The Board of Mosaic Fashions hf can confirm that, following receipt of a non-binding indicative offer from Baugur Group hf (“Baugur”) on behalf of Newco, a new company to be formed and owned by Baugur and certain investment partners, of ISK 17.5 per ordinary share, discussions are commencing between the parties relating to a potential cash offer for the whole of the issued share capital of Mosaic Fashions hf. The process remains at an early stage and there can be no certainty as to whether any formal offer will be forthcoming or the terms of any such offer, if made. The Board will make a further announcement when appropriate. This announcement has been made with the approval of Baugur. For further information on this announcement please contact Gavin Anderson (Fergus Wylie/Clotilde Gros +44 207 554 1400) Information on Mosaic Fashions hf is available on the company website at www.mosaic-fashions.is or www.mosaic-fashions.co.uk Mosaic Fashions hf is the parent company of eight successful design led fashion brands; Coast, Karen Millen, Oasis, Odille, Principles, Shoe Studio, Warehouse and Whistles. It operates 1853 stores and concessions, mainly in the UK and Ireland, but also in the rest of Europe and the USA. It has 172 franchise stores in 26 countries worldwide, and 52 department store concessions in China through a joint venture. The group employs over 13,000 employees. The company is listed on OMX.