Interim Report May 1, 2008 – April 30, 2009

Operating loss of SEK 32.5 M

Fiscal year (May 1, 2008 – April 30, 2009) • Net sales amounted to SEK 1,390.6 M (1,608.3), down 13.5% on the preceding year. Sales in the Group’s comparable stores declined 20% (decrease: 4). • After tax, a loss of SEK 42.9 M (profit: 96.5) was reported. The loss per share was SEK 1.46 (earnings: 3.31) before dilution. • The Group established 14 new stores (20). Seven franchise stores were opened. • No dividend is proposed for the 2008/2009 fiscal year. Fourth quarter (February 1, 2009 – April 30, 2009) • Net sales amounted to SEK 272.4 M (324.2), down 16% on the year-earlier period. Sales in the Group’s comparable stores declined 26% (decrease: 5). • After tax, a loss of SEK 56.2 M (loss: 23.6) was reported. The loss per share was SEK 1.92 (loss: 0.80) before dilution. • The Group established three new stores (1). Three franchise stores were opened. • Rights issue of SEK 164 M was decided on extraordinary general meeting. CEO’S COMMENTS Sales for the fiscal year 2008/2009 declined by 13.5% and an after-tax loss of SEK 42.9M was reported. During the fourth quarter (February-April), sales fell by 16% and the operating result was a loss of SEK 60.1 M. One reason for the sharp decline is the economic recession, which has reduced the purchasing willingness of consumers. Another reason is Hemtex’s changed price strategy, which included significant sale periods that have now ceased. The gross profit margin increased during the fourth quarter to 49.8% (46.5) and for the entire fiscal year, the gross profit margin was 53.5% (52.7). Inventories at fiscal year year-end were significantly lower than a year earlier. The weak sales trend and result during the year places a demand for major adjustments within Hemtex, a task that has the highest priority for me and the rest of the management team. The short-term challenge is to turn around the receding sales. We have addressed this quickly through a higher degree of activation in stores using new and intensified offerings. In the autumn, we will also implement a series of comprehensive changes, the single most important of which will be a reduction in the Hemtex range by 40%. This will clarify our offering to the customer significantly. It is also a measure that will enable and drive more intense purchasing, simpler distribution, storage and store management. The reduction in the range and other measures are elements of the new business plan that we aim to complete during the month of August. Earlier during the year, a cost-saving and efficiency-enhancement program was implemented, which reduced costs in comparable stores by SEK 40 M. This savings program will also continue through 2009/2010, with a focus on purchasing, logistics and operation, as well as structure in the store operation. We have also launched a new price strategy, by which the standard prices of a large number of items were reduced, and we are reviewing the store structure with the aim of closing a number of unprofitable stores. In 2008/2009, it was decided to close five stores and about a further ten closures will be implemented during the current fiscal year. At the same time, we will capitalize on the recession and lower rent levels to expand in attractive locations. However, we do not see any net increase in the number of stores during the 2009/2010 fiscal year. In total, the reported measures will improve the operating margin to 13-15% within a three-year period. The recently completed rights issue, which contributed SEK 164 M to Hemtex, increases the freedom of action to implement the important adjustments required to regain good profitability within the company. Hemtex has a strong brand, strong retail networks and dedicated and skilled personnel. I am highly confident that, with the strong adjustment program that is now evolving, we will be able to recapture lost sales and profitability. Göran Ydstrand, President and Chief Executive Officer

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