Stefanel : Board approves the consolidated results for 2013

STEFANEL BOARD APPROVES THE CONSOLIDATED RESULTS FOR 2013
DISTINCT IMPROVEMENT IN THIRD QUARTER WITH POSITIVE ADJUSTED EBITDA
Net revenues of 38.5 million euro (45.1 million in 2012) with a significant rationalisation of the store network
Gross operating profit improved as a percentage from 56% to 62% Adjusted EBITDA of 1.7 million euro (-1.6 mn euro in 4Q 2012)
Adjusted EBIT close to breakeven at -0.1 million euro (-3.3 mn euro in 4Q 2012)
4Q net profit of 3.2 million euro (+3.2 million in 4Q 2012, including a non-recurring gain of 12 million euro)
OPERATING LOSS REDUCED DRASTICALLY DURING THE YEAR Net sales of 168.5 million euro (186.6 mn in 2012)
Adjusted EBITDA of -6.5 million euro (-15.6 mn in 2012)
Adjusted EBIT of -14.8 million euro (-25.6 mn in 2012)
Net loss for the period of -23.8 million euro (-20.1 million in 2012, including a non-recurring gain of
12 million euro)
Cash absorption reduced to 7.7 million euro (32.1 mn in 2012)
PontediPiave,14March2014. The Board of Directors of Stefanel S.p.A. met today under the chairmanship of Giuseppe Stefanel and approved the draft separate and consolidated financial statements for 2013.

GiuseppeStefanel,ChairmanofStefanelS.p.A.,declared:"2013 was a breakthrough year for Stefanel: the first half was affected by the completion of an important corporate restructuring, whose positive effects were already evident in the third quarter, confirmed in the fourth and still visible today. We can therefore consider these initial results as an indication of a decisive turnaround, resulting not only in the fine-tuning of the corporate machine, but also of the business model. More design, a new product mix with more accessories, a streamlined structure with a new team and rationalization of the distribution network with targeted growth in certain strategic countries, are just some of the elements that we will continue to work on to repeat and improve on the results achieved so far."

GROUP PERFORMANCE

The fourth quarter of 2013 saw a marked improvement in performance compared with the fourth quarter of 2012, achieving a robust increase in the gross margin percentage and a significant reduction in fixed costs as a result of the steps taken by the Group to lower the breakeven point; this despite a decrease in net revenues from 45.1 million euro to 38.5 million euro (though with about 30 fewer shops, several of which were medium-large. Note that the 4Q 2012 was positively impacted by a gain of 12 million euro from a related party: if we then compare the gross and net operating profit only on the basis of recurring items, adjusted EBITDA in the 4Q 2013 was positive by 1.7 million euro, an improvement of 3.3 million euro compared with 4Q 2012, in the same way that adjusted EBIT came in close to breakeven at -0.1 million euro, an improvement of 3.2 million euro.

The following is an abridged comparative income statement for the fourth quarter:

(inthousandsofeuro)4Q 2013 % 4Q 2012 % Net sales 38,512 100.0% 45,051 100.0%

Gross operating profit 23,945 62.2% 25,075 55.7%

Adjusted EBITDA 1,744 4.5% (1,614) (3.6%) Adjusted EBIT (84) (0.2%) (3,294) (7.3%) Net profit (loss) for the period (3,172) (8.2%) 3,192 7.1%

Adjusted EBITDA does not include non-recurring income (charges), whereas adjusted EBIT does not include non-recurring income

(charges) and write-downs of non-current assets.

In 2013, the Group had consolidated net sales of Euro 168.5 million, compared with Euro 186.6 million in
2012.

(in thousands of euro) 20132012%change

Stefanel Business Unit 134,523150,999(10.9%)

Interfashion Business Unit 33,994 35,606 (4.5%)Totalnetsales168,517186,605(9.7%)

The directly operated monobrand stores (the so-called "Stefanel Shops")turned in a 5% decrease in sales on alike-for-like basis, but with an improvement in the second half of 2013 (-3% versus -8% in the first half). The rest of the decrease in revenues of the Stefanel Business Unit is due to the closure of stores that were not performing up to standard.
The sales by geographical area of the Stefanel Business Unit see an increase in the proportion of foreign markets, which now comes to 57% (54% in 2012).

