<PAGE>   1
 
                             LETTER OF TRANSMITTAL
                                   TO TENDER
            UNREGISTERED 10 1/8% SENIOR SUBORDINATED NOTES DUE 2008
                                       OF
 
                          HOME INTERIORS & GIFTS, INC.
       PURSUANT TO THE EXCHANGE OFFER AND PROSPECTUS DATED AUGUST  , 1998
 
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON SEPTEMBER  , 1998 (THE "EXPIRATION DATE"), UNLESS THE EXCHANGE OFFER IS
EXTENDED BY THE COMPANY.
 
                 THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
 
                    UNITED STATES TRUST COMPANY OF NEW YORK
 
                                  Deliver to:
            United States Trust Company of New York, Exchange Agent
 
<TABLE>
<S>                                            <C>
       By Registered or Certified Mail:                By Hand or Overnight Delivery
                                                             before 4:30 p.m.:
         United States Trust Company                    United States Trust Company
                 of New York                                    of New York
         P.O. Box 843, Cooper Station                           111 Broadway
           New York, New York 10276                       New York, New York 10006
        Attn: Corporate Trust Services                  Attn: Lower Level Corporate
                                                                Trust Window
 
                          By Facsimile (for Eligible Institutions):
                                       (212) 780-0592
                                 Attention: Customer Service
                                     For Information or
                                 Confirmation by Telephone:
                                       (212) 568-6565
   (Originals of all documents sent by facsimile should be sent promptly by registered or
                                        certified mail,
                          by hand or by overnight delivery service)
</TABLE>
 
     DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OR TRANSMISSION OF
INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A
VALID DELIVERY.
 
     IF YOU WISH TO EXCHANGE UNREGISTERED 10 1/8% SENIOR SUBORDINATED NOTES DUE
2008, FOR AN EQUAL AGGREGATE PRINCIPAL AMOUNT OF REGISTERED 10 1/8% SENIOR
SUBORDINATED NOTES DUE 2008, PURSUANT TO THE EXCHANGE OFFER, YOU MUST VALIDLY
TENDER (AND NOT WITHDRAW) OLD NOTES TO THE EXCHANGE AGENT PRIOR TO THE
EXPIRATION DATE.
 
                          SIGNATURES MUST BE PROVIDED.
 
     PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY BEFORE COMPLETING
                          THIS LETTER OF TRANSMITTAL.
<PAGE>   2
 
                       DESCRIPTION OF TENDERED OLD NOTES
 
<TABLE>
<S>                                                           <C>                  <C>
------------------------------------------------------------------------------------------------------
       NAME(S) AND ADDRESS(ES) OF REGISTERED OWNER(S)                                   AGGREGATE
 AS IT APPEARS ON THE 10 1/8% SENIOR SUBORDINATED NOTES DUE       CERTIFICATE       PRINCIPAL AMOUNT
                            2008                                   NUMBER(S)          OF OLD NOTES
                 (PLEASE FILL IN, IF BLANK)                      OF OLD NOTES           TENDERED
------------------------------------------------------------------------------------------------------
 
                                                              ------------------------------------
 
                                                              ------------------------------------
 
                                                              ------------------------------------
 
                                                              ------------------------------------
                                                                TOTAL PRINCIPAL
                                                                 AMOUNT OF OLD
                                                                NOTES TENDERED
------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>   3
 
LADIES AND GENTLEMEN:
 
     1. The undersigned hereby tenders to Home Interiors & Gifts, Inc., a Texas
corporation (the "Company"), the 10 1/8% Senior Subordinated Notes due 2008 (the
"Old Notes"), described above pursuant to the Company's offer of $1,000
principal amount of 10 1/8% Senior Subordinated Notes due 2008 (the "New
Notes"), in exchange for each $1,000 principal amount of the Old Notes, upon the
terms and subject to the conditions contained in the Prospectus dated August  ,
1998 (the "Prospectus"), receipt of which is hereby acknowledged, and in this
Letter of Transmittal (which together constitute the "Exchange Offer").
 
     2. The undersigned hereby represents and warrants that it has full
authority to tender the Old Notes described above. The undersigned will, upon
request, execute and deliver any additional documents deemed by the Company to
be necessary or desirable to complete the tender of Old Notes.
 
     3. The undersigned understands that the tender of the Old Notes pursuant to
all of the procedures set forth in the Prospectus will constitute an agreement
between the undersigned and the Company as to the terms and conditions set forth
in the Prospectus.
 
     4. Unless the box under the heading "Special Registration Instructions" is
checked, the undersigned hereby represents and warrants that:
 
          (i) the New Notes acquired pursuant to the Exchange Offer are being
     obtained in the ordinary course of business of the undersigned, whether or
     not the undersigned is the holder;
 
          (ii) neither the undersigned nor any such other person is engaging in
     or intends to engage in a distribution of such New Notes;
 
          (iii) neither the undersigned nor any such other person has an
     arrangement or understanding with any person to participate in the
     distribution of such New Notes; and
 
          (iv) neither the holder nor any such other person is an "affiliate,"
     as such term is defined under Rule 405 promulgated under the Securities Act
     of 1933, as amended (the "Securities Act"), of the Company.
 
