effective competition from other retailers; difficulties encountered in managing our growth; difficulties encountered in, or increased costs of, fulfillment; increased costs for, or delays in the receipt of, merchandise ordered by us; seasonality of the retail business; increases in shipping, advertising or marketing costs; lower-than-expected utilization of electronic commerce by consumers; litigation that may have an adverse effect on our financial results, product offerings or reputation; changes in key management personnel; difficulties encountered in properly staffing our operations or providing satisfactory customer service; changes in government or regulatory requirements affecting e-commerce that may restrict, or increase the cost of, our operations, and other risk factors described in detail in our Prospectus dated September 24, 2003, and our Report on Form 10-Q for the period ended December 28, 2003, including, without limitation, those discussed under the captions, "Risk Factors," "Business," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Factors that May Affect Future Operating Results," both of which documents are on file with the Securities and Exchange Commission (the "SEC") and available at the SEC's website at http://www.sec.gov/. These forward-looking statements are made only as of the date of this press release, and RedEnvelope undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. NOTE: RedEnvelope and the RedEnvelope logo are registered trademarks of RedEnvelope, Inc. MEDIA CONTACT: Astrid Stevenson RedEnvelope 415-371-9100, ext. 293 INVESTOR CONTACT: Jordan Goldstein Financial Dynamics 415-439-4500 DATASOURCE: RedEnvelope, Inc. CONTACT: media, Astrid Stevenson of RedEnvelope, +1-415-371-9100, ext. 293; or investors, Jordan Goldstein of Financial Dynamics, +1-415-439-4500, for RedEnvelope Web site: http://www.redenvelope.com/

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