STOCKMANN SELLS ITS SUBSIDIARY ENGAGED IN THE ZARA BUSINESS IN RUSSIA TO INDITEX AND FOCUSES ON THE

STOCKMANN plc STOCK EXCHANGE RELEASE January 31, 2006, at 15.30

STOCKMANN SELLS ITS SUBSIDIARY ENGAGED IN THE ZARA BUSINESS IN RUSSIA TO
INDITEX AND FOCUSES ON THE RAPID EXPANSION OF ITS OWN BUSINESS IN RUSSIA.
MOSCOW’S FOURTH STOCKMANN DEPARTMENT STORE TO IKEA’S MEGA III SHOPPING
CENTRE

Under an agreement signed today, January 31, 2006, Stockmann will sell the
entire shares outstanding in its subsidiary ZAO Stockmann-Krasnoselskaya,
which is engaged in the Zara business in Russia, to the owner of the Zara
brand, Inditex of Spain, and will focus on the rapid expansion of its own
business in Russia. The total purchase price is EUR 41.5 million. The
capital gain on the sale will improve the Stockmann Group’s earnings
significantly in 2006. Stockmann will continue the Zara business in
Finland. Under an agreement signed today as well, Stockmann will lease
premises for the fourth full-scale Stockmann department store in Moscow at
IKEA’s Mega III Shopping Centre, the construction works of which are in
progress in Southeast Moscow. The department store is estimated to be
completed around the turn of the year 2006-2007.

Stockmann and the Inditex Group of Spain signed an agreement in 2002, on
the basis of which Stockmann, under an arrangement extending until 2010,
received franchising rights to business operations under the Zara brand in
Russia. In rapid succession, Stockmann has opened Zara stores in Moscow,
and their operations have got off to a good start. This transaction
consists of six Zara stores, all in Moscow. Sales by Stockmann’s Zara
stores in Russia were about EUR 46 million in 2005. In step with strong
economic growth, the Russian market has become an increasingly interesting
environment for retailers. Accordingly, Inditex and Stockmann have reached
a joint understanding to terminate their previous contractual arrangements
and concentrate on expanding their own operations in Russia. Under an
agreement signed today, January 31, 2006, Inditex will purchase the entire
shares outstanding in ZAO Stockmann-Krasnoselskaya, which is engaged in
the Zara business in Russia, and will take over responsibility for the
Zara business in Russia such that the business will be carried on for the
account of Inditex from January 1, 2006. The final agreement, the coming
into force of which is contingent on approval by the Russian Anti-monopoly
Committee, is supposed to be made on May 31, 2006, at the latest.

The purchase price is about EUR 41.5 million including the company debt.
The capital gain on the sale will improve the Stockmann Group’s earnings
in 2006 significantly. The agreement does not have an effect on
Stockmann’s Zara franchising business in Finland, where the company
presently operates four stores.

Following this transaction, Stockmann has in Russia three department
stores, three speciality stores, seven Seppälä stores and four franchising
stores of the Danish Bestseller company. In future Stockmann will
concentrate on energetically expanding all these operations. Under the
agreement signed today Stockmann will lease premises at the IKEA-owned
Mega III Shopping Centre, the construction works on which are in progress
in Southeast Moscow, for the fourth full-scale Stockmann department store
in Moscow as well as retail space for a Seppälä store and a Bestseller
franchising chain store. The project is estimated to be completed and
opened for commercial use around the turn of the year 2006-2007. Taking
into account all the leased premises, Stockmann’s total investment in the
project is about EUR 16 million.

The largest individual project in the pipeline in Russia is for a
department store and shopping centre with about 50,000 square metres of
retail space in the heart of St Petersburg. It is scheduled for completion
in time for the Christmas market in 2008. Stockmann’s Hobby Hall
subsidiary, which is engaged in distance retailing, also intends to start
operations in the Russian market in 2007.

Further information:
Hannu Penttilä, CEO, Stockmann, tel. +358 9 121 5801
Heikki Väänänen, Vice Executive President, Stockmann, tel. +358 9 121 5230

STOCKMANN plc

Hannu Penttilä
CEO

DISTRIBUTION
Helsinki Stock Exchange
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