Market announcement

Title

Restructuration of the Group and establishment of subsidiaries

Message

With  the  aim  of  reorganising  the  structure  of  the  companies of Tallinna
Kaubamaja  Grupp, splitting up retail sale  and wholesale of beauty products and
footwear into separate companies, and developing financial services that support
retail  trade,  the  Group's  subsidiaries  will  be  restructured and three new
subsidiaries will be established as set out below.

Merger of Selver AS and ABC Supermarkets AS

In order to harmonise the management function and increase synergies, a plan has
been  put in place to integrate the activity of the Group's supermarkets through
a  merger whereby ABC Supermarkets AS  (the company being acquired), which fully
belongs  to Selver AS (the  acquiring company), will be  acquired by the latter.
Selver  AS,  a  subsidiary  of  Tallinna  Kaubamaja  Grupp  AS,  is  a  chain of
supermarkets and hypermarkets operating in Estonia that primarily sells food and
staple goods. The Selver chain, which has been operating since 1995, consists of
54 stores,  of which 22 are located in different districts of Tallinn, and an e-
store with the largest servicing area in Estonia. As a result of the purchase of
shares  of  ABC  Supermarkets  AS  on  29 May  2020, the  chain acquired sixteen
Comarket stores in Harju County, Pärnu County, and Tartu County, two Delice food
stores in Viimsi and Pärnu, and the Solaris Food Store.

After  the merger  has been  entered into  the commercial  register, the sixteen
Comarket  stores will be gradually brought under the Selver trademark by the end
of  2020. The Solaris Food Store will continue to operate under the Solaris Food
Store  trademark and the two stores in Viimsi and Pärnu doing business under the
Delice trademark will retain the Delice trademark.

Kristi  Lomp, current member of the management  board, will continue as a member
of  the management  board of  Selver AS.  Andrus Põld,  a current  member of the
management  board of  ABC Supermarkets  AS, will  become the manager of Selver's
small  formats. The supervisory board will  continue with members Andres Järving
(Chairman), Jüri Käo, Enn Kunila, and Raul Puusepp.

Separating retail sale and wholesale of cosmetics

The  strategic  objective  of  the  Group  is  the  continued development of the
wholesale function along with retail trade and the expansion of the selection of
imported  trademarks. The main field of activity  of OÜ TKM Beauty, a subsidiary
which  is solely owned  by Tallinna Kaubamaja  Grupp AS, is  the retail sale and
wholesale  of cosmetics products in  two L'Occitane stores. OÜ  TKM Beauty has a
subsidiary,  OÜ  TKM  Beauty  Eesti,  which  is  involved in the retail trade of
cosmetics  products  in  Estonia  and  manages  the I.L.U. store chain of beauty
products.  Currently, three stores operate in  Tallinn (Rocca al Mare, Ülemiste,
Kristiine), one in Tartu (Lõunakeskus), and one in Pärnu (Pärnu Keskus).

In order to separate the operations of OÜ TKM Beauty Eesti, which is involved in
the retail trade of cosmetics, from the cosmetics wholesale function, a division
will  be undertaken.  In the  course of  the division  of OÜ TKM Beauty (company
being  divided), OÜ TKM Beauty Holding, a company with a share capital of 2,500
euros and 100% ownership by Tallinna Kaubamaja Grupp AS, will be established. OÜ
TKM  Beauty will  transfer the  share of  OÜ TKM  Beauty Eesti  to OÜ TKM Beauty
Holding   (recipient  company).  Anne-Liis  Ostov,  who  currently  manages  the
operations  of I.L.U., will  become a member  of the management  board of OÜ TKM
Beauty  Holding. The further plan  is to merge OÜ  TKM Beauty Holding and OÜ TKM
Beauty  Eesti so that OÜ TKM Beauty Eesti will directly become a 100% subsidiary
of  Tallinna Kaubamaja  Grupp AS.  Anne-Liis Ostov  does not  hold any shares of
Tallinna Kaubamaja Grupp AS.

Separating footwear retail sale and wholesale

Another  division of subsidiaries will  take place in the  Group with the aim of
separating  retail sale and wholesale functions of footwear, wherein TKM King AS
(company  being divided) will transfer part  of its assets to TKM Hulgikaubandus
OÜ  (recipient  company),  a  company  to  be  established  in the course of the
division.  The objective of the activity of  TKM Hulgikaubandus OÜ is the import
of  footwear and  other industrial  goods for  the retail  companies of Tallinna
Kaubamaja Grupp. Tallinna Kaubamaja Grupp AS will be the sole shareholder of TKM
Hulgikaubandus  OÜ  and  the  share  capital  of the new company is 2,500 euros.
Kristi  Lomp, who will continue as a member of the management board of Selver AS
as  well, will be a member of the  management board of TKM Hulgikaubandus OÜ and
she does not hold any shares of Tallinna Kaubamaja Grupp AS.

Establishment of subsidiary TKM Finants AS

We  aim to  provide our  customers more  convenient purchases and have therefore
decided to develop financial services that support our retail business. Tallinna
Kaubamaja Grupp AS is applying for an authorisation of a creditor to develop the
financial  service  line  of  business  and  is  establishing  TKM Finants AS, a
subsidiary  with a  share capital  of 50,000 euros  belonging completely  to the
Group.  According  to  the  developed  plan,  after  the  Financial  Supervision
Authority  has issued the  relevant authorisation, TKM  Finants AS will commence
with  granting credit to private  persons, the postponement of  a due date for a
charge,  including  the  entry  into  credit  agreements and performance of acts
needed  for this purpose in its  own name and on its  own account. Member of the
management  board of TKM Finants AS will be Marit Vooremäe, who has been working
as the financial director of Tallinna Kaubamaja Grupp AS since 2008 and who will
continue  in  this  position  after  the  establishment of TKM Finants AS. Marit
Vooremäe does not hold any shares of Tallinna Kaubamaja Grupp AS.

The  establishment of subsidiaries  and reorganisation of  the Group's structure
will  have  no  effect  on  the  consolidated  financial  results  of the Group.
Establishment  of subsidiaries is  not deemed to  be qualifying acquisition of a
holding for the purposes of the part 'Requirements for issuers' of the Rules and
Regulations   of  the  NASDAQ  OMX  Tallinn  Stock  Exchange  and  it  will  not
significantly  impact  the  activity  of  the  Tallinna  Kaubamaja Grupp AS. The
members  of the management board and the supervisory board of Tallinna Kaubamaja
Grupp AS have no other personal interests in these transactions.

Raul Puusepp
Chairman of the Management Board
Tel 731 5000