FACTORY CARD OUTLET LOGO Factory Card Outlet logo. (PRNewsFoto)[HD] NAPERVILLE, IL USA

    NAPERVILLE, Ill., July 26 /PRNewswire/ -- Factory Card Outlet Corp.
(FCPYQ) announced that the hearing to consider confirmation of its amended
plan of reorganization has been adjourned by the Bankruptcy Court to
August 20, 2001.
    (Photo:  http://www.newscom.com/cgi-bin/prnh/19991220/FCPYLOGO )
    The request for adjournment was made by all of the co-proponents of the
amended plan: The Company, the Creditors' Committee appointed in the Company's
Chapter 11 Case and Factory Card Outlet Holdings, Inc.  The Equity Committee
appointed in the Company's Chapter 11 Case also supported the adjournment
request.
    The request for the adjournment was made as a result of Factory Card
Holdings, Inc. having exercised its option to substitute another investor in
place of its original investor, Ingenium Capital Group of Scottsdale, AZ.
    Discussions with the new investor, which is affiliated with a public
company, have included the potential for reaching a consensual agreement with
the Equity Committee.  The Equity Committee had opposed confirmation of the
amended plan of reorganization, which does not provide for any distribution to
the Company's shareholders.  All parties, including the Company's management,
agreed to the adjournment in order to evaluate this new development as well as
other alternatives, including, a plan proposal that has been made by certain
other parties that is supported by the Equity Committee.
    William E. Freeman, President and Chief Executive Officer of the Company,
stated, "While we are certainly disappointed that the confirmation hearing was
adjourned, we are pleased that the Company, its creditors and, hopefully, its
stockholders, will have an opportunity to evaluate proposals from a multiple
of parties before determining which alternative offers the Company and its
constituencies their best prospects for the Company's prompt emergence from
Chapter 11."  Mr. Freeman continued noting "I am not surprised that there are
a number of parties interested in the Company, given the remarkable turnaround
that we have experienced while in Chapter 11.  We ended last year (53 weeks)
with $226.1 million in sales and EBITDAR of $9.8 million with 182 stores.
Despite a tougher retail climate this year, The Company's comparable stores
sales growth of 4% is very encouraging and confirms that the hard work by our
key management and associates to effect this turnaround continues to bear
positive results."
    "We remain committed to supporting The Company and are encouraged by the
positive results of their turnaround efforts," said Steve Cole, Wells Fargo
Retail Finance Senior Managing Director and Co-Chief Operating Officer.  "We
are working to extend their DIP financing to the end of this fiscal year and
we remain excited about the possibility of providing The Company with exit
financing."
    For the five month period, just ending July 7, 2001, The Company's sales
are $98.9 million (173 stores) versus $99.0 million last year.  EBITDAR for
the period is $7.4 million compared to $7.6 million last year.
    Factory Card Outlet operates 173 company-owned retail stores, in 20
states, offering a vast assortment of party supplies, greeting cards,
gift-wrap and other special occasion merchandise at everyday value prices.  On
March 23, 1999, the company filed a petition for reorganization under Chapter
11 of Title 11 of the United States Code and is currently operating as a
debtor in possession.
    Certain statements in this news release constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995.  Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance, or achievements of the Company, or industry results, to be
materially different from any future results, performance, or achievements
express or implied by such forward-looking statements.  All forward-looking
statements relating to aspects of any plan of reorganization that may be
submitted in connection with the Chapter 11 case are dependent upon, among
other things, further improvements in the Company's store-level operating
performance, the proposal of an acceptable reorganization plan and the
confirmation of such plan by the bankruptcy court.
    In general, the results, performance or achievements of the Company and
its stores and the value of the Company's common stock are dependent upon a
number of factors including, without limitation, the impact of the Chapter 11
case; the ability to meet sales plans; weather and economic conditions;
dependence on key personnel; competition; ability to anticipate merchandise
trends and consumer demand; ability to maintain relationships with suppliers;
successful implementation of information systems; successful handling of
merchandise logistics; inventory shrinkage; ability to meet future capital
needs; governmental regulations; and other factors both referenced and not
referenced in the Company's filings with the Securities and Exchange
Commission.

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