Hemtex enters into franchise agreement in Poland

In the past few days, Hemtex has signed a letter of intent with a business partner in Poland as part of the company’s continued expansion. After the Baltic countries, Poland will be Hemtex’s second market outside the Nordic region. The objective is to establish two to three franchise stores in Poland in the forthcoming 2007/2008 fiscal year. The initial stores will be established primarily in major cities.

The background to the cooperation in Poland is the Board of Directors’ previous decision to seek business partners interested in franchise rights, as a complement to the establishment of new stores. Since the activity in Poland will be established in cooperation with a franchisee, expansion there can be effected rapidly, at a low capital investment and with a reduced risk.

“Expansion through the establishment of franchise stores in new markets is a key aspect of our growth strategy. In both new and existing markets, we believe that complementing our expansion of proprietary stores with stores operated by franchisees offers considerable opportunities. We regard the power derived from combining our strong concept with entrepreneurs with good knowledge of the local market as a significant key to successful establishments,” says Hemtex’s President and Chief Executive Officer, Anders Jansson.

With a population of nearly 40 million, Poland is a large market. The country has undergone a major economic transformation during recent years and the economy is growing rapidly. The retail trade has benefited from the consumer boom of the past few years. Today, several Swedish retail chains are established in Poland.

“Since we reserve the right to eventually open proprietary stores in the Polish market, the franchise rights granted for Poland, or other new markets, will be per store and not for entire regions,” adds Anders Jansson.

The planned franchise stores will be established in addition to the number of Hemtex stores previously communicated for the Nordic region and the Baltic countries.