Formation of 3 Party Business

Great Universal Stores PLC
17 May 2000

                                       
           GUS ANNOUNCES FORMATION OF THIRD PARTY SERVICES BUSINESS
                     AND OUTLINES E-COMMERCE DEVELOPMENTS

The Great Universal Stores P.L.C. (GUS) today announces the formation of its
Third Party Services business and outlines its e-commerce developments.

Third Party Services
*    Formation of powerful outsourcing business, grouping GUS' unique assets,
     skills and resources into a new division under a dedicated management    
     team to provide end-to-end fulfilment services for both on- and off-line 
     companies.  This includes the provision of web design, customer          
     management and call centre facilities, logistics management and delivery 
     services.
*    Acquisition of Reality Group, a leading e-commerce consultancy business
     specialising in web design and systems, which completes the business'    
     end-to-end proposition.
*    New Third Party Services division will trade as Reality.
*    Proforma sales for this new division for the year to March 2000
     approaching £400m; business employs 14,000 people (full time equivalents)
     and already has over 50 external clients.

Web-enabling core businesses
*    Plans to ensure that all products throughout GUS' core businesses are    
     web-enabled, building on its trusted brands, extensive customer base and 
     strengths in catalogue selling, information solutions and logistics.
*    Total group web sales for year to March 2000 of over £25m, which are
     expected at least to double in the current year.

gusco.com
*    Launch of gusco.com, to fund and oversee the development of GUS' e-
     commerce investments.  gusco.com will leverage the Group's existing
     competencies, skills, assets and brands, providing it with greater access
     to new technologies, customers and related markets.
*    Current value of GUS' listed holdings is $85m.

John Peace, Chief Executive of GUS, said:
'When we launched our strategic review in January this year, one of our key
priorities was to re-align GUS' assets to take advantage of new growth
markets.  Our Third Party Services division, branded Reality, directly meets
growing demand from business clients who are seeking to outsource logistics,
customer care and web design.  This is already a substantial business and will
immediately command a market leading position.

Our other initiatives will ensure that we are well-placed to grow in the new
commercial environment as our customers seek to transact an increasing level
of business through e-commerce.'

Enquiries:
GUS            John Peace, Chief Executive              Tel:  [phone]
               David Tyler, Finance Director
               Fay Dodds, Investor Relations

Finsbury       Rupert Younger                           Tel:  [phone]
               Timothy Grey
    
   The announcement is also available on the GUS website: www.gusplc.co.uk
                                                                              
     A presentation to analysts and  investors will be held at Vinopolis, 
                1 Bank End, London SE1 and will start at 9.00am.  

                   A press conference will be held at 12.30pm.
                                                                              
                                       
                                       

1.  Formation of Third Party Services

The Chief Executive's strategy statement on 13 January 2000 said that GUS
would focus on three operating businesses: Multi-Channel Retailing,
Information Services and Third Party Services. GUS today announces the
formation of the latter, bringing together Group assets, people and skills to
create a powerful outsourcing operation in web design, customer care and
logistics. Clients already include e-tailers and retailers operating in the
growing remote shopping market as well as manufacturers, logistics and
financial services companies.

Third Party Services, branded as Reality, immediately commands a market
leading position and offers clients a unique range of end-to-end fulfilment
services separately or in combination.   These are:

* web design and build - primarily via its acquisition of Reality, one of
  Europe's leading providers of web design, systems and consultancy services.
  Clients will benefit from a one-stop-shop facility that helps plan,         
  implement and develop their e-commerce and systems strategy, as well as     
  build, host and develop web sites;

* customer management - sourced from Experian, enabling clients to access
  Europe's largest consumer databases (for customer prospecting and credit
  referencing) and fraud detection products;

* customer contact - through its eight call centres and three lettershops,
  delivering customer account management, payment processing and print
  facilities.  GUS currently services 75m calls and carries out 70m customer
  transactions per annum;

* logistics and warehousing - using its eight warehouses, providing stock
  management and pick and pack facilities;

* delivery - using its White Arrow Express service network.  This is the
  UK's largest business to home parcel delivery operation encompassing 38
  depots, 4,900 employees and 4,000 self-employed couriers. It currently
  delivers over 100m parcels per annum.

