SFG: Merger of Subsidiaries

Stock Exchange Release 	               			           16.09.2008 

Two subsidiaries of AS Silvano Fashion Group (“SFG”) operating primarily on the 
Russian retail market - ZAO Linret (“Linret”) and ZAO Stolichnaja Torgovaja     
Kompanija Milavitsa  (“STK”) have signed a merger agreement, as a result of     
which STK will be merged into Linret.  
                                         
The new entity will operate under the name of ZAO Milavitsa Linret and will     
combine the operations and resources of the two companies. ZAO Milavitsa Linret 
will be 49% owned by SFG directly and 51% by SP ZAO Milavitsa, a Belorussian    
subsidiary of SFG. The merger will be preceded by a sale of 51% of shares in    
Linret to STK.               
                                                   
The merger will contribute to the efficiency of SFG's Russian operations through
decreased administrative expenses and better coordination between the previously
independent sales structures. 
                                                  
Dmitry Ditchkovsky                                                              
Chairman of the Management Board                                                
AS Silvano Fashion Group                                                        
Ph +372 6 710 700