     5. The undersigned may, if, and only if, unable to make all of the
representations and warranties contained in Item 4 above, elect to have its Old
Notes registered in the shelf registration described in the Registration Rights
Agreement, dated as of June 4, 1998, between the Company, the Guarantors and the
Initial Purchasers in the form filed as an exhibit to the Registration Statement
(the "Registration Agreement") (all terms used in this Item 5 with their initial
letters capitalized, unless otherwise defined herein, shall have the meanings
given them in the Registration Agreement). Such election may be made by checking
the box under "Special Registration Instructions" on page 5. By making such
election, the undersigned agrees, as a holder of Transfer Restricted Securities
participating in a shelf registration, to indemnify and hold harmless the
Company and the Guarantors, their directors, officers, representatives and
agents and each person, if any, who controls the Company or the Guarantors
within the meaning of either Section 15 of the Securities Act or Section 20(a)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), from
and against any and all losses, liabilities, claims, damages and expenses
whatsoever (including, without limitation, any legal or other expenses incurred
in connection with defending or investigating any matter), joint or several, or
any action in respect thereof, to which the Company or Guarantors, or any such
director, officer, representative, agent or controlling person may become
subject, under the Securities Act, the Exchange Act or otherwise, insofar as
such loss, liability, claim, damage or expense arises out of, or is based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Shelf Registration Statement or the Prospectus or in any
amendment thereof or supplement thereto or (ii) the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but only
to the extent, that any such loss, liability, claim, damage or expense arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with information relating to the undersigned furnished to the Company in writing
by or on behalf of the undersigned expressly for use therein. Any such
indemnification shall be governed by the terms and subject to
<PAGE>   4
 
the conditions set forth in the Registration Agreement, including, without
limitation, the provisions regarding notice, retention of counsel, contribution
and payment of expenses set forth therein. The above summary of the
indemnification provision of the Registration Agreement is not intended to be
exhaustive and is qualified in its entirety by reference to the Registration
Agreement.
 
     6. If the undersigned is not a broker-dealer, the undersigned represents
that it is not engaged in, and does not intend to engage in, a distribution of
New Notes. If the undersigned is a broker-dealer that will receive New Notes for
its own account in exchange for Old Notes that were acquired as a result of
market-making activities or other trading activities, it acknowledges that it
will deliver a prospectus in connection with any resale of such New Notes;
however, by so acknowledging and delivering a prospectus, the undersigned will
not be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. If the undersigned is a broker-dealer and Old Notes held for its
own account were not acquired as a result of market-making or other trading
activities, such Old Notes cannot be exchanged pursuant to the Exchange Offer.
 
     7. Any obligation of the undersigned hereunder shall be binding upon the
successors, assigns, executors, administrators, trustees in bankruptcy and legal
and personal representatives of the undersigned.
 
     8. Unless otherwise indicated herein under "Special Delivery Instructions,"
the certificates for the New Notes will be issued in the name of the
undersigned.
 
                         SPECIAL DELIVERY INSTRUCTIONS
                              (See Instruction 1)
 
     To be completed ONLY IF the New Notes are to be issued or sent to someone
other than the undersigned or to the undersigned at an address other than that
provided above.
 
     Mail [ ]     Issue [ ]     (check appropriate boxes) certificates to:
 
Name:
--------------------------------------------------------------------------------
                                 (PLEASE PRINT)
Address:
--------------------------------------------------------------------------------
                              (INCLUDING ZIP CODE)
 
--------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------
 
                       SPECIAL REGISTRATION INSTRUCTIONS
                                  (See Item 5)
 
     To be completed ONLY IF (i) the undersigned satisfies the conditions set
forth in Item 5 above, (ii) the undersigned elects to register its Old Notes in
the shelf registration described in the Registration Agreement, and (iii) the
undersigned agrees to indemnify certain entities and individuals as set forth in
the Registration Agreement and summarized in Item 5 above.
 
     [ ] By checking this box the undersigned hereby (i) represents that it is
unable to make all of the representations and warranties set forth in Item 4
above, (ii) elects to have its Old Notes registered pursuant to the shelf
registration described in the Registration Agreement, and (iii) agrees to
indemnify certain entities and individuals identified in, and to the extent
provided in, the Registration Agreement and summarized in Item 5 above.
<PAGE>   5
 
                       SPECIAL BROKER-DEALER INSTRUCTIONS
                                  (See Item 6)
 
     [ ] Check here if you are a broker-dealer and wish to receive 10 additional
copies of the Prospectus and 10 copies of any amendments or supplements thereto.
 
