April 27, 1999

TOYS "R" US ANNOUNCES AGGRESSIVE ONLINE RETAILING STRATEGY

- Establishes toysrus.com as Separate Subsidiary Located in Northern

California

- Partners with Benchmark Capital

- Acquires 500,000 Square Foot State-of-the-Art Fulfillment Center

Paramus, New Jersey (April 27, 1999) - Toys "R" Us (NYSE:TOY), today announced several major steps in the company's e-commerce strategy to be the clear leader in the online retail market for toys and children's products by fourth quarter 1999. To that end, the company has announced three key initiatives: the establishment of toysrus.com as a separate subsidiary headquartered in Northern California; a strategic partnership with Benchmark Capital, the leading Silicon Valley venture capital firm; and the ac quisition of a 500,000 square foot, state-of-the-art, fully automated distribution center strategically located in Memphis, Tennessee.

"These initiatives underscore our commitment to market share leadership for the Toys "R" Us e-commerce business, and its critical importance to our overall future," said Robert C. Nakasone, Chief Executive Officer. "We are committed to providing maximum convenience to our millions of worldwide customers by providing them access to our products and services through all available shopping channels. The combination of the most respected and powerful children's brands; 'brick and mortar' presence in 1,488 st ores in 26 countries; unparalleled working relationships with all key toy and children's product vendors throughout the world; and a superior distribution and fulfillment infrastructure give us tremendous confidence that we have the winning formula. These elements, combined with the strategic initiatives we're announcing today, lay a solid foundation that should make toysrus.com the leading online retailer for toys and children's products."

Toysrus.com to Become Separate Subsidiary Located in Northern California; To further advance its Internet strategy, Toys "R" Us is establishing toysrus.com as a separate subsidiary. The subsidiary, which will be headquartered in Silicon Valley, CA, will encompass all Toys "R" Us Internet businesses, including Toys "R" Us, Babies "R" Us and Kids "R" Us. the existing Toys "R" Us e-commerce business will be largely relocated to California.

In addition, toysrus.com is in the process of completely rebuilding its website. The new site, which will be launched in the second quarter, will offer numerous customer-focused enhancements. Toys "R" Us believes these are critical steps in creating the right culture, platform and incentives to achieve the leadership status in e-commerce.

Partnership with Benchmark Capital

Simultaneous with the establishment of toysrus.com as a separate subsidiary, Benchmark Capital, a leading Silicon Valley venture capital firm, today announced that it is making a significant investment in toysrus.com. The four-year-old company, headquartered in Menlo Park, CA is best known for its investments in eBay, Critical Path, E-Loan, Ariba, Scient and Northpoint Communications.

Bruce Dunlevie, a founding partner of Benchmark Capital said, "We are extremely excited about our partnership with toysrus.com. This commitment represents the largest investment in the history of our firm, and underscores our confidence that the combination of 'brick and mortar' retailing and a strong e-commerce presence, fortified by Benchmark's expertise, represents a phenomenal investment opportunity."Fulfillment Center Acquisition

Lastly, Toys "R" Us announced the acquisition of a 500,000 square foot state-of-the-art, fully automated distribution center in Memphis, Tennessee, the geographic and overnight delivery "sweet spot" in the United States.

Toys "R" Us purchased the center, subject to certain regulatory approvals, from Secaucus, New Jersey-based PROTEAM.com, Inc.,(NASDAQ:PRTM), formerly Genesis Direct Catalog, for $30 million. The center is two years old and employs approximately 275 full- and part-time associates, growing to as many as 900 employees in the holiday selling season.

The distribution center, with its experienced fulfillment team, will enable toysrus.com to provide flexible, high-speed 'pick, pack and ship' direct to e-commerce customers. Capable of processing over $1 billion worth of orders annually, this distribution center provides a firm foundation for the company's online business and is an important part of Toys "R" Us' E-commerce growth strategy.

Summary

"We want to ensure that we are taking all the steps necessary to deliver superior service to our online customers," said Nakasone. "The aggressive plan we're announcing today comprises every component needed to create a premier e-commerce business. We've got the toysrus.com subsidiary in place. We've also got a strategic partnership with the best venture capital firm in the country, and now we've got a state-of-the-art fulfillment center to ensure that we can deliver orders accurately and in a timely ma ner. This is an exciting time for Toys "R" Us, and we're confident that these elements will help toysrus.com deliver exceptional value to our customers and shareholders."

Toys "R" Us, the worldwide authority on kids, families and fun, currently operates 1,488 stores: 703 toy stores in the United States; 455 international toy stores, including franchise stores; 212 Kids "R" Us children's clothing stores; and 118 Babies "R" Us stores. The company also sells merchandise through its Internet site at http://www.toysrus.com and through mail order catalogs.

Benchmark Capital was founded in 1995 with the mission of helping talented entrepreneurs build major technology enterprises focused on long-term growth. Benchmark takes a labor-intensive, team-oriented approach to venture investing in order to deliver a superior level of service to its portfolio companies. Benchmark's portfolio includes franchise companies such as Ariba Technologies, Critical Path (NASDAQ: CPTH), E-Loan, eBay (NASDAQ: EBAY), Genesys Telecommunications Labs(NASDAQ: GCTI), Northpoint Commu nications and Scient. Managing more than $400 million in committed venture capital, Benchmark focuses on early-stage investing in markets where the partners have directing relevant experience. These markets include consumer devices, eCommerce, application services, networking equipment, semiconductor, software, and telecommunications services. For more information on Benchmark, visit their Web site at www.benchmark.com.

This press release contains certain "forward looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. Such statements should be considered as subject to risks and uncertainties that exist in the company's operations and business environment that could render actual outcomes and results materially different than predicted. Factors that could constitute risks are set forth in documents filed by the company with the Securities and Exchange Commission.

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