The Right Start Reports Second Quarter Results

Calabasas, California, UNITED STATES


CALABASAS, Calif., Sept. 14, 2001 (PRIMEZONE) -- The Right Start, Inc. (Nasdaq:RTST), today announced results for its second quarter ended August 4, 2001.

Retail sales for the thirteen-week period were $12,034,000, an increase of 11.9% over retail sales of $10,757,000 for the thirteen weeks ended July 29, 2001. Same store sales, or sales for stores open at least 14 months, decreased 1.0%.

For the second quarter, the Company's consolidated earnings before interest, taxes, depreciation and amortization, and before new store pre-opening costs, store closing expense, non-cash compensation and executive severance expense ("EBITDA"), consisted of a loss of $311,000, compared to a loss of $114,000 last year.

Retail sales for the twenty-six weeks ended August 4, 2001 were $23,037,000, an increase of 9.3% over retail sales for the twenty-six weeks ended July 29, 2000. Same store sales, or sales for stores open at least 14 months, decreased 2.7%.

For the six months ended August 4, 2001, the Company's consolidated earnings, before interest, taxes, depreciation and amortization, and before new store pre-opening costs, store closing expense, non-cash compensation and executive severance expense ("EBITDA"), consisted of a loss of $639,000, compared to a loss of $84,000 last year.

Jerry R. Welch, Chairman and Chief Executive Officer, said, "The retailing environment for the first half of the year for kids products was difficult. Due to the bankruptcy filings and accompanying liquidation of inventories for E-Toys, Natural Wonders and Store of Knowledge, our same store sales and gross margins were adversely impacted. This affect was primarily felt in our 26 regional mall stores whose same stores sales for the first half were down 9.1%. Although our neighborhood street locations were also affected, they still turned in an excellent performance with an increase in same store sales of 10.1%."

Mr. Welch further stated, "We completed the previously announced acquisition of Zany Brainy last week and we have already commenced the integration of our operations. We will maintain both the Zany Brainy and Right Start brands and we intend to aggressively cross-market and cross-promote between the Zany stores and Right Start stores. In addition, we will quickly consolidate all administrative functions in order to streamline operations and reduce costs. Although we have much to do over the coming months, we believe this is a perfect fit between Zany Brainy and The Right Start and we expect the combined operations to be profitable for the second half of this fiscal year."

For the quarter, the Company reported that it opened two new neighborhood street locations in Kansas City and Atlanta, ending the quarter with 67 stores in operation under its Right Start brand. Currently, the Company's store mix consists of 26 regional mall locations and 42 neighborhood locations under its Right Start brand. Since 1997, the Company has exclusively focused on its street store concept for new store growth under its Right Start brand and expanded to 256 retail locations with the recent acquisition of 187 Zany Brainy stores.

About Right Start

The Right Start, Inc. is a leading national specialty retailer of high quality developmental, educational and care products, toys, games, books and multimedia products for infants and, with its acquisition of Zany Brainy's assets, children through age 12. The Right Start brand originated in 1985 through the creation of the award-winning Right Start Catalog(tm). The Right Start now operates 256 retail stores nationwide and is based in Calabasas, Calif.

This press release contains certain forward-looking statements with respect to the anticipated benefits of combining the companies' brands and retail store base, and the investment in the Company that may be impacted by factors including, but not limited to, the need for shareholder approval of the investment, competition from other retailers and potential product liability claims, potential operational or integration challenges, changes in consumer spending, dependence on independent manufacturers and suppliers and their credit terms and other risks included in The Right Start's filings with the Securities and Exchange Commission.


                         THE RIGHT START, INC.
                        STATEMENT OF OPERATIONS
                              (unaudited)

                                         Thirteen weeks ended
                                         --------------------
                                 August 4, 2001        July 29, 2000
                                 --------------        -------------

 Retail store sales               $ 12,034,000          $ 10,757,000
 Sales to RightStart.com             1,489,000             2,191,000
                                  ------------          ------------
      Net sales                     13,523,000            12,948,000

 Costs and expenses:
  Cost of goods sold
   - merchandise                     6,250,000             5,420,000
  Cost of goods sold
   to RightStart.com                 1,489,000             2,191,000
  Operating expense                  4,858,000             4,201,000
  Marketing and advertising
   expense                             163,000               296,000
  General and administrative
   expense                           1,074,000               954,000
  Non-cash compensation expense          1,000                 8,000
  Executive severance expense            3,000                  --   
  Pre-opening costs                    100,000                45,000
  Depreciation and
   amortization expense                655,000               509,000
  Store closing expense                   --                 341,000
                                  ------------          ------------
 Operating loss                     (1,070,000)           (1,017,000)
  Loss on investment
   in RightStart.com                 2,247,000
  Interest expense                     198,000               316,000
                                  ------------          ------------

 Pre-tax loss                       (1,268,000)           (3,580,000)
 Income tax provision                   13,000                19,000
                                  ------------          ------------
 Net loss                         $ (1,281,000)         $ (3,599,000)
                                  ============          ============
 Basic loss per share             $      (0.26)         $      (0.66)
 Basic weighted average
  number of shares
  outstanding                        5,617,275             5,614,175


                          THE RIGHT START, INC.
                STATEMENT OF OPERATIONS FOR SIX MONTHS
                              (unaudited)

                                       Twenty-six weeks ended
                                       ----------------------
                                 August 4, 2001        July 29, 2000
                                 --------------        -------------

 Retail store sales               $ 23,037,000          $ 21,086,000
 Sales to RightStart.com             3,207,000             5,117,000
                                  ------------          ------------
      Net sales                     26,244,000            26,203,000

 Costs and expenses:
  Cost of goods sold
   - merchandise                    11,793,000            10,481,000
  Cost of goods sold
   to RightStart.com                 3,207,000             5,117,000
  Operating expense                  9,527,000             8,234,000
  Marketing and advertising
   expense                             308,000               545,000
  General and administrative
   expense                           2,048,000             1,910,000
  Non-cash compensation expense         32,000                19,000
  Executive severance expense           81,000                  --
  Pre-opening costs                    183,000               201,000
  Depreciation and
   amortization expense              1,290,000             1,049,000
  Store closing expense                   --                 341,000
                                  ------------          ------------
 Operating loss                     (2,225,000)           (1,694,000)

  Loss on investment

   in RightStart.com                 5,996,000

  Interest expense                     418,000               557,000
                                  ------------          ------------
 Pre-tax loss                       (2,643,000)           (8,247,000)
 Income tax provision                   25,000                39,000
                                  ------------          ------------
 Net loss                         $ (2,668,000)         $ (8,286,000)
                                  ============          ============

 Basic loss per share             $      (0.54)         $      (1.51)
 Basic weighted average
  number of shares
  outstanding                        5,617,275             5,614,175



        

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