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Coordinated production based in Hong Kong will yield higher gross margin

RNB  is  continuing  its  Group-wide  program  of  change  and will be opening a
production  office in Hong Kong on  November 1, 2011. The office will coordinate
production  for the  Polarn O.  Pyret, Brothers  & Sisters  and JC subsidiaries,
supported  by satellite offices that  will be opened in  Shanghai and Dacca. The
coordinated  work method will have a positive  impact of two to three percentage
points on the gross margin.

The  newly opened production  office in Hong  Kong will employ approximately 20
individuals  to  coordinate  and  manage  all  production  issues  for the three
concepts:  Polarn O. Pyret, Brothers &  Sisters and JC. Ida Gullbrandson, former
Manager  for Kapp Ahl's purchasing office in  Turkey, will become the Manager of
RNB's   production   office.  The  efficiency  enhancement  resulting  from  the
coordinated  production  will  enable  RNB  to  achieve  the  following positive

·          increased significance among key suppliers and resulting economies of
scale entailing lower production costs.

·          better production  planning, which  will lead  to shorter lead times,
thus  ensuring high capacity and quality at  an earlier phase, while volumes are
fixed at a later phase.

·          a  higher  degree  of  procurement  flexibility,  which will generate
opportunities  to relocate  production in  Far Eastern  countries that offer the
best cost efficiency.

"We  are  delighted  with  the  recruitment  of  Ida Gullbrandson as Head of the
production  office  and  leader  of  our  team  in the Far East. Ida's extensive
experience  in purchasing, in China and  Turkey, represents an important part of
the  puzzle to ensure  efficient production in  RNB," says Anders Wiberg, Supply
Chain Director RNB.

The  purchasing departments for Polarn O. Pyret,  Brothers & Sisters and JC have
been  reorganized  and  joint  goods-supply  processes  have been established to
capitalize on the full potential of a central production office.

"The  higher costs that will result from establishing the production office will
be  fully offset by reduced  agent commissions. An experienced  team has been on
location  in the Far East during the summer months and has already initiated the
development  of new work processes. The total synergies achieved are expected to
have  a positive  impact of  about two  to three  percentage points on the gross
margin.  The  favorable  earnings  effect  will become visible initially already
during  the 2011/2012 fiscal year, with the full impact achieved in 2012/2013,"
says Magnus Håkansson, CEO of RNB.

The  production office in  Hong Kong will  be supported by  satellite offices in
Shanghai and Dacca, which will primarily function as the base for local quality-
control efforts.

"As  a step  in increasing  production in  Asia, RNB  has closed  its production
office  in  Turkey.  RNB  will  continue  to  work with local markets when rapid
repurchasing  and other  needs arise  during the  season but future efforts will
focus on a smaller number of suppliers and markets," says Anders Wiberg.

For more information, please contact:
Magnus Håkansson, CEO of RNB
Mobile telephone: +46 (0)768-872002

Coordinated production based in Hong Kong :

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Source: RNB Retail and Brands AB via Thomson Reuters ONE