Second quarter report for the fiscal period 2004/2005

First half 2004/2005 · Net sales amounted to SEK 453.0 M (454.1). Sales for comparable stores rose by 8.2 percent. · Operating profit amounted to SEK 32.7 M (28.4). Profit after net financial items improved by 22 percent to SEK 30.1 M (24.7). · Profit after tax amounted to SEK 21.5 M (15.6), corresponding to SEK 2.87 (2.08) per share. · Cash flow from operating activities amounted to SEK 25.9 M (72.3). After investments, cash flow amounted to SEK 20.6 M (70.0). · RNB has acquired C/O Departments & Stores Nordic AB (DSN), a company that operates cosmetics, lingerie and accessory stores at NK in Stockholm and Gothenburg. · The Board proposes a 2:1 share split.

Second quarter 2004/2005 · Net sales amounted to SEK 221.8 M (219.1). Sales for comparable stores rose by 7.8 percent. · Operating profit amounted to SEK 7.3 M (3.5). Profit after net financial items improved to SEK 6.0 M (1.9). · Profit after tax amounted to SEK 4.3 M (loss: 0.7), corresponding to SEK 0.57 (negative: 0.09) per share. · Cash flow from operating activities amounted to SEK 17.4 M (46.9). After investments, cash flow amounted to SEK 15.5 M (44.1). RNB Group RNB is organized into two separate business areas – Polarn O. Pyret and Portwear Retail. Polarn O. Pyret is a brand that focuses on baby and children’s wear. Portwear Retail is a platform for the distribution of national and international brands through stores within NK and for the Solo, Champagne and Saks retail store concepts. At February 28, 2005, the RNB Group had a total of 104 stores, of which 19 are operated by franchisees. Acquisition of DSN On March 1, 2005, RNB acquired C/O Departments & Stores Nordic AB (DSN). DSN is the leading retailer in Sweden within the quality segment for cosmetics, lingerie and accessories, with stores in NK in Stockholm and Gothenburg. Pro forma sales for the acquired operations for the most recent fiscal year amounted to SEK 254.3 M, with a profit of SEK 25.3 M before goodwill amortization. The acquisition is estimated to have positive synergy effects of at least SEK 10 M annually, with full effect during the fiscal year 2005/2006. It is expected that the acquisition will produce a positive effect on earnings per share during the current fiscal year. The purchase price for the acquisition comprises a SEK 80 M cash component plus the issue of 800,000 new RNB shares directed toward DSN’s current owners. The cash component was fully financed through new loans. Resolutions of the Extraordinary General Meeting At the Extraordinary General Meeting held on February 25, 2005, a decision was taken to issue 800,000 new to DSN’s former owners. After implementation of the issue, the number of shares in RNB amounts to 8,304,437. At the meeting, Göran Carlsson was also elected as a new Board member in RNB. Göran Carlson was previously the principal owner of DSN and has been involved in the retail industry for 14 years, specializing in cosmetics, lingerie and accessories. Board proposes 2:1 share split The Board of RNB has convened an extraordinary general meeting on April 20, 2005 to resolve on the proposal to implement a 2:1 share split. The proposal entails changing the nominal value of the RNB share from SEK 4 to SEK 2, with the result that one old share now becomes two new shares. RNB becomes established at Steen & Ström in Oslo Steen & Ström, Oslo’s leading fashion store, is currently undergoing the same type pf modernization and transformation process that was applied to NK at the beginning of the 1990s. In conjunction with this transformation, RNB will take over large segments of Steen & Ström’s ladieswear and menswear departments. In total, this relates to about 2,100 square meters of retail space, divided into some 15 separate stores. It is estimated that the ladies wear department will open during August and the menswear department during September 2005. Polarn O. Pyret has signed a purchasing cooperation agreement with New Wave During autumn 2004, major focus has been devoted to improving the entire purchasing process within Polarn O. Pyret. As part of this work, Polarn O. Pyret signed a strategic purchasing alliance with New Wave Group pertaining to purchasing in China. Taken as a whole, it is estimated that the measures currently in progress will have a significantly positive effect on earnings commencing in autumn 2005 and will have a full impact during the 2006/07 fiscal year. Market and demand Retail sales for Sweden’s ready-to-wear clothing sector in Sweden developed weakly during the second quarter and declined by 2 percent. However, the sales trend for RNB’s operations was favorable and sales for comparable stores