Trading Statement

Quarto Group Inc
14 July 2000

                            
                 The Quarto Group, Inc.

                    Trading Statement


At  the  AGM  on 3rd May, the Board advised  shareholders
that,  despite overall improvements in operating margins,
we were not seeing the full benefit of the general upturn
in   European   economies.  Recent  market  comment   has
highlighted the continuing low level of the Euro  against
sterling and the US dollar.

Quarto's  co-edition  publishing  business  is  seasonal.
Typically,  around 70% of sales occurring in  the  second
half  of  the year. Sales trends and likely outcomes  for
the  Co-edition publishing units become clearer  at  this
time. As the main selling season draws to a close, it has
become  apparent to the Board that the difficult  trading
conditions  in the Euro zone will have an adverse  effect
on  Co-edition  Publishing  Division  revenues.  This  is
partly in response to recent currency alignments; it also
reflects a period of intense price-driven competition  in
these  markets. In 1999, European revenues accounted  for
approximately  one third of the total sales  of  the  co-
edition publishing imprints. With long lead times in book
creation,  it  is  not possible for us  to  make  up  the
shortfall   against  sales  budget.   This   is   despite
satisfactory trading in other markets.

Quarto does not now expect its pre-tax profit for 2000 to
exceed  the  profit  before  tax  and  exceptional  items
achieved in 1999.

The  Publishing Division, which derives the  majority  of
its  revenues from the US market, continues to  trade  in
line  with budget. Our strategy remains to focus  on  and
expand  the  quality  of  our  creative  output,  and  to
continue   our  programme  of  robust  margin  and   cost
management.  To  this end, we have recently  unified  our
specialist    publishing   businesses,    Rockport    and
RotoVision. A new initiative in expanding our sales  into
the  gift  and  stationery  markets,  with  exciting  new
projects targeted at teenagers and young adults, is being
launched later this year.

Laurence  Orbach,  Chief Executive of Quarto,  commented,
'We  have  made significant progress in implementing  our
strategy over the last 18 months.  It is very frustrating
to   have   to  advise  shareholders  of  this   setback,
especially  given the exceptional interplay  of  external
influences.  We  remain very positive about  the  overall
direction and future of the business.'


Notes for editors:

Quarto,   the   London  based  and  listed  international
publisher  of illustrated books in co-edition  and  under
its  own  imprints is issuing a trading  statement  as  a
result  of  the  adverse  effects  on  revenues  in   its
International Co-edition Publishing Division of difficult
trading conditions in the Euro zone.



Enquiries:

The Quarto Group, Inc.
  Terry Hancock (Chief Operating Officer)   020 7700 9015
[e-mail]

  Mick Mousley (Finance Director)           020 7700 9007
[e-mail]


Bankside Consultants Limited
  Charles Ponsonby                          020 7220 7477

www.quarto.com