Hosue of Pearl to acquire Simple Approach Limited - in Hong Kong
New Delhi, January 14, 2008

House of Pearl Fashions Limited (HOPFL) has signed a Memorandum of Understanding (MOU) to acquire 75% stake in the Hong Kong-based marketing company, Simple Approach Limited.

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. Simple Approach is supplying to value and mid market retailers in the UK and the USA and will be clocking revenues of Rs.80 crores in the current financial year, which are expected to grow to Rs.100 crores in the FY 2008-09 and projected to grow to Rs. 200 Crores by FY 2010-11.

This Company has an excellent customers base and very good design team. By leveraging HOPFL’s sourcing capabilities. it will be offer wider product ranges at very competitive prices and can easily achieve 25% annual growth in its business every year for next 3 years.

HOPFL is the only company in this sector with presence in more than 10 countries and controls complete supply chain from design & development to delivery to the customer’s doorsteps.

The Company is looking at entering fashion retailing in India with plans of launching a German Brand Lerros.

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.

HoPFL’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.