Strategic Investment, etc.

Character Group PLC
17 July 2000


The Character Group PLC ('Character Group' or 'the Company')

Proposed strategic investment in the Company

The board of directors of Character Group ('the Board') is pleased to announce
the proposed subscription by Toys Investments S.A. ('TISA') for 2,082,663 new
ordinary shares in the Company ('Ordinary Shares') representing 9.9 per cent.
of Character Group's existing issued share capital, at a price of 100 pence
per share ('the Transaction').

Enrico Preziosi and Claudio Luti (' the Investors') are the beneficial owners
of TISA and have an aggregate interest in approximately 85.3 per cent. of one
of Italy's leading toy companies, Giochi Preziosi S.p.A. ('Giochi Preziosi').
Giochi Preziosi designs, manufactures, distributes and retails toys and
related products. It is proposed that Enrico Preziosi will join the Board as a
Non-Executive Director of TCG following completion of the Transaction.

In addition, Richard King, Chairman of Character Group, has agreed to sell or
procure the sale of 1,385,286 ordinary shares in which he has an interest to
TISA, representing approximately 6.6 per cent. of Character Group's existing
issued share capital at 100 pence per share ('the Sale'). Following the Sale,
which is conditional upon completion of the Transaction, Richard King will be
interested in 3,107,714 ordinary shares representing approximately 13.4 per
cent. of Character Group's enlarged issued share capital.

Following completion of the Transaction and the Sale, TISA will have an
interest in approximately 15.0 per cent. of Character Group's enlarged issued
share capital.

Both Richard King and TISA have entered into arrangements whereby they have
undertaken not to dispose of shares in Character Group, subject to certain
limited exceptions, in which they have an interest for a period of 18 months
form the date of completion of the Transaction.

Giochi Preziosi, which has enjoyed a trading relationship with Character Group
since 1997, has grown rapidly since its inception in 1984. In the financial
year ended 31 August 1999 it generated sales of 304.1 billion lire (£97.7
million) and made profits before taxation of 18.7 billion lire (£6.0 million).
Net assets as at 31 August 1999 were 71.4 billion lire (£22.9 million).  
Since that date Giochi Preziosi has experienced a period of significant sales
growth.

The Board believes that not only will the net proceeds of the Transaction
(which are expected to amount to approximately £1.9 million) strengthen
Character Group's balance sheet but that the ongoing relationship with Giochi
Preziosi's principal shareholders will provide new opportunities for Character
Group to create shareholder value both by acquisition and organically.

Further details of the Transaction will be contained in a circular to
Character Group shareholders which is expected to be posted shortly. The
circular will contain a Notice of Extraordinary General Meeting at which a
special resolution will be proposed to shareholders to, inter alia, disapply
pre-emption rights in respect of the new Ordinary Shares to be subscribed by
TISA.

Application will be made to the UK Listing Authority for the new Ordinary
Shares to be issued pursuant to the Transaction to be admitted to the Official
List. Application will also be made to the London Stock Exchange for those
shares to be admitted to trading on its market for listed securities in
accordance with the rules of the London Stock Exchange. Such admission is
expected to become effective in August 2000.

Richard King, Chairman of Character Group commented: 'We are delighted that
the major shareholders of Giochi Preziosi wish to take a strategic stake in
The Character Group.

There are many similarities between Giochi Preziosi and ourselves both in
philosophy and strategic direction.  We have both diversified over the past
years to include giftware, stationery, bags, computer accessories, games,
watches, and most recently digital cameras in our product ranges. 

We have enjoyed a successful trading relationship together over the past three
years as both supplier and customer and we have  both recognised the need to
continue this trend and also establish a wide marketplace for our products in
our home, European and international markets.

Strategic co-operation between our companies should greatly strengthen our
position with suppliers, licensors and customers, and create further
opportunities for growth both organically and by acquisition.'

Enrico Preziosi, President of Giochi Preziosi said:  'Since August 1999,
Giochi Preziosi has enjoyed significant expansion through acquisitions and
organic growth.   

We are very happy to be making this investment and to be forging a stronger
trading relationship with Character Group which will enable both our companies
to become more dominant in the European and International market place.'


For further information:

The Character Group plc

Richard King, Chairman                            Tel: [phone]

Kiran Shah, Group Finance Director

Collins Stewart Limited

Mark Connelly                                     Tel: [phone]