<TABLE>
<S>       <C>
Name:
          ------------------------------------------------------------
                                 (PLEASE PRINT)
Address:
          ------------------------------------------------------------
          ------------------------------------------------------------
          ------------------------------------------------------------
                              (INCLUDING ZIP CODE)
</TABLE>
<PAGE>   6
 
                                   SIGNATURE
 
     To be completed by all exchanging noteholders. Must be signed by registered
holder exactly as name appears on Old Notes. If signature is by trustee,
executor, administrator, guardian, attorney-in-fact, officer of a corporation or
other person acting in a fiduciary or representative capacity, please set forth
full title. See Instruction 3.
 
X
--------------------------------------------------------------------------------
X
--------------------------------------------------------------------------------
          SIGNATURE(S) OF REGISTERED HOLDER(S) OR AUTHORIZED SIGNATURE
Dated:
--------------------------------------------------------------------------------
Name(s):
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                             (PLEASE TYPE OR PRINT)
Capacity:
--------------------------------------------------------------------------------
Address:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                              (INCLUDING ZIP CODE)
Area Code and Telephone No.:
-------------------------------------------------------------------------
 
               SIGNATURE GUARANTEE (IF REQUIRED BY INSTRUCTION 1)
 
        Certain Signatures Must be Guaranteed by an Eligible Institution
 
--------------------------------------------------------------------------------
             (NAME OF ELIGIBLE INSTITUTION GUARANTEEING SIGNATURES)
 
--------------------------------------------------------------------------------
  (ADDRESS (INCLUDING ZIP CODE) AND TELEPHONE NUMBER (INCLUDING AREA CODE) OF
                                     FIRM)
 
--------------------------------------------------------------------------------
                             (AUTHORIZED SIGNATURE)
 
--------------------------------------------------------------------------------
                                 (PRINTED NAME)
 
--------------------------------------------------------------------------------
                                    (TITLE)
Dated:
--------------------------------------------------------------------------------
 
                      PLEASE READ THE INSTRUCTIONS BELOW,
                WHICH FORM A PART OF THIS LETTER OF TRANSMITTAL.
<PAGE>   7
 
                                  INSTRUCTIONS
 
     1. GUARANTEE OF SIGNATURES. Signatures on this Letter of Transmittal must
be guaranteed by an eligible guarantor institution that is a member of or
participant in the Securities Transfer Agents Medallion Program, the New York
Stock Exchange Medallion Signature Program or by an "eligible guarantor
institution" within the meaning of Rule 17Ad-15 promulgated under the Exchange
Act (an "Eligible Institution") unless the box entitled "Special Registration
Instructions" or "Special Delivery Instructions" above has not been completed or
the Old Notes described above are tendered for the account of an Eligible
Institution.
 
     2. DELIVERY OF LETTER OF TRANSMITTAL AND OLD NOTES. The Old Notes, together
with a properly completed and duly executed Letter of Transmittal (or copy
thereof), should be mailed or delivered to the Exchange Agent at the address set
forth above.
 
     THE METHOD OF DELIVERY OF OLD NOTES AND THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF
THE HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN
OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO
LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO THE COMPANY. HOLDERS MAY
REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES, OR
NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS.
 
     3. SIGNATURE ON LETTER OF TRANSMITTAL, BOND POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by a person other than a registered holder
of any Old Notes, such Old Notes must be endorsed or accompanied by appropriate
bond powers, signed by such registered holder exactly as such registered
holder's name appears on such Old Notes.
 
     If this Letter of Transmittal or any Old Notes or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations, or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and, unless waived by the Company,
proper evidence satisfactory to the Company of their authority to so act must be
submitted with this Letter of Transmittal.
 
     4. MISCELLANEOUS. All questions as to the validity, form, eligibility
(including time of receipt), acceptance, and withdrawal of tendered Old Notes
will be determined by the Company in its sole discretion, which determination
will be final and binding on all parties. The Company reserves the absolute
right to reject any or all Old Notes not properly tendered or any Old Notes the
Company's acceptance of which would, in the opinion of counsel for the Company,
be unlawful. The Company also reserves the right to waive any defects,
irregularities, or conditions of tender as to particular Old Notes. The
Company's interpretation of the terms and conditions of the Exchange Offer
(including the instructions in this Letter of Transmittal) will be final and
binding. Unless waived, any defects or irregularities in connection with tenders
of Old Notes must be cured within such time as the Company shall determine.
Neither the Company, the Exchange Agent, nor any other person shall be under any
duty to give notification of defects in such tenders or shall incur any
liability for failure to give such notification. Tenders of Old Notes will not
be deemed to have been made until such defects or irregularities have been cured
or waived. Any Old Notes received by the Exchange Agent that are not properly
tendered and as to which the defects or irregularities have not been cured or
waived will be returned by the Exchange Agent to the tendering holder thereof as
soon as practicable following the Expiration Date.