(inmillionsofeuro)2013 2012 % change Italy 57.6 69.6 (17.2%) Rest of Europe 71.9 75.8 (5.2%)

Rest of the world 5.0 5.6 (10.7%)

Total net sales 134.5 151.0 (10.9%)

The geographical distribution of the Stefanel Business Unit's monobrand stores is as follows:

31.12.2013 31.12.2012

Stefanel Shops of which DOS Stefanel Shops of which DOS

Italy	156	64	179	65
Rest of Europe	208	105	219	122

Rest of the world 51 2 47 1

Total 415171445188

In 2013, 51 new points of sale were opened and 81 were closed, continuing the process of progressive rationalisation of the network.
The Interfashion Business Unit had sales of Euro 34 million with a decrease of 4.5% compared with last year, mainly due to the impact of crisis in the independent multi-brand distribution channel, above all in Italy.
Sales by geographical area of the Interfashion business unit have the following breakdown:

(in millions of euro) 20132012%change

Italy 8.6 10.0 (14.0%) Rest of Europe 23.2 23.2 0.0%

Rest of the world 2.2 2.4 (8.3%)Totalnetsales34.035.6(4.5%)

Foreign markets as a proportion of the Group's total consolidated revenues increased to 61% (from
57% in 2012).

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Consolidated adjusted EBIT is showing a significant improvement (Euro 10.8 million) on the previous year. This improvement was particularly strong in the fourth quarter, when Adjusted EBIT was close to breakeven (Euro -0.1 million), compared with Euro -3.3 million in the fourth quarter of 2012.
Taking the year as a whole, there was an improvement in selling, general and administrative expenses of Euro 13 million and lower advertising and promotion costs for € 5.5 million, at a time when there was a decrease in gross profit of Euro 9.4 million (caused entirely by the difference in sales volume, as there is a slight improvement in percentage terms). Lastly, depreciation and amortisation have gone down by Euro 1.6 million.
Net financial charges have increased by Euro 0.8 million, from Euro 3.6 million to Euro 4.4 million, mainly due to a higher average financial exposure and exchange differences during the period.
The result of assets held for sale and discontinued operations shows a positive balance of Euro 3.5 million, corresponding to the amount of the conditional earn-out on the sale of Hallhuber GmbH received during the period (see comments in the section "Significant events during the period").

GROUP'S FINANCIAL AND EQUITY STRUCTURE

The consolidated net financial indebtedness (NFI) comes to Euro 75.6 million (Euro 67.9 million at 31
December 2012). The Group has a short-term NFI of Euro 75.9 million1.
The NFI of Stefanel S.p.A. amounts to Euro 52.6 million (Euro 44.9 million at 31 December 2012). Short- term NFI comes to Euro 77.7 million.

SIGNIFICANT EVENTS DURING THE PERIOD

Under an agreement signed with Doll Beteiligungs GmbH (Germany), in February 2013 Stefanel GmbH received Euro 3.5 million as the advance definitive forfeit amount for the conditional earn-out on the sale of Hallhuber GmbH, a clothing retailer, which took place in 2009.
On 31 May 2013, the Company and the Trade Unions signed an agreement to regulate the management of redundant employees at the head office in Ponte di Piave (TV) with the help of welfare supports. These are 67 employees who were already redundant in prior years (saved by a solidarity contract that involved a reduction in working hours, but no longer renewable) and an additional surplus of 26 employees, most of them belonging to the internal production department that the Company decided to close. The agreement with the Trade Unions provides for the use of State Redundancy Benefits for as long as possible, followed by their dismissal and listing as employees who have been made redundant. These steps have been taken because of the need to reorganise the Company's head office functions in order to raise operational efficiency and effectiveness.
On 22 October 2013, the Company's Extraordinary Shareholders' Meeting adopted the resolutions envisaged in art. 2446 of the Italian Civil Code, covering the loss of Euro 18,326 thousand and losses carried forward of Euro 19,859 thousand, as shown in the Company's balance sheet at 30 June 2013, eliminating available reserves and reducing the par value of the share capital. The total par value has been reduced from Euro 55,180 thousand to Euro 26,994 thousand. This resolution took effect on 29
October 2013, when it was filed at the Companies Register.