GUS announces today that it has acquired Reality Group Ltd, a leading e-
commerce consultancy business employing 70 web design and systems personnel.
Its sales are running at an annual rate of over £5m, are growing rapidly and
the company is profitable.  This acquisition greatly enhances GUS' e-commerce
services and brings additional experienced management to the team.  The
consideration of £35m for the business is in two parts: £10m in cash and £25m
for a share of approximately 4% in the new Third Party Services division,
which will adopt the name of Reality.

Third Party Services is already a substantial business with sales of nearly
£400m and over 14,000 employees (full time equivalent).  In addition to
serving Group customers, Third Party Services already has more than fifty
external clients including Barclaycard, Book Club Associates, Direct Wines,
Readers Digest and QVC, delivering external turnover in excess of £50m.  The
business' objective is now to grow this turnover significantly.

A dedicated management team, with substantial business-to-business,
outsourcing and marketing experience is now in place.  Led by Martin Trees
(previously Experian's President of Marketing & Strategy), it includes Teresa
Capps (customer management - previously Cable & Wireless), Bill Howie
(logistics - previously Tibbett and Britten and Burton), Steve Johnson
(marketing - previously ASDA) and David Riley (sales - previously Experian).
With the acquisition of Reality Group, Chris Gorman and Ian Grabiner also
became key members of the senior management team with responsibilities for e-
commerce consultancy and for retail operations.

Martin Trees, Chief Executive of Third Party Services, said:
'By repositioning our third party service capabilities to be client facing, we
are able more effectively to serve the growing demand for outsourcing.  We
have now combined these services with other Group capabilities and with our
newly acquired web systems company.  Reality is therefore uniquely placed to
offer end-to-end solutions for businesses seeking access to consumers
directly, both on- and off-line.  We help our clients achieve scale and speed
to market and enable them to benefit from technological innovation.  Using our
services, they can respond to market demands quickly and economically.'


2.   Web enabling

GUS is well advanced with its plans to ensure that all products throughout its
core businesses can be accessed by customers on the Internet, leveraging its
trusted brands, extensive customer base and strengths in catalogue selling,
information solutions and logistics.  This drive is key to expanding the reach
of GUS' businesses and of their multi-channel offer across wide product
ranges.

*  Multi-channel retailing

   - Total Group retail sales over the Internet were over £15m in the year to
     March 2000 and are expected at least to double in the coming year.

*  Information Services

   - This month, Experian has launched e-series, a range of products which use
     its existing extensive databases and analytical tools.  These products   
     help clients on the web to detect fraud, validate and verify site        
     visitors, authorise financial transactions and develop customer sales and
     marketing strategies.

   - Recent client wins for Experian's web enabled products include Intel in
     the US (confirming the identity of patients for healthcare providers) and
     BankOne in the UK (supporting leading ISP credit cards).

   - Experian's web sales were about £10m in the year to March 2000 and are
     expected at least to double this year.


3.   gusco.com

GUS today announces the launch of gusco.com to fund and oversee the
development of its e-commerce investments.  With its own board led by Michael
de Kare-Silver, Group e-commerce Director, gusco.com is a separate unit with
dedicated teams, working in close collaboration with each of the Group's other
businesses.

gusco.com will leverage the Group's existing competencies, skills, assets and
brands, providing it with greater access to new technologies, customers and
related markets.  Activities will be managed through two vehicles:

* e-ventures - which includes fully and partly-owned e-commerce ventures
  run by GUS management, such as MyPoints Europe, a web-based loyalty scheme.

* e-investments - which will hold minority investments in businesses that
  offer synergies with other GUS operations.

The current market value of GUS' listed holdings is $85m.