-LTD)(RET RET.A) Reitmans (Canada) Limited Announces its Results for the Three Months Ended May 4, 1996.

MONTREAL--(BUSINESS WIRE)--June 26, 1996--REITMANS (CANADA) LTD (ME, TSE:RET RET.A) Reitmans (Canada) Limited Announces its Results for the Three Months Ended May 4, 1996.

Sales for the period amounted to $70,904,000 as compared with $65,849,000 last year. Net loss for the period amounted to $6,411,000 or 72 cents per share as compared with a net loss of $1,572,000 or 17 cents per share last year.

While consolidated sales increased 8 percent, the increase is attributable to the successful expansion of Penningtons Wearhouse and the acquisition of Dalmys as of March 2nd, 1996. Our core businesses however continue to suffer from weak consumer demand and the very promotional ladies wear retail environment in Canada, with comparable store sales declines of 4 percent in Reitmans and 16 percent in Smart Set which, when combined with reduced margins, produced larger than expected losses. I am pleased to report that the Penningtons Wearhouse business is strong and the newly acquired Dalmys businesses, despite the slow start up caused mainly by low inventory levels during the transfer of ownership, are progressing as anticipated.

As a result of significant technological upgrades being developed in the merchandising, administrative, and distribution functions, and the automation of our Distribution Centre's merchandise handling systems, the Company has instituted a voluntary severance and early retirement program for the employees affected by these changes. We estimate the cost of these programs to be approximately $1,200,000 and have provided for this amount in the first quarter results.

During the first quarter, the Company opened 5 stores and acquired 28 Dalmys, 37 Antels and 14 Cactus stores. Furthermore, the remaining 5 Studio Pennington stores were converted to Antels and 7 stores were closed. Accordingly, at May 4, 1996, there were 675 stores in operation, consisting of 378 Reitmans, 169 Smart Set, 44 Penningtons Wearhouse, 28 Dalmys, 42 Antels and 14 Cactus. An additional 18 stores are scheduled to open this year and 21 stores will be closed.

We continue to be pleased with our investment in Netstar Communications Inc. which recorded better than expected results at the end of its first fiscal period (April 30, 1996). At the Board of Directors meeting held June 26, 1996, a quarterly cash dividend of 13 cents per share on all outstanding Class A non-voting and Common shares of the Company was declared payable July 29, 1996 to shareholders of record as of the close of business July 15, 1996.

A statement of earnings is attached.

                 REITMANS (CANADA) LIMITED
                  and subsidiary companies
                          EARNINGS
                        (unaudited)
           (in thousands except per share amounts)

                                       FOR THE THREE MONTHS ENDED
                                           May 4     April 29
                                            1996         1995

Sales                                     $70,904      $65,849

Cost of goods sold and selling, general
 and administrative expenses exclusive
 of items shown hereunder                  79,306       68,146

Loss before items shown hereunder          (8,402)      (2,297)
Income from marketable securities and
 short-term deposits                        2,010        1,855
                                           (6,392)        (442)
Deduct:
  Depreciation and amortization             1,752        1,635
  Interest on long-term debt                  400            -
  Other interest                                4           19
                                            2,156        1,654
Loss before income taxes                   (8,548)      (2,096)

Income taxes (recovery)                    (2,137)        (524)

Net loss                                  $(6,411)     $(1,572)

Loss per share                             $(0.72)      $(0.17)

CONTACT: Reitmans (Canada) Limited

Jeremy H. Reitman, 514/384-1140