AGREEMENTS WITH THE FINANCING BANKS

1 For the sole purpose of complying with the accounting standards, in the financial statements, the Directors have also classified as short-term the current portions of long-term loans, even though they expect to be able to maintain the ability to pay them in the longer term as part of the next debt restructuring agreement.

On 23 June 2011, the Company signed an agreement (the "New Agreement") with the financing banks (the "Banks") with a duration until 31 December 2015. This provided for a moratorium on repayments of the principal of medium/long-term loans up to 2014, with subsequent repayments up to 2017, as well as confirmation of the operational lines of credit up to 31 December 2013.
The covenants in the New Agreement, which had to be observed subject to a six-monthly review, were not met as of 30 June 2013, resulting in the loss of the benefit of the term on the existing medium/long- term loans and giving the Banks the right to revoke the lines of credit that fell due on 31 December 2013; this acts as a limit on the use of the funds that are available to the Group.
In view of the results expected in 2013, a new business plan called the "2013-2017 Business Plan and Budget" (hereinafter the "2013-2017 Plan") has been prepared with the support of a primary advisor and approved by the Board of Directors.
The 2013-2017 Plan was presented initially to the banks; in particular, the Company's management presented to the banks the market trends, the Company's situation, the actions already taken and still to be taken, the results expected from these actions and the consequent prospects. In the months that followed further meetings were held with the banks, at which documentation has been presented as support for the definition of a new agreement. In this sense, it is worth pointing out that pending the completion of the new plan, the banks did not withdraw their support for the Group, maintaining as normally available and operational the lines of credit that the Group is currently using, even for periods subsequent to 31 December 2013.
The Company's strategy reflected in the 2013-2017 Plan takes into account the specific features of the project to relaunch the Company, with particular reference to:
completion of the process of re-launching the Stefanel brand, mainly acting on the levers of product and communication by upgrading the design, rationalising expenditure on advertising and refurbishing the points of sale;
the increase in sales like-for-like which, compared with the growth forecasts for the "women's clothing" market made by independent sources for the geographical areas in which Stefanel sells the most, includes elements that are specific to the Company and to the brand such as, the market share held, the steps identified to relaunch the brand and the sales performance in recent years;
the development of the shop network (principally in monobrand franchising and independent multi- brand stores) with the aim of further rebalancing the mix of revenues in non-euro areas and containing investment needs, focusing on emerging geographical areas, particularly in the East, but already active for the Group from a distribution point of view;
the improvement in gross profit thanks to stronger sourcing and initial mark-up policies.
The assumptions of the 2013-2017 Plan include the main terms of the proposed new financial measures that provide for a rescheduling of the medium and long-term loans while maintaining the operational lines of credit over the period of the Plan.
If certain circumstances take place, the 2013-2017 Plan envisages further financial support from the reference shareholder, who in previous years helped to curb the situation of financial stress by injecting fresh funds and purchasing assets in support of the capital.
With reference to the covenants that are not met at 30 June 2013,during the discussions of the new budget with the banks, the Company also asked for a waiver to be issued at the time the new restructuring agreement is signed.
The Company has appointed a leading advisor to carry out an independent business review on the
2013-2017 Business Plan. The work was completed on 5 March 2014, without finding any significant critical elements regarding the outlook for 2014. The Company had also appointed an independent expert to certify the 2013-2017 Business Plan pursuant to art. 67 RD 267/42. This task was completed with the release of a draft certification on 13 March 2014.

The Company's lawyers and those of the Banks are currently drafting a text for the new debt restructuring agreement, which has been prepared on the basis of the 2013-2017 Business Plan.
Even though there has been a delay in the timetable for signing the new restructuring agreement, initial scheduled by the end of 2013, based on the above considerations, the Directors still expect to sign the agreement in the near future.

