Musicland Stores Corporation (NYSE:MLG), the nation's leading specialty retailer of home-entertainment products, today announced its participation with Pepsi-Cola Company's (NYSE:PEP) "PepsiStuff.com" promotion. More than 1.5 billion bottles of Pepsi product will promote Sam Goody during the program, which is a joint online effort between Pepsi and Yahoo!, a leading global Internet communications, commerce and media company.

"The program provides Musicland with an incredible marketing opportunity to promote our company and Web site on millions of Pepsi bottles and in turn potentially drive heavy traffic to the stores and SamGoody.com," said Stephanie Maki, director of partnership marketing and national promotions. "Pepsi is a strong brand name and we enjoy being affiliated with another brand leader. Pepsi has proven to be an effective marketing partner for us by consistently designing programs that drive traffic to our stores and web sites."

Players of the PepsiStuff.com "under the cap" game collect points with each winning game piece and have the opportunity to redeem those points at www.samgoody.com for free CD's or discounted online purchases. In addition, millions of winners will be invited to Sam Goody and On Cue stores to redeem "$2.00 off' offers via specially marked caps of Pepsi product.

"Young consumers are acutely aware that Sam Goody and SamGoody.com are two of the best places to meet their music and entertainment needs," said Dave Burwick, vice president, marketing, Pepsi-Cola Company. "PepsiStuff.com is geared toward teens and young adults and Sam Goody's merchandise and discounts help us keep the program relevant to them."

Based in Minneapolis, Musicland Stores Corporation is the leading specialty retailer of home-entertainment software products in the United States. As of June 30, 2000, the company operated 1,328 retail stores in 49 states, Puerto Rico and the Virgin Islands under the names Sam Goody, Suncoast Motion Picture Company, Media Play and On Cue. In addition to its four store formats, Musicland also operates four commercial Web sites including: SamGoody.com, Suncoast.com, MediaPlay.com and OnCue.com. For additional information on Musicland Stores Corporation, visit the company's Web site at http://www.musicland.com.

Pepsi-Cola Company, headquartered in Purchase, N.Y., is the global beverage division of PepsiCo, Inc. Its brands in the United States include Pepsi, Diet Pepsi, Pepsi ONE, Mountain Dew, Mug, Slice, Wild Cherry Pepsi, Aquafina, All Sport Body Quencher and FruitWorks. The company also makes and markets ready-to-drink iced teas and coffees, respectively, via joint ventures with Lipton and Starbucks.

Forward-looking statements in this news release may be impacted by certain important factors which could cause results to differ materially from those anticipated by the forward-looking statements. Such factors include the success of Musicland's strategic and marketing alliances, other risk factors inherent in the entertainment industry and other factors discussed from time to time in reports filed by Musicland with the Securities and Exchange Commission. Musicland does not undertake any obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise.