Le Chateau Announces a Securities Reclassification Resulting from the Voluntary Conversion of Multiple Voting Shares by its Founder

MONTREAL, QUEBEC--(Marketwired - Dec. 22, 2016) - Le Château Inc. (TSX:CTU.A) announced today that a company controlled by its founder, Herschel H. Segal, has given a notice of voluntarily conversion of all of its 4,400,000 Class B Voting Shares, often referred to as the multiple voting shares, for Class A Subordinated Voting Shares of Le Château on a share-for-share basis. The voluntary conversion is related to personal financial planning considerations and Mr. Segal's financial interest in Le Château will not change following the conversion.

The voluntary conversion will trigger a securities reclassification pursuant to which all of the Le Château shareholders will now own Class B Voting Shares, which will be listed on the Toronto Stock Exchange under the new symbol "CTU". The reclassification will take place automatically without the need for shareholders to take any action. Share certificates formerly representing Class A Subordinated Voting Shares will represent Class B Voting Shares. The securities reclassification will take place on December 22, 2016 or soon thereafter, following which Le Château will effectively have one class of shares outstanding with a total of 29,963,762 Class B Voting Shares outstanding. The reclassification of the shares of Le Château will be on a tax free basis for Canadian residents.

Prior to giving effect to the completion of the voluntary conversion and reclassification, Mr. Segal owns or controls, directly or indirectly, 2,456,377 Class A Subordinated Voting Shares (being approximately 9.7% of the outstanding Class A Shares) and 4,400,000 Class B Voting Shares of the Corporation (being approximately 96.5% of the outstanding Class B shares of the Corporation). After giving effect to the completion of the voluntary conversion and reclassification, Mr. Segal will own, directly or indirectly, and exercise control over 6,856,377 Class B Voting Shares, representing approximately 22.9% of the outstanding Class B Voting Shares and will no longer own, directly or indirectly, or exercise control over Class A Subordinated Voting Shares. In connection with the voluntary conversion and reclassification, Mr. Segal did not pay any consideration to Le Château. The Class B shares owned by Mr. Segal are held for investment purposes only. Depending upon the circumstances, Mr. Segal may, from time to time acquire additional securities or related financial instruments of Le Château or dispose of all or a portion of the securities or related financial instruments of Le Château previously acquired. Other than as noted above, Mr. Segal does not currently have any plans or future intentions relating to any of the circumstances described in subparagraphs (b) to (k) of Item 5 of Form 62-103F1 filed on SEDAR under Le Château's issuer profile.

Profile

Le Château is a leading Canadian brand in specialty retailing, offering a broad array of contemporary fashion apparel, accessories and footwear for style-conscious women and men. The Le Château brand is sold exclusively through the Company's 196 retail stores located in Canada. The Company's retail locations are primarily found in major urban shopping malls, as well as street-front locations with high pedestrian traffic. In addition, Le Château's web-based marketing is further broadening the Company's customer base among internet shoppers in both Canada and the United States. With its 57-year tradition of vertical integration, emphasizing a design and manufacturing approach to retailing, Le Château is unique among Canadian fashion merchants.

Forward-Looking Statements

This news release may contain forward-looking statements relating to the Company and/or the environment in which it operates that are based on the Company's expectations, estimates and forecasts. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict and/or are beyond the Company's control. A number of factors may cause actual outcomes and results to differ materially from those expressed. These factors also include those set forth in other public filings of the Company. Therefore, readers should not place undue reliance on these forward-looking statements. In addition, these forward-looking statements speak only as of the date made and the Company disavows any intention or obligation to update or revise any such statements as a result of any event, circumstance or otherwise except to the extent required under applicable securities law.

Factors which could cause actual results or events to differ materially from current expectations include, among other things: the ability of the Company to successfully implement its business initiatives and whether such business initiatives will yield the expected benefits; competitive conditions in the businesses in which the Company participates; changes in consumer spending; general economic conditions and normal business uncertainty; seasonality and weather patterns; changes in the Company's relationship with its suppliers; credit facility renewal; lease renewals; information technology security and loss of customer data; fluctuations in foreign currency exchange rates; interest rate fluctuations; liquidity risk and changes in laws, rules and regulations applicable to the Company. The foregoing list of risk factors is not exhaustive and other factors could also adversely affect our results.

Source: Le Château Inc.

An early warning report with additional information in respect of the transaction will be filed and made available on SEDAR at www.sedar.com under Le Château's issuer profile. In order to obtain a copy of the early warning report, you may also contact Johnny Del Ciancio, Vice-President, Finance and Secretary at Le Château, at telephone number: (514) 738-7000. Le Château's head office is located at 105 Marcel-Laurin Boulevard, Saint-Laurent, Quebec H4N 2M3 and Mr. Segal's address is 5695 Ferrier Street, Mount Royal, Quebec H4P 1N1.