SUBSEQUENT EVENTS

No particularly significant events have taken place after the end of 2013.

OTHER INFORMATION

At 31 December 2013 the Group had renegotiated the due dates of overdue trade payables of Euro 15 million, extending them to later dates without any charge for penalties or default interest. The Group has not suffered particularly in terms of payment reminders, injunctions or suspended supplies.
There are no past due liabilities for loans, taxes, social contributions or payroll.
As regards related-party transactions, including those between Group companies, they could not be classified as abnormal or unusual as they form part of their normal course of business. Such transactions are settled on arm's-length terms, having regard for the characteristics of the goods and services provided. The principal economic and financial transactions between Group companies and related parties (excluding intercompany transactions, which have already been eliminated on consolidation) are summarised below.

(in thousands of Euro) 31.12.201331.12.2012

Purchase of intangible assets from related parties 5 276

Purchase of commercial equipment from related companies 1,051 2,319

Due from related parties for supplies made 901 707

Accounts receivable from related parties for disposal of stores 3,445 9,400

Due to related parties for supplies (958) (1,567)

(in thousands of Euro) 20132012

Income from recharges to related parties 69 50

Costs recharged by related parties (2,922) (1,757) Other financial income from related financial parties 36 36

Gain from sale of business 625 11,964

The consolidated financial statements at 31 December 2013 and the 2013 financial statements of Stefanel S.p.A. provide detailed information on the impact that related-party transactions or balances have on the Group's balance sheet, financial position and income statement.
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NOTICE OF CALLING OF THE ORDINARY SHAREHOLDERS' MEETING
We would like to announce that the Board of Directors today called an Ordinary Shareholders' Meeting on 29 April 2014, at 11:00 a.m., at the head office in Via Postumia 85, Ponte di Piave (TV), at first calling, and on 30 April 2014, same time and place, at second calling.
In addition to approving the financial statements for 2013, the Meeting will also be asked to vote on:

- theappointmentoftheBoardofDirectors;

- the first section of the Report on Remuneration pursuant to art.123-terof Legislative Decree 58/98.
To this end, the relevant Reports of the Board of Directors will be made available to shareholders as required by law.
With reference to the approval of the financial statements as of 31 December 2013, the Board of
Directors would like to propose to the Shareholders' Meeting to carry forward the loss of Euro
8,061,963.78 which is the difference between the loss for the year of Euro 26,387,984.24 and the portion of the loss already accrued at 30 June 2013, namely Euro 18,326,020.46; this portion has already been covered according to the resolution approved by the Extraordinary Shareholders' Meeting of 22 October
2013.
The notice of calling will be published on 18 March 2013 in MF, a financial daily, and on the Company's website www.stefanel.com ,in the Investors/Corporate Governance/Shareholders' Meetings section (in the area dedicated to the Shareholders' Meeting).
OTHER BOARD RESOLUTIONS
The Board of Directors has approved the "Report on Corporate Governance and Ownership Structure" prepared pursuant to art. 123-bisof the CFA. It will be made available to the public at the Company's head office and at the offices of Borsa Italiana S.p.A., and published on the website www.stefanel.comin the Investors/Corporate Governance section, as required by law.
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DECLARATION BY THE EXECUTIVE IN CHARGE OF PREPARING CORPORATE ACCOUNTING DOCUMENTS

Federico Girotto, the executive in charge of preparing corporate accounting documents, declares, pursuant to article 154-bis para. 2 of T.U.F., that the financial information contained in this press release agrees with the documentary records, books of account and accounting entries.

THE STEFANEL GROUP

The Stefanel Group, which operates through the Stefanel brand as one of the historical brand names of Italian fashion, is currently present nationally and internationally in the apparel sector through two business units: Stefanel and Interfashion. The Stefanel Business Unit looks after the production and international distribution - mainly to monobrand stores - of collections of Stefanel brand women's apparel and accessories, while the Interfashion Business Unit designs, handles production and distributes at international level items of female apparel under the HIGH brand (owned by the Group) as well as I'm Isola Marras (under licence).

