Cost Plus, Inc. Announces Planned Expansion of Distribution Facility

Oakland, CA – March 30, 2004 – Cost Plus, Inc. (NASDAQ-CPWM) and Virginia Governor Mark R. Warner jointly announced today the Company’s planned expansion of its 500,000 square foot Virginia distribution center to 1,000,000 square feet with the added capacity scheduled to come on line in fiscal 2005. The estimated cost to expand the facility is $24.0 million with an estimated $16 million expected to be spent in fiscal 2004 and the remaining $8 million scheduled to be spent in fiscal 2005. In connection with the expansion, the Company also reached an agreement to purchase the existing 500,000 square foot facility and land currently under lease for a purchase price of $26.5 million with the purchase expected to close in May 2004.

According to Murray Dashe, Chairman, CEO and President of the Company: “The productivity levels we are seeing in our Virginia facility combined with the promising sales growth we are experiencing in our Eastern U.S. stores caused us to accelerate our planned expansion. With the addition of this capacity, we will abandon less productive temporary space we lease elsewhere on a short-term basis. In addition, the purchase of the existing Virginia facility will give us greater control over our distribution activities and takes advantage of low interest rates available for financing. We estimate the purchase of the facility will lower our overall costs by approximately $0.03 per diluted share beginning with fiscal 2005. When the new capacity is brought online in 2005, we estimate its impact on the relationship of costs to sales will be neutral.”

According to Governor Warner: “I was pleased to personally meet with Cost Plus executives in California last summer and outline the reasons for a Virginia expansion. Today’s announcement further strengthens Isle of Wight County’s economy and job base while increasing business for the Port of Virginia.”

Finally, the Company has obtained a commitment from a major financial institution to finance up to 83% of the appraised value under a ten year fully-amortizing real estate loan. Interest on the loan for the purchase of the existing facility has been fixed at 4.82% per annum. The Company will initially finance the expansion under a revolving line of credit which will convert to a real estate loan upon completion of the project.

Cost Plus, Inc. is a leading specialty retailer of casual home living and entertaining products. As of March 30, 2004, the Company operated 212 stores in 26 states.

The above statements relating to planned construction costs, estimated purchase and completion dates, and anticipated cost savings are “forward-looking statements” which are based on current expectations and are subject to various risks and uncertainties that could cause actual results to differ materially from those forecasted. Such risks and uncertainties include the following: unanticipated cost overruns, delays in closing the purchase or completing construction of the new facility, higher construction costs than those estimated and unanticipated construction delays including unavailability of materials, strikes or other labor unrest and acts of God. Please refer to documents on file with the Securities and Exchange Commission for a more detailed discussion of the Company’s risk factors. The Company does not undertake any obligation to update its forward-looking statements.

Contact:
Murray Dashe
(510)893-7300

or

John Luttrell
(510)808-9119