Hemtex acquires three franchise stores

Hemtex AB is further strengthening its position through the acquisition of three stores that are currently operated within the framework of the Hemtex franchise system. The stores concerned are located in Kristianstad, Hässleholm and Mariestad.

The stores have annual sales of approximately SEK 26 million and are expected to make a positive contribution to the Hemtex Group’s profitability. Since Hemtex AB delivered most of the goods sold by these stores, the transaction’s effect on consolidated sales will amount to approximately only half of the stores’ sales. The purchase price for the stores totals SEK 11 million, which will be paid in cash. The stores’ net assets are valued at approximately SEK 4.8 million, which means that goodwill will amount to SEK 6.2 million. The acquisition of these stores is in line with our strategy, which is focused on growth through the establishment of new stores, the acquisition of franchise stores, the launch of new store formats and a broadening of the product range. We are interested in acquiring about 20 of the remaining franchise stores, which we wish to gradually take over,” says Hemtex President and Chief Executive Officer, Anders Jansson. The store in Hässleholm will be taken over as of April 1, 2006 while Hemtex AB will take over the stores in Kristianstad and Mariestad on May 1, 2006. For further information, contact: Tommy Svensson, CFO: +46 (0) 33-20 69 00, +46 (0) 702-10 80 69. Visit the Hemtex website at www.hemtex.se