rose during the second half of the year by 7.8 percent. Sales and earnings RNB’s net sales during the period declined somewhat to SEK 453.0 M (454.1). At the same time, the average number of own stores declined to 84 (92) as a result of the restructuring work conducted during fiscal 2003/04. Sales in comparable stores rose during the period by 8.2 percent. The gross profit margin for the period was 50.1 percent (51.3). A higher portion of discount sales compared with a year earlier resulted in a lower gross margin. Operating profit for the period totaled SEK 32.7 M (28.4). Profit after net financial items amounted to SEK 30.1 M (24.7). Profit after taxes was SEK 21.5 M (15.6). Second quarter RNB’s net sales during the second quarter amounted to SEK 221.8 M (219.1). The average number of stores was 84 (88). Sales in comparable stores during the quarter rose by 7.8 percent. Gross margin during the second quarter was 46.4 percent (47.2). Operating profit for the period amounted to SEK 7.3 M (3.5). Profit after net financial items amounted to SEK 6.0 M (1.9). Profit after taxes was SEK 4.3 M (loss: 0.7). Polarn O. Pyret Net sales for the period amounted to SEK 147.7 M (130.9). Operating profit amounted to SEK 19.4 M (13.7). At the end of the period, the number of proprietary stores in the business area was 37 (37), in addition there were 19 (18) franchise stores, of which 5 (3) outside Sweden. In March three additional franchise stores were opened in Norway and one franchise store in Tallinn, Estonia, and in April, a store was opened in Norway. Establishment of Polarn O. Pyret outside Sweden is proceeding as planned and during autumn 2005 a further number of stores is expected to be added. Portwear Retail Net sales for the period amounted to SEK 305.7 M (323.5). Operating profit amounted to SEK 21.9 M (17.8). At the end of the period, the number of own stores in the business area was 48 (47). The acquired company DSN will successively be integrated with the operations that Portwear conducts at NK in Stockholm and Gothenburg during the second half of the year. During autumn 2005, Portwear Retail will take over large segments of Steen & Ström’s ladieswear and menswear departments in Oslo, which will add approximately 15 stores to RNB. Financial position and liquidity At the end of the first quarter, the consolidated total assets amounted to SEK 327.5 M, compared with SEK 351.2 M at the end of the preceding fiscal year. Shareholders’ equity amounted to SEK 152.3 M (130.8), corresponding an equity/assets ratio of 46.5 percent (37.2). Inventory on February 28, 2005, amounted to SEK 134.0 M, compared with SEK 123.9 M at the same time in the preceding year. Cash flow from current operations amounted to SEK 25.9 M (72.3 M). Cash flow after investments amounted to SEK 20.6 M (70.0). Net debt declined to SEK 71.6 M, compared with SEK 92.1 M on August 31, 2004. Including unutilized overdraft facilities, the Group’s liquid funds amounted to SEK 31.7 M at the end of the period, compared with SEK 45.6 M at the end of the preceding fiscal year. Investment, depreciation and amortization Investments during the period amounted to SEK 5.4 M (4.0). Depreciation during the period totaled to SEK 12.7 M (13.0), of which goodwill amortization amounted to SEK 2.1 M (2.1). Personnel The average number of employees during the period amounted to 447 (497). Parent Company Net sales in the Parent Company during the period amounted to SEK 0 M (134.4). After net financial items, the Parent company reported a loss of SEK 6.2 M (12.1). Investments during the period totaled SEK 3.0 M (1.3). During the preceding fiscal year, Polarn O. Pyret’s operations were included in the Parent Company. Since September 1, 2004, Polarn O. Pyret is operated as a fully owned subsidiary of RNB. Future outlook Compared with the preceding fiscal year, the restructuring conducted within the Group will continue to generate positive effects on earnings during the current fiscal year. The acquisition of DSN is expected to yield positive effects on Group earnings during the last six months of the fiscal year. Taken as a whole, the outlook for the future is considered favorable and it is estimated that earnings for the current fiscal year will significantly exceed the level achieved for 2003/04. Future reporting dates Q3 interim report for 2004/05 June 23, 2005 Year-end report 2004/05 October 21, 2005 Stockholm, April 8, 2005 RNB RETAIL AND BRANDS AB Mikael Solberg President and CEO Questions regarding this report will be answered by: Mikael Solberg, President and CEO, telephone: +46 8 670 95 95, +46 708 18 44 40 Göran Blomberg, Chief Financial Officer, telephone. +46 8 670 95 99, +46 733 97 95 99