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EXHIBIT 20.1

                                                               [GRAPHIC OMITTED]
FOR IMMEDIATE RELEASE

CONTACT:          Hanover Direct, Inc                        The MWW Group
                  Brian C. Harriss                           Rich Tauberman
                  E.V.P & Chief Financial Officer            Tel: (201) 507-9500
                  Tel: (201) 272-3224


    HANOVER DIRECT COMPLETES SALE OF IMPROVEMENTS BUSINESS FOR $33.4 MILLION

WEEHAWKEN, NJ, July 2,2001- Hanover Direct, Inc. (AMEX: HNV) today announced it
had completed the sale of certain assets and liabilities of the Improvements
business to HSN, a division of USA Networks, Inc.'s Interactive Group, for $33.4
million. Hanover's Keystone subsidiary will provide fulfillment services for the
Improvements business under a services agreement with the buyer for up to three
years.

 "This transaction marks an important milestone in Hanover's strategic
realignment and benefits our shareholders and further strengthens our balance
sheet and cash resources," stated Tom Shull, the Company's President and Chief
Executive Officer. "We wish Ken Ellingsen and his team all the best, knowing
that HSN brings to the business a powerful additional sales channel that will
further benefit the Improvements brand."


ABOUT HANOVER DIRECT, INC.
Hanover Direct, Inc. (AMEX: HNV) and its business units provide quality, branded
merchandise through a portfolio of catalogs and e-commerce platforms to
consumers, as well as a comprehensive range of Internet, e-commerce, and
fulfillment services to businesses. Hanover Brands, Inc. is comprised of the
Company's catalog and e-commerce web site portfolio of home fashions, apparel
and gift brands, including DOMESTICATIONS, THE COMPANY STORE, COMPANY KIDS,
ENCORE, SILHOUETTES, INTERNATIONAL MALE, UNDERGEAR, SCANDIA DOWN, and GUMP'S BY
MAIL. The Company owns GUMP'S, a retail store based in San Francisco. Each brand
can be accessed on the Internet individually by name. erizon, Inc. is comprised
of Keystone Internet Services, Inc. (www.keystoneinternet.com), the Company's
third party fulfillment operation, and also provides the logistical, IT and
fulfillment needs of the Hanover Brands, Inc. Information on Hanover Direct,
including each of its subsidiaries, can be accessed on the Internet at
www.hanoverdirect.com.


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