DISCLAIMER

This document contains forward-looking statements with forecasts relating to future events and the operating, economic and financial results of the Stefanel Group. By their nature, such forecasts are subject to an element of risk and uncertainty, since they depend on the outcome of future events and developments. Actual results may differ significantly from those announced due to a multitude of factors.

ATTACHMENTS

• Consolidated income statement

• Reclassified consolidated balance sheet

• Reclassified consolidated cash flow statement

Note: the numbers relating to 2013 and 2012 have been prepared in accordance with IFRS and have been audited. The balance sheet and cash flow statement have been reclassified in accordance with a format that is normally used by management and by investors to evaluate the results of the Group. These reclassified statements do not comply with the standards of presentation requested by IFRS and should not be considered a substitute for them. However, since they disclose the same content, they are easily reconcilable to IFRS statements.

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The consolidated financial statements and the draft financial statements of Stefanel S.p.A. at 31
December 2013 will be available to the general public in compliance with the law, at the Company's head office, at the offices of Borsa Italiana S.p.A. and on the website www.stefanel.comin the Investors/Financial statements section.

STEFANEL S.p.A.

Investors/analysts: Stefanel Spa Federico Girotto Ph. [phone]

[e-mail]

www.stefanel.it

Media Relations:

Ad Hoc Communication Advisors

Ph. +39 02/7606741

Sara Balzarotti Mob. [phone] [e-mail]

CONSOLIDATED INCOME STATEMENT

(in thousands of euro) 2013%2012%

- Result of assets held for sale and discontinued operations 3,500 2.1% 700 0.4%

Net profit (loss) for the period (23,845) (14.2%) (20,083) (10.8%) Attributableto:

- Shareholders of the Parent Company	(23,957)	(14.2%)	(20,205)	(10.8%)
- Minority interests	112	0.1%	122	0.1%

* EBITDA is operating income plus amortisation, depreciation and writedowns of fixed assets, whereas EBIT is operating income

** Adjusted EBITDA does not include non-recurring income (charges), whereas adjusted EBIT does not include non-recurring income (charges) and write-downs of non-current assets.

RECLASSIFIED CONSOLIDATED BALANCE SHEET

(in thousands of euro) 31.12.201331.12.2012

Intangible assets 31,389 35,130

Property, plant and equipment 27,025 32,796

Other non-current assets, net 10,149 15,277

Employee termination indemnities, Provision for risks and charges (non-current portion) (6,964) (7,109) Non-current assets 61,599 76,094

Operating net working capital 27,448 24,497

Other net current assets (liabilities) 5,500 11,653

Invested capital 94,547 112,244

Shareholders' equity 18,977 44,309

Net financial position 75,570 67,935

Invested capital 94,547 112,244

RECLASSIFIED CONSOLIDATED CASH FLOW STATEMENT

(in thousands of euro) 20132012

Net profit (loss) (23,957) (20,205) Depreciation, amortisation and writedowns of non-current assets 11,659 13,454

Result of assets held for sale and discontinued operations (3,500) (700) Gains from the sale of assets (1,715) (13,386) Other non-monetary adjustments (452) (1,366)

(17,965) (22,203)Changeinoperatingnetworkingcapital(1,973)(15,003)Changeinotheroperatingassets/liabilities2,2751,411

Cashflowfromoperatingactivities(17,663) (35,795) Capital investments (2,724) (5,407) Sale value of the fixed assets sold 2,266 17,146

Increase in receivables from the sale of fixed assets 5,039 (10,515)

Disposals/(Purchases) of non-current financial assets 510 300

Net capital investments 5,091 1,524

Earn out from the sale of the investment in Hallhuber 3,500

Other changes on the sale of the investment in Noel International S.A. 3,000 3,000

Freecashflow(6,072) (31,271) Increases in capital 0 0

Other changes in shareholders' equity (1,563) (878)

Change in net financial position (7,635) (32,149)

Opening net financial position (67,935) (35,786) Closing net financial position (75,570) (67,935)