House of Pearl to acquire FX Imports
New Delhi, December 6, 2007

House of Pearl Fashions Limited (HOPFL) has acquired 50% stake in the UK-based marketing company, FX Imports Limited, through its subsidiary in the UK - Poeticgem Ltd. HOPFL would get control of the board. The Company has been working at strengthening its distribution muscle in the overseas markets.

The acquisition will benefit the Company in expanding its customer base into high fashion mid market segment. FX Import will also gain by offering wider product range to its existing customers and can leverage HOPFL sourcing, designing and warehousing capabilities in UK, enabling them to offer value added services to its clients.

FX Imports Limited is a leading marketing Company in UK, catering to mid market fashion retailers. FX Imports clocked a revenue of Rs.80 crore last fiscal and is projected to touch an annual revenue figure of Rs.200 crore in three years. Marketing and distribution today accounts for 70% of the overall revenue of HOPFL. It reported a total income of Rs.952 crore for 2006-07.

The acquisition will be funded through internal accruals. HOPFL has the option to buy the rest 50% stake from the promoters of FX Import Limited, in the next five years.

“Poeticgem is well established in the value segment in the UK and with this acquisition has opened up opportunities to enter higher end of the market that offers better margins. There is great potential to optimize synergies of both companies which would help rapid growth of their business and improve profitability,” Mr. Deepak Seth, Chairman, HOPFL.

House of Pearl offers complete supply chain solutions to some of the top retailers internationally. It has its operations spread over 10 countries and tie-ups with over 150 compliant manufacturers. The Company also owns two apparel brands and warehouses in the US. HOPFL has its own manufacturing facilities spread over three countries and that has perhaps partially saved it from the effect of rupee appreciation. It managed a profit of close to Rs.29.36 crore in the first half of this fiscal, while many other exporters saw a decline in profit or loss.

HOPFL has recently tied-up with European marqee brand Lerros to set up retail chain in India. The Company has also been on the lookout to acquire retail and distribution firms in the US and Europe.

About House of Pearl Fashions Limited:
House of Pearl Fashions Limited is a multinational, ready-to-wear apparel company operating in three distinct business streams: manufacturing, marketing and distribution and sourcing of garments. HoPF operates nine modern ready-to-wear apparel manufacturing facilities, of which five are located in North India, one in South India, two in Bangladesh and one in Indonesia. It manufactures a broad range of products comprising of knits, woven, sweaters and bottoms in basic as well as complex designs. The Company has marketing and distribution offices in U.K, U.S. and Hong Kong, which oversee marketing and merchandising teams across Canada, Europe, Hong Kong, U.K. and U.S. that interact with customers at their locations. The Company also owns warehousing and processing units in U.K. and the U.S. HoPFL also has a sourcing business in Hong Kong with offices in China, Bangladesh and India. The Company has fabric development centers in China and India as well as design and product development teams in U.K., U.S., India and Hong Kong.

HoPF’s customers include value retailers, such as J C Penny, TESCO and ASDA Wal-Mart, as well as higher-end fashion brand retailers, such as GAP, Banana Republic, NEXT and Esprit.

With its distinct business model, the company offers multi-country, multi-gender and multi-product options in each business stream to its customers

Forward Looking Statement
Certain statements in this document may be forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties like regulatory changes, local political or economic developments, technological risks, and many other factors that could cause our actual results to differ materially from those contemplated by the relevant forward looking statements. House of Pearl Fashions Limited will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.