Warning: In Japan the business activity was stopped during the financial year 2007/08 and reclassified as discontinued activity. The pro-forma figures for the financial year 2006/07 are consistent with such reclassifications.

Business activity

Total sales amounted to 502.5 € mil. for the year ended. Excluding the part generated by the Japanese subsidiary, sales were down 3.8% compared to prior year (-1.9% at constant exchange rates). This drop is the result of contrasted evolutions by country and conceals a significant improvement in the fourth quarter (+4.3% at constant exchange rates).

France recorded a noticeable improvement in the last quarter (+6.6%) and thus ended the year with an increase (+1.9%)

International activities recovered also during the last quarter (+0.8% at constant exchange rates) nevertheless suffered a drop for the year (-7.7% at constant exchange rates). This decline is essentially due to the counter performance in Great Britain (-13.4% at constant exchange rates) itself due to disturbances originating from the logistics dysfunction and the successive strikes in the Postal Services.

Results

Excluding the Japanese subsidiary’s contribution, the current operating results amount to 5.5 € mil. for the year ended compared with an amount of 15 € mil. for the preceding year.

France results progressed significantly (14.0 vs. 12.0 € mil.) although promotional activities were intensified during the second half of the year in response to poor market conditions. This achievement is due to the strong performance in the first half year and the tight control over the main expense categories.

Conversely, International activities’ contribution dropped significantly (-8.5 vs. +3.0 € mil.). This drop is due largely to the deterioration in Great Britain (-7.7 vs. +2.5 € mil.) resulting from sales decline and increased costs caused by the Postal Services strikes and dysfunction in the logistics (order and delivery process disruption)

Thus the net result reflects a loss of 5.0 € mil. It includes both a significant amount of exceptional expenses and income (-4.1 € mil.) and a high level of income tax (-4.0 € mil.) due to the absence of fiscal offset between losses from International activities and profits from France.

The exceptional expenses are essentially the result of the loss incurred in Japan and the reorganisation costs from the manufacturing division in France and from the shop network in Great Britain (closure of the last points of sale).

Financial situation

At end June the net cash amounts to 6.8 € mil. and the net assets amount to 125.7 € mil.

General Management

The Supervisory Board appointed Patrick Seghin member and President of the Executive Board of Damartex effective this coming October 1st.

Patrick Seghin is well versed in the management of operational entities and international organisations. He brings to Damartex a long and rich experience in the distribution sector and a solid expertise in the management of brands and development of multi-channel activity (catalogues, internet, shops)

Perspectives

The return to profitability will be the priority of the next financial years. The recovery should already be significant starting this year due in particular to the discontinued activities in Japan and the return to a normal and streamlined situation in Great Britain.

Therefore, during the next Shareholders Meeting the Executive Board will propose the payment of a dividend of 0.55 € per share, equivalent to that of last year.

September 16, 2008

Profile
Damartex is one of Europe’s leading distributors of clothing and accessories for seniors. The company sells through catalogues (Home shopping) and shops with its main markets in France, Great Britain and Belgium.

Calendar
First quarter sales publication: October 24 2008

Contacts

Damartex: Jacques Taccoen – Tel: 03 20 11 45 30
Shan: François-Xavier Dupont – Tel: 01 44 50 58 74

http://www.damartex.com

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