Elmec Sport announces the completion of the negotiations with Nike European Operations Netherlands B.V. ("NEON") for the granting of the distributionship of NIKE branded products in Greece and Cyprus until May 31, 2006.

After that date, a NIKE-owned subsidiary will assume the wholesale distribution of NIKE products in Greece and Cyprus, while Elmec Sport will continue to develop its retail chain ''Exclusive Sports'' with NIKE products. As of today, the chain consists of about 36 stores and Elmec Sport projects their number to exceed 45 within the next 3 years.

Moreover, agreements for the exclusive distribution of NIKE products in Bulgaria and Romania have been concluded between Elmec Sport and NEON, with effect until May 31, 2007. Before the expiry date of these agreements, the parties will discuss about a possible renewal thereof.

As a result of NEON's forthcoming activities in Greece, the consolidated revenues of Elmec Sport are expected to decrease by Euro 50 million (a 40% of the 2004 consolidated revenues). Elmec Sport expects to fully offset this decrease in the future through the following activities, which will be fully operational within 2005:
a) The expansion of its retail chain, "Exclusive Sports'', in Greece, Bulgaria and Romania.
b) The growth of the wholesale turnover from NIKE products in Bulgaria and Romania.
c) The establishment of the largest state-of-the-art department store at the Athens center.
d) The operation of the second ''Factory Outlet'' store at the Athens' airport commercial center.
e) The creation of the most modern department store in the best downtown commercial area in Bucharest.
f) The exploitation of all the exclusive distribution agreements for apparel brands that Elmec carries in its portfolio, which Elmec Sport has concluded with third parties in Greece, Bulgaria and Romania.

The administration of the company is carefully planning the restructuring of its overhead expenses, so that the impact on 2006 and 2007 profits will be minimized.

Finally, the company is actively assessing new investment opportunities, which will be financed through the expected release of working capital funds.