News Item

08.4.2008Baugur completes restructuring as a pure Retail investor and builds new investment pool

Baugur Group is delighted to announce the completion of the final phase of the restructuring of its portfolio of investments that positions the company as a pure retail investor. Following the Executive Board changes and the sale of the property portfolio last year, Baugur has now reached an agreement to sell its media, technology and financial investments to two new independent companies for £430m.

Gunnar S Sigurdsson, Baugur Group Chief Executive, said: “These changes place us exclusively in the retail space, where we have unrivalled experience. It builds our existing war-chest which will allow us to take advantage of investment opportunities which will arise in the current market conditions. We will also continue to build on the existing strengths of our brand portfolio which already is valued in excess of £1.5 billion and has significant global potential. The ability to drive value creation lies in enhancing their already formidable position in their home market as well as focusing on building their strengths in the key growth channels, such as the emerging markets and on the internet.”

The moves not only position Baugur as a pure retail investor, they also substantially rebalance Baugur’s geographical portfolio, with some 85 per cent of the group’s assets being in the UK, the US and Scandinavia following the transactions.

The media and telecoms assets will be acquired by Stodir Invest and the financial investments, such as Baugur´s stake in FL Group, by Styrkur Invest. Baugur Group will not be a shareholder in either company.

As a result of the restructuring, Thordis Sigurdardottir and Eirikur S. Johannsson are leaving the executive board of Baugur Group. Thordis was Managing Director of Baugur’s Media & Technology Division and will be CEO of Stodir Invest, while Eirikur was Managing Director of Investments and will be CEO of Styrkur Invest. At the same time, Andrew Lobb, Director of Legal and Operations at Baugur Group, is joining the executive board as Managing Director of Legal and Operations. Andrew is based in London.

Jon Asgeir Johannesson, Executive Chairman, said: “These changes mark the conclusion of events we set in train last year and will place Baugur in an exceptional position to further grow its unique retail portfolio. The current times are challenging and very exciting and with the quality of our portfolio of brands, we are in a great position to be at the forefront of developments on the worldwide retail scene.”

Last June, Baugur Group restructured its executive board and in December sold its property portfolio to FL Group.

For more information, please contact
UK
Fergus Wylie at Gavin Anderson on + 44 20 7554 1401

Iceland
Sara Lind at Baugur Group
+ 354 693 5505

Denmark
Soren Berzant at Cohn & Wolfe on
+ 45 3313 1320

Notes to editors

New Geographical split against old split:
New:
• 70.5% UK
• 13.9% Iceland
• 6.6% USA
• 8.4% Scandinavia
• 0.5% Other

Old:
• 43% UK
• 35% Iceland
• 7% USA
• 2% Germany
• 13% Scandinavia

Companies and investments being moved
Media & Technology:
• 365
• Teymi
• Humac
• 365 Media /Nyhedsavisen
• Hjálmur (DV, Birtingur, Skuggi)
• Saga Film & EFG
• Newsedge
• Several holdings in small companies

Investments:
• FL Group

Assets that remain within Baugur Group:
Fashion
• Mosaic Fashions
   o Karen Millen
   o Oasis
   o Warehouse
   o Shoe Studio Group
   o Principles
   o Coast
   o Odille
• Whistles
• Jane Norman
• MK One
• All Saints
• Day Birger et Mikkelsen
• Matthew Williamson
• Steinunn
• PPQ
• Scandinavian Design & Retail
• Arcticgroup

Food:
• Iceland
• Booker
• Julian Graves & Whittard of Chelsea
• Hagar
   o Bónus
   o Hagkaup
   o 10-11
   o Útilíf
   o Húsasmiðjan
   o SMS
   o Aðföng
   o Hýsing
   o Bananar
   o Ferskar Kjötvörur
   o Several franchises
• Woodward Foodservice

Department Stores
• House of Fraser
• Illum
• Magasin Du Nord
• Souk

Speciality:
• Aurum
   o Goldsmiths
   o Mappin & Webb
   o Watches of Switzerland
• Hamleys
• Wyevale Garden Centres
• eCommera

Listed Investments as of 4.4.08:

Held by Baugur Group :
• Saks - 8.58%
• Debenhams – 6.7%

Held by Unity Investments ehf (a company in which Baugur Group holds 37.5%)
• Debenhams – 6.8%
• Moss Brothers – 29.22%
• French Connection – 20.94%
• Woolworths 12.41%


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