PFSweb Signs New, Large National Brand Name Client and Leases 435,000 Square-Foot Distribution Facility to Provide Product Fulfillment

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PFSweb Inc. (NASDAQ-PFSW) has signed a three-year contract to provide fulfillment services, inventory management, integrated reverse logistics and transportation management to a large, national Fortune 500, brand name consumer products client.

Plano, TX (August 30, 2004) –– PFSweb Inc. (NASDAQ: PFSW), a global provider of integrated business process outsourcing (BPO) solutions, announced today that it has signed a new three-year contract to provide fulfillment services for a Fortune 500 consumer products client. The company also announced that in order to meet the specific fulfillment requirements for this large contract, it has entered into a three-year lease for a 435,000 square-foot distribution facility in Southaven, MS, a short distance from its current approximately one million square-foot distribution hub in Memphis, TN.

“We are very excited about this new brand name client relationship,” said Mark Layton, senior partner and chief executive officer of PFSweb. “Services will include inventory management, fulfillment activities, integrated reverse logistics and transportation management. We have already begun the implementation process in order to meet the current timetable of providing services to this client by the first quarter of 2005.

“We continue to be pleased with the progress we are making in winning new business and with the expected positive impact these new contracts will have on our future financial results,” Layton emphasized.

PFSweb also has recently announced contracts with:

• Brillian Corporation (NASDAQ: BRLC) of Tempe, AZ, a pioneering developer of high-definition televisions, which is rolling out a new generation of rear-projection HDTVs.

• FLAVIA® Beverage Systems, a West Chester, PA-based supplier of beverage systems and gourmet coffee, tea and other hot beverages. FLAVIA is an affiliate company of Masterfoods USA, a Mars Incorporated company.

• Raytheon Aircraft Company to perform fulfillment services at the Raytheon Aircraft Parts Inventory & Distribution (RAPID) facility in Grapevine, TX for customers in the Western Hemisphere.

“We currently expect to employ approximately 100 persons on average at the new facility, expecting to bring our total workforce to nearly 800 employees,” Layton said. “In addition, to meet our obligations for this prominent client, we expect to incur capital expenditures of approximately $4 million to $5 million, which we intend to finance through leases or an incremental debt agreement,” he said. “Like our Memphis campus, the new facility will be a highly progressive distribution center utilizing state-of-the-art Siemens Dematic automated systems.”

Known as the “brand behind the brand,” PFSweb provides seamless, transparent, “best-in-class” supply-chain efficiencies and management for its Fortune 500 and Global 1000 clients. PFSweb currently warehouses, manages and fulfills more than $1 billion annually in merchandise and transactions from its distribution facilities in Memphis, Toronto and Liège, Belgium.

About PFSweb Inc.

PFSweb’s comprehensive outsourcing solutions provide proven, fast and secure business infrastructure to enable traditional and e-commerce strategies. PFSweb solutions include professional consulting services, e-marketplace logistics, order management, web-enabled customer contact centers, customer relationship management, international distribution and fulfillment services, reverse logistics, billing and collection services, kitting and assembly services and ERP information interfacing utilizing its Entente SuiteSM.

PFSweb develops and deploys integrated business infrastructure solutions and fulfillment services for Fortune 1000, Global 2000 and brand name companies, including third party logistics, call center support and e-commerce services. The company serves such notable clients as Brillian Corporation, CHiA’SSO, Dupont Fluoroproducts, Hewlett-Packard, IBM, NokiaUSA.com, Pfizer Inc., Raytheon Aircraft Company, Roots Canada, Shell Energy Services Company, Smithsonian Institution, Xerox and other brand name companies.

Safe Harbor Clause

The matters discussed in this news release, particularly information regarding future revenue, earnings, business plans and goals, consist of forward-looking information within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are subject to and involve risks and uncertainties, which could cause actual results to differ materially from the forward-looking information. Such statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. These statements are based on assumptions and estimates that management believes are reasonable based on currently available information; however, management’s assumptions and the Company’s future performance are both subject to a wide range of business risks and uncertainties, and there is no assurance that these goals and projections can or will be met. Any number of factors could cause actual results to differ materially. The Company undertakes no obligation to publicly update or revise any forward-looking statements. All forward-looking information contained herein is subject to the risk factors and uncertainties described in the Company’s filings with the Securities and Exchange Commission, which risk factors and uncertainties are incorporated by this reference as though fully set forth herein.

To find out more about PFSweb Inc. (NASDAQ: PFSW), visit our website at http://www.pfsweb.com

PFSweb is a registered trademark. Entente Suite is a service mark of PFSweb. All rights reserved.

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Preston F. Kirk, APR
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