Continued weak sales but improved inventory situation

• KappAhl’s net sales for the period amounted to SEK 1,193 (1,341) million, a decrease of 11 per cent.
• The operating profit was SEK 16 (146) million.
• The gross margin was 58.4 (63.4) per cent and the operating margin was 1.3 (10.9) per cent.
• Profit/loss after tax was SEK -11 (95) million, which is equivalent to SEK -0.15 (1.27) per share.
• Cash flow from operating activities was SEK 30 (157) million.
• A rights issue of SEK 600 million was completed during the quarter.

CEO’S COMMENTS ·

The trend in the fourth quarter has largely continued during the autumn. Customers have been cautious, which we can see not only from our own figures, but also from visitor statistics from many shopping centres, and in financial statistics. At the same time our weak performance continues in the market, mainly due to our women's range. It will take one or more quarters before the improvement in the range has an impact.
    It is worth noting that some of the measures taken are already having an effect. The cost savings can be seen clearly and we are starting to see positive changes in inventories. It is a well-known fact that reducing inventories is a difficult balancing act, in that for a period you have to buy in less than you sell. Renewal of the range may suffer and clearance goods compete with the new arrivals. This has had a negative effect on earnings during the quarter.
    Geographically we can note that the fast establishment rate in Poland and the Czech Republic is now clearly burdening earnings. As already communicated, expansion will be somewhat slower for some time to come.

JOHAN ÅBERG
President and Chief Executive Officer

A telephone conference will be held for analysts, media and investors today at 9.00 a.m. To participate, call +44 207 750 99 50. There will also be a direct webcast of the presentation available at www.kappahl.com/presentations, or www.financialhearings.com.

For further information, please contact:
Johan Åberg / President and CEO, tel. +46 704 71 55 22
Håkan Westin, CFO, tel. +46 704 71 56 64

For pictures and other information:
Annette Björklund / Head of public relations, tel. +46 704 71 55 42, annette.bjorklund@kappahl.com

KappAhl AB (publ) discloses the information provided here pursuant to the Securities Market Act and/or the Financial Instruments Trading Act. The information was submitted for publication at 07.30 a.m. on 21 December 2011.

KappAhl is a leading fashion chain with more than 380 stores and 4 900 employees in Sweden, Norway, Finland, Poland and the Czech Republic. KappAhl sells value-for-money fashion with a wide appeal – to women, men and children – and focuses in particular on women aged 30-50 with families. All clothes are from our own designers. In 1999 KappAhl was the first fashion chain to be environmentally certified. In the 2010/2011 financial year KappAhl's net sales were almost SEK 5 billion and operating profit SEK 222 million. KappAhl is listed on Nasdaq OMX Stockholm. More information can be found at www.kappahl.com.

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