KappAhl: Significant increase in sales and new dividend policy

Third Quarter (March - May 2007)

  * KappAhl's net sales for the period amounted to MSEK 1,106
    (1,029), an increase of 7.5 percent.
  * Operating profit amounted to MSEK 132 (120), an increase of 10.0
    percent. This has been positively affected by non-recurring items
    of MSEK 3.
  * The gross margin was 62.3 (61.9) percent and the operating margin
    was
    11.9 (11.7) percent.
  * Profit after taxes amounted to MSEK 79 (73), which is equivalent
    to SEK 1.05
    (0.97) per share.
  * Cash flow from continuing operations totalled MSEK 136 (83).


CEO comments on KappAhl's third quarter results

We have now experienced yet another quarter affirming KappAhl's
position as leading Nordic fashion chain.

Sales increased in comparable stores by 6 percent and, in total, by
7.5 percent during the quarter. One contributing factor to these
strong sales has been our investment in marketing our fashions, among
other things through various campaigns focused around the concept"You look great!" This will continue in the autumn, as yet another
very well-known person will be featured in advertising films for
KappAhl.

After a decline in the number of new stores opened in the spring, we
are now starting to pick up the pace. From now on, our aim is to
increase the total number of stores by 20-25 per year. This strategy
also includes starting to plan for the opening of stores in one
further country.

It is also pleasing to be able to report that KappAhl's financial
position is so stable that the Board of Directors has decided that
the Company will increase the dividend goal to 70-100 percent of the
profit after paid taxes, starting with this financial year.

Christian W. Jansson
President and CEO

For further information, please contact
Christian W. Jansson, President and CEO                   Tel. +46
(0)70 995 02 01
Håkan Westin, CFO
Tel. +46 (0)70 471 56 64

KappAhl Holding AB (publ)
Box 303, 431 24 Mölndal

KappAhl is a leading Nordic fashion chain with approximately 270
stores in Sweden, Norway, Finland and Poland. We design, market and
sell clothes for the entire family, but focus in particular on women
between 30 and 50 years of age, shopping for the whole family.
KappAhl's head office and distribution centre, which handles the
distribution of goods to all stores, is located in Mölndal, just
outside Gothenburg. KappAhl employs approximately 3,700 individuals,
more than 90 percent of whom are women. During the financial year
2005/2006, KappAhl had sales of SEK 4.2 billion, with an operating
profit of MSEK 530. KappAhl shares are listed on the Stockholm Stock
Exchange. Further information about the company is available on
www.kappahl.com and financial information is available on
www.kappahl.com/ir.

The full report with tables can be downloaded from the following
link: