Shermag signs distribution agreement with The Rug Studio

    SHERBROOKE, QC, March 13 /CNW Telbec/ - Shermag Inc. (TSX: SMG) today
announced that it is to become the exclusive distributor of The Rug Studio
products throughout North America.
    The Rug Studio is a leading contemporary, fully customizable area rug
program, manufactured by The Lanart Rug Company of St-Jean-sur-Richelieu,
Québec. Designed specifically for furniture retailers, The Rug Studio's unique
display system requires minimal retail floor space and provides consumers with
a wide selection of customized area rugs.
    "Shermag believes that consumers will appreciate purchasing their area
rugs at the same time and store as their furniture," commented Mr. Jeff
Casselman, President and CEO of Shermag. "This new partnership with The Rug
Studio underlines the importance of providing convenience, innovation and
choice in today's highly competitive market. The Rug Studio's contemporary
products are an excellent complement to Shermag's furniture collections. Area
rugs represent a significant portion of the retail furnishings market and we
are delighted to be able to offer the The Rug Studio's unique designs and
flexibility to our retail partners and their customers."
    Derek Galbraith, President of The Rug Studio added: "The Rug Studio's
strength is quality craftsmanship and superior design. By partnering with
Shermag, we can focus on design and manufacturing, while Shermag markets the
program through its existing sales force and retail network throughout North
America. It is an excellent combination."

    Company Profiles

    Shermag Inc. (SMG), headquartered in Sherbrooke, Québec, is a leader in
the design, production, marketing and distribution of high-quality residential
furniture. The Company employs nearly 1300 people and is a vertically
integrated manufacturer and importer with its own cutting rights, sawmill,
veneer plant, manufacturing operations and global sourcing division.

    The Lanart Rug Company, situated in St-Jean-sur-Richelieu, Québec, is the
premiere source for high quality contemporary machine made and hand made area
rugs. Employing over 100 people, Lanart designs and manufactures The Rug
Studio for furniture retailers.


    This news release contains forward-looking statements about the Company's
operations, objectives, strategies, financial situation and performance. These
statements are made based on assumptions and management's best estimates with
regard to future events. However, the business of the Company is subject to
risks and uncertainties that could cause actual results to differ from
expected results. Important factors that could cause such differences are
changes in pricing pressure being exerted by competitors, particularly
Asian-based companies, significant movement in the Canadian/US dollar exchange
rate, and unanticipated problems in implementing the Company's Business
Transformation Plan. This is not an exhaustive list. A broader discussion of
risk factors that could affect future performance can be found in the
Company's Annual MD&A and Annual Information Form, filed with Canadian
securities regulatory authorities. Given these risks and uncertainties,
investors should not place undue reliance on forward-looking statements as a
prediction of actual results. The Company disclaims any intention or
obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.

For further information:

For further information: Investor Relations, Maison Brison, Rick
Leckner, (514) 731-0000; Shermag Inc., Jeff Casselman, President and CEO,
(819) 566-1515

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