Exhibit 99.2

NEWS ANNOUNCEMENT


FOR IMMEDIATE RELEASE

                       KG INVESTMENT PURCHASES 37 PERCENT
                         EQUITY STAKE IN TAG-IT PACIFIC

LOS ANGELES, CA - OCTOBER 27, 1998 - Tag-It Pacific, Inc. (AMEX:TAG), one of the
world's  leading  single-source  providers  of brand  identity  programs  to the
apparel and licensed  consumer  product  industries,  today provided details and
identified  the  investment  company  that  recently  completed  a $2.7  million
investment in Tag-It Pacific.

KG Investment,  LLC, a Los Angeles-based  private investment company,  purchased
2.39 million  restricted  shares of Tag-It Pacific Common Stock for an aggregate
price of $2,688,750.

KG  Investment is owned by Gerard Guez and Todd Kay.  Messrs.  Guez and Kay have
over 35 years of combined  experience  in the apparel  industry  where they have
developed  substantial  expertise in the private label casual apparel  business,
having  developed  strong  relationships  with many  specialty  retail  and mass
merchandise store chains.

Colin Dyne, Chief Executive Officer of Tag-It Pacific,  commented:  "We share KG
Investment's  enthusiasm for the potential of Tag-It's strategic growth plan. It
is gratifying to welcome industry leaders of their experience and accomplishment
as major long-term shareholders of the Company."

The investment amounts to an approximate 37% equity stake in Tag-It Pacific, and
the shares purchased by KG Investment,  LLC are restricted securities as defined
by Rule 144 under the Securities Act of 1933. KG Investment has also agreed that
it will not seek to dispose of its shares prior to October 16,  2000,  except to
certain affiliated parties,  without prior written consent of Tag-It Pacific. KG
Investment has also agreed to certain  additional  restrictions  on the transfer
and  voting  of  the  shares  it  purchased  and  has  been  granted   piggyback
registration rights.

Tag-It Pacific is a single-source  provider of complete brand identity  programs
to the fashion  driven  apparel,  private  label  apparel and licensed  consumer
product  industries.  The Company designs and produces high quality paper, metal
and injection  molded  boxes,  woven and leather  labels,  paper hanging and bar
coded tags,  metal jeans buttons and custom shopping bags.  Companies and brands
utilizing Tag-It designed and/or  manufactured  products include Guess?,  Calvin
Klein,  Tommy Hilfiger,  Sony Signatures,  Warner Bros. and Carol Little,  among
others.

This news release  contains  forward-looking  statements  and opinions of Tag-It
Pacific's  management.  Neither  Gerard Guez,  Todd Kay nor any of the companies
with which they are  affiliated  have any  contractual  obligation  to engage in
business with, or develop  business for,  Tag-It  Pacific.  All  forward-looking
statements and opinions are necessarily  speculative and readers are advised not
to place undue  reliance on any such  forward-looking  statements  or  opinions,
which speak only as of the date made.  Actual results could vary materially from
those anticipated for a variety of reasons,  including,  without limitation, the
risk factors set forth in the  Company's  quarterly  report on Form 10-Q for the
quarter  ended June 30, 1998,  which readers are advised to review in connection
with this news release.

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CONTACT:
David C. Collins
Jaffoni & Collins
212/835-8500, tag@jcir.com