Arcadia Group PLC

Acquisition of Interest

ARCADIA GROUP PLC
26 July 1999

Daily   Mail  owners  acquire  50%  stake  in  Arcadia   Group's
Zoom.co.uk

Zoom.co.uk,  the e-commerce and free internet service  provider,
launched by Arcadia Group on June 14 1999, is from today jointly
owned  by  Arcadia  Group,  the  UK's  second  largest  clothing
retailer, and Associated Newspapers Ltd (ANL), publishers of The
Daily Mail and other leading newspapers.  ANL has acquired a 50%
stake  in  Zoom  for  a  total  consideration  of  £15  million,
comprising  £5  million in cash on completion  and  £10  million
payable  over  the  next  5 years. Zoom becomes  a  50/50  joint
venture   between  the  two  companies  as  a  result   of   the
transaction.

Zoom will benefit from the reach of both partners in the venture
as  both have agreed to use their existing businesses to promote
the ground-breaking internet access provider. Zoom was set up to
attract both existing and new users of the internet through  its
unrivalled  line-up of shopping, entertainment and communication
as  well  as its unique online loyalty scheme (Zoom Points)  and
online credit account for customers (Zoom Account).

Zoom already draws on a powerful network for distribution of its
discs  and  promotion  of its brand: over 2,100  outlets  and  a
database  of  5.3 million storecard holders from Arcadia  Group.
This   will  now  be  strengthened  by  the  addition  of  ANL's
newspapers and magazines, which can bring Zoom to the  attention
of a combined weekly readership of over 9 million.

Zoom's  marketing activities will be substantially  enhanced  as
part  of  this  joint  venture, as the  ISP  will  benefit  from
advertising,  promotions and editorial links  across  all  ANL's
leading titles such as The Daily Mail, Mail on Sunday, Metro and
Evening Standard.

All  of  the  ANL titles will adopt Zoom as their own e-commerce
and  free internet service provider with additional 'Zoom rooms'
added  to the site for their readers. Meanwhile, advertisers  in
ANL's titles will be encouraged to use Zoom's online media.

Zoom already features the Arcadia Group brands; TopShop, Dorothy
Perkins,  Evans,  Burton  Menswear,  Principles,  Racing  Green,
Hawkshead,  TopMan and Principles for Men, alongside many  other
retail  and service websites such as HMV, Littlewoods Index  and
Carphone  Warehouse.  Since  its launch  last  month,  Zoom  has
already doubled the level of traffic previously received by  the
Arcadia Group brand sites.

Zoom's potential audience is set to grow even further after  the
announcement  on 8 July of Arcadia Group's proposed  acquisition
of  the  Sears  Womenswear brands from January Investments  Ltd,
which will boost the number of outlets operated by Arcadia Group
to over 2,600. Arcadia Group has also announced its intention to
launch  online  shopping sites for Wallis,  Warehouse  and  Miss
Selfridge, all of which would appear on Zoom.

Arcadia  Group  is  well  positioned to  support  the  continued
development  of Zoom as part of its multi-channel strategy  with
its UK outlets, international stores, its home shopping presence
through the Group's DIAL joint venture with Littlewoods, as well
as  the internet business. Arcadia Group will continue to invest
in the training of 'zoomers', in-store staff who can advise Zoom
users, as well as providing access to its cardholder database.

John  Hoerner, Chief Executive of Arcadia Group, said:  'Arcadia
Group intends that Zoom will become one of the major players  in
the  e-commerce/ISP  market and be  the  portal  of  choice  for
consumers.  This partnership with Associated will  help  achieve
this  goal.  They  are the perfect partner in  helping  Zoom  to
maximise  its full potential, as they have the leading newspaper
titles in exactly the right market.'

Murdoch  MacLennan, Group Managing Director of  ANL,  said:  'We
have  watched the development of Zoom.co.uk with great interest.
ANL  believes that the future of the internet is about  commerce
as  well  as  information and Zoom is well-placed to deliver  on
both  of  these  promises. Zoom is a site with great  style  and
clarity and will have enormous appeal to our readers.'

The  Zoom  operating team will continue to be  led  by  chairman
Robin Klein and managing director Eva Pascoe. A management board
comprised  of management from each partner in the joint  venture
will be established to further develop the success of Zoom.

FOR FURTHER INFORMATION, PLEASE CONTACT:

Amanda Bassett [email protected]  0171 927 1875
Sandra Bull    [email protected]     0171 927 1877

NOTES TO EDITORS ON ZOOM.CO.UK

Zoom  was launched by Arcadia Group on 14 June 1999. The  launch
formed  the latest development in the Group's internet business.
It  also  forms a key part of the Group's multi-channel approach
to  retailing  through  its UK stores,  overseas  outlets,  home
shopping catalogues and internet business.

Arcadia  Group first developed an internet business three  years
ago  when it teamed up with Conde Nast to launch information and
entertainment-based  sites  for  all  its   brands.   This   was
consolidated  in  September 1997 with the launch  of  e-commerce
sites,  hand  in  hand with the introduction  of  home  shopping
catalogues  for  the Group's brands. At the  time  of  the  Zoom
launch,  the  internet business was expected to reach  sales  of
more than £1 million in the current financial year.

Zoom.co.uk  is a new generation e-commerce service provider  and
internet service provider that offers free, fast and easy to use
access  to  the  internet. Key to Zoom's success  has  been  its
strong  line-up  of  household  names  that  have  become   Zoom
partners. These partners have been divided into groups and  form
the  'Zoom rooms' that help customers navigate the site and find
the  product or service they are searching for. Partners include
HMV,  Littlewoods  Index,  Carlton Online,  Carphone  Warehouse,
Interflora and GE Capital.