Germany -- Fashion retailer Charles Vögele Group managed to increase sales (after adjusting for currency movements) in 2008 despite difficult operating conditions. Profitability fell significantly, mainly because of low sales in the most important months. Turnover increased in all the company's new Eastern European markets. The number of stores rose 3% to 851.

Despite a proposal of a group of shareholders, the Board of Directors will unanimously ask the forthcoming Shareholders’ Meeting to re-elect all the present members of the Board. The forthcoming Shareholders' Meeting will be asked to approve a CHF 0.50 reduction in the par value of each share in lieu of a dividend.

Extraordinary operating conditions During the year under review, all of Charles Vögele Group's sales organizations were negatively influenced by a series of external factors that had a decisive influence not only on Charles Vögele but on the whole clothing trade. The first of these was the unseasonable weather that prompted low sales in the most important months; this affected sales figures, but had an even bigger impact on profits. The second was the general decline in consumer sentiment in the second half of 2008.

Sales after adjusting for currency above, earnings below previous year
Charles Vögele Group's nominal net sales fell during the year under review to CHF 1,369 million, a decline of 1.8% on the CHF 1,394 million posted in 2007. However, the overall clothing markets in its most important territories (Switzerland, Germany, Austria) contracted by 1%-4%, so Charles Vögele Group actually outperformed the market despite the slight decrease in its sales. Sales actually increased by 0,4% after adjusting for currency movements.

Statement by Bernd Bothe, Chairman of the Board of Directors
"Despite difficult operating conditions, the company made further progress during the year under review while focusing on the demands of the tougher competitive environment. The position we have established will allow us to increase productivity of existing space and to continue selectively with expansion plans in 2009, as well as to implement projects we have developed to sharpen up our positioning and ensure our long-term profitability."

The Board of Directors applies for re-election, despite the proposal of a group of shareholders
The Board of Directors will unanimously ask the forthcoming Shareholders’ Meeting to re-elect all the present members of the Board of Directors.

According to a request to put an item on the agenda submitted in due time on February 12, 2009, by a group of shareholders consisting of Laxey Partners (UK) Ltd., Cheyne Capital Management (UK) LLP, Sterling Strategic Value Ltd. and Massimo Pedrazzini, the group of shareholders supports the request of the Board of Directors.

Nevertheless, the Board of Directors will continue to sustain itsproposal for re-election of all present members of the Board of Directors in order to further develop the strategy supported by the whole Board of Directors under the lead of the current Chairman of the Board.

Without presenting a formal request to put an item on the agenda, the group of shareholders reserves their rights to propose for re-election further own candidates, which, however, they have not yet presented to the company. The Board of Directors will comment in due time any concrete proposals for election of the group of shareholders.

Operational outlook
Owing to the impact of the financial crisis on the clothing industry and the real economy as a whole, Charles Vögele Group has subjected its purchasing activities, costs and investments to a rigorous evaluation. In the third quarter of 2008 it also formulated a 5-point plan to fight the difficult market conditions as good as possible.

In addition, implementation of the brand identity and brand positioning targets, formulated as part of a "brand core analysis", will help to sharpen the company's profile as a preferred provider and to focus its business model even more tightly on core target groups.

Charles Vögele Group will focus on growth in the existing markets, and, regardless of current economic uncertainties, also selectively continue its expansion activities to seize opportunities. The main focus will be on Germany, Hungary, Poland and Slovenia.
 
Charles Vögele