Zany Brainy goes it alone on its web site

Zany Brainy Inc., a retailer of educational toys, has ended its Internet joint venture with Online Retail Partners Inc. and will assume full ownership of its e-tailing site, www.ZanyBrainy.com. Zany Brainy will receive substantially all of the assets and has assumed all of the liabilities of the joint venture. To satisfy outstanding joint venture liabilities to Online Retail Partners and to pay Online Retail Partners for continuing web site services through February 3, 2001, Zany Brainy issued 1.25 million new shares of Zany Brainy common stock and a five-year warrant to purchase an additional 1 million shares at an exercise price of $6.00 and will pay Online Retail Partners $1 million. It is currently anticipated that Zany Brainy and Online Retail Partners will maintain a close working relationship, whereby Online Retail Partners will provide site hosting and maintenance services for www.ZanyBrainy.com. The company intends to combine ZanyBrainy.com with its catalog operations creating an integrated direct marketing subsidiary to be called Zany Brainy Direct. "In order to strengthen our ability to build lasting customer relationships and enhance our leadership position in the specialty toy market, we are building a new foundation for Zany Brainy. Gaining full control of our Internet operations and integrating it fully and cost effectively with our stores and the catalog is key to that process," said Thomas G. Vellios, president and acting CEO of Zany Brainy.