STOCKMANN HONES ITS STRATEGY

STOCKMANN plc STOCK EXCHANGE RELEASE June 21, 2004, at 9.00

STOCKMANN HONES ITS STRATEGY

In its strategic review, the Stockmann Group’s Board of Directors
confirmed the company’s strategy. The objective is to grow profitably such
that by the end of 2008 about one-third of sales and at least as much of
the earnings will be generated in the Baltic and Russian markets.
Alternative means of developing Hobby Hall will be assessed during the
latter half of the year. One of the options is to divest the division.

In its strategic review, the Stockmann Group’s Board of Directors
confirmed the company’s strategy: the Group will seek vigorous growth,
particularly in the Russian market. The objective is that by the end of
2008 about one-third of sales and at least as much of the earnings will be
generated in the Baltic and Russian markets.

The spearhead of international growth comprises the department stores,
Seppälä and the enlargement of the franchising agreement-based Zara chain
in Russia. The company is assessing a new alternative for growing its
business operations: the expansion of franchising to include other
international brands that have, in various contexts, expressed an interest
in tapping into Stockmann’s knowledge of Russia.

A strong consolidation trend is ongoing in the European distance retailing
market. One of the elements of this trend is that many international
industrial players and capital investors in this field have shown interest
in the Stockmann Group’s Hobby Hall, the market leader in distance
retailing in Finland and the Baltic countries. Consequently, the Board of
Directors has decided to start up a process during the latter part of the
year in which the different alternatives for developing Hobby Hall will be
assessed. One of the options is to divest the division.

The operations of the Vehicle Division will be honed as part of Stockmann,
particularly with a view to harnessing its synergies with the department
store business, which arise from loyal customer marketing, and the
opportunities for expanding business operations that have been opened up
by the amendments to the EU’s Block Exemption Regulation.

Further information: Hannu Penttilä, CEO, tel. +358 9 121 5801.
Stockmann’s financial advisor concerning developing Hobby Hall is Aventum
Partners Ltd.

STOCKMANN plc

Hannu Penttilä
CEO

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