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B:218

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B:163

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| Apresentação do Roadshow

Arezzo&Co Investor’s Day

Retail Infrastructure

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| Financial

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6 10

21

29

45

50

2007 2008 2009 2010 2011 2T12

# owned stores

Development of retailing competences

owned stores as benchmark

Closer relations with end customers

Maximize shareholder value generation

Evolution of number of owned stores

Growth of owned-store channel, 21% of sales over the last twelve months, has driven

Arezzo&Co retail culture for the last 5 years

Creation of retail-oriented culture .1

1

3

2Q12

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People - sales force productivity and creation pool of talents

R&D - process of creating collections with sell-out vision

Sourcing - supply strategy based on interpreting turnover

Financial - broader value chain management through :

• Working capital: accounts receivables and inventories

• Evaluation of investment in point-of-sale

• Retail management by results

Information Technology - importance of point-of-sale data

Growth of owned-store operation boosted the involvement and support

from the entire Company for the retail operation: owned stores and franchises

Sell-Out Focus

Development of competencies .2

1

4

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Smaller collection - buy 80% of target

Smaller collection -buy 100% of target

ILLUSTRATIVE / NOT TO SCALE

Bigger collection -buy 100% of target

Bigger collection -buy 80% of target

Launch

collection

Start invoicing

Start sell out

Deadline for sell-out of product in store

Inve

stm

en

t in

sto

ck

.1

.2 .3 .4

.1

.2

.3

.4

Payment terms for franchisee longer from scenario 1 to scenario 4

Extension of receivables terms aims to create incentives to maximize sales of chain of

stores

Management of terms for settling receivables from franchisee

Objectives for more integrated management of franchisee due dates : • Increase sell-out focus • Smooth flow of payments • Raise cash-flow predictability enabling more new investments in the business • Detach payment period from flow of deliveries

Management of franchisees

working capital .3

1

5

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Decision to open a store takes into account both geographic location and generation

of additional value for shareholders

ROIC

Net

pre

sen

t va

lue

+

+

-

-

Franchise stores

owned stores

• ROIC vs. NPV • Sensitivity analysis for different scenarios • Sales potential of POS in question

• Key consumer centers (mainly SP and RJ) • High profitability + high operational efficiency • Benchmark for franchisees • Flagship stores ensure greater visibility and reinforce brand image

20%

Feasibility analysis owned-store strategy

Feasibility analysis for single-brand

stores .4

1

6

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• Analysis of actual versus planned sales • Assessment of store's stock-out level and remainder • Product Mix Review

Revenue

• Review of lease agreements • Adjust store's sales area

Occupancy cost

• Store's team count • Compensation and benefits package

People

• Tax regime: "Simple" X "Presumed" X "Actual" Tax

• Fixed / variable costs analysis - operational leverage • Analysis of Back Office sharing between stores versus structure for

dedicated franchisee

Back Office

e.g. variables e.g. corrective measures

Monitoring results of each store individually

ensures healthy and sustainable results for the entire distribution network

Retail management by results .5

1

7

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| Information Technology applied to retail

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B:232

The retail system’s integration process began in 2008 with the company owned stores that became the benchmarks for the franchises, ensuring a homogeneous reading of the performance indicators

Implement integrated system in company

Implement system in 2-3 Arezzo franchisees

(Pilot)

Do rollout for entire network in all brands

Strategic Demand Expected results

Obtain SSS information and other retail indicators

Automatic capture of sales data from stores

Allow the implementation of a smart and easy to use supply model for the franchisees

Data warehouse with consistent turnover information, product inventory, and sell-out information for R&D, Merchandising, and Sourcing.

Reduce the franchisee back office to improve their results

Tools for managing sales performance in stores, products and their attributes, salespeople, inventory control, integrated financial management, and monitoring of results

Provide CRM (Customer Relationship Management) and other technologies

Tracking and sharing the profile of each client, their habits, customs, comments, and sales transactions, creating aids for the strategic sales planning of the stores

Integration of retail systems .1

2

9

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65 DIFFERENT SYSTEMS

Start of the Arezzo&CO unified system project of retail

Consolidation of the project of privately owned stores and the pilot project with franchised stores

Roll-out of the system for the chain

Project conclusion

Evolution of Technology Applied to Retail

The conversion of 65 systems into a single platform required a standardization process and a monitoring of the processes of the company and the franchisees, capturing the benefits of system integration

Year 2009 2010 2011 2012 % integrated stores

5% 46% 87% 95%

Main technological actions

Review of store processes and customizations of the integrated system for the franchise network

Improvement of the store management reports and the development of new technologies for supplies management based on sell out

Consolidation of capture tools for POS information

New solutions and processes

B2B Consolidation for open collection, closed collection, sale of products in production phase

Beginning of the continuing products project and replacement and sales actions based of sell out. Effective use of sell-out information by R&D, collection planning and POS management.

.2

2

10

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B:232

…to sell more, have no overstock … and achieve goals!

1 2 3

The use of technology to support the management process...

Retail Operations Management Support

The processes and retail systems support not only store operations, but the entire supply management and the relationship with the final client.

.3

2

11

To get to know the consumer

profile

To manage performance indicators of

both the store and the team

To optimize supply and

stock management

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Products in transit Allows stores to identify billed merchandise ahead of time to adjust space in inventory and notify clients

Turnover Report Analysis of sales and inventory, evaluating indicators by SKU generating actions for each item

Novelties Allows the manager to see the new products daily preparing the team for daily sales activities

Replacement

Sales

Receiving

Sales Champions Presents the high turnover products, integrated with the B2B (on-line replacement)

Arezzo Web, Schutz Web B2B website to offer online products (replacement inventory) automatically integrated to logistics operations

Continuing Monitoring of replacement of continuing products for stores, based on the reading of information from the POS

Supply and Inventory Management

Optimize Supply and Inventory Management

.4

2 1

12

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Control Panel

Salesperson

Ranking*

Daily sales*

Comparative

Information

Average Markup*

Supplies indicators and sales information on

a daily basis, facilitating immediate action on

the results leverage points

Allows monitoring and actions regarding the

performance of the online store sales team

Information about sales of stores with online

updating, providing the main store indicators

Sales achieved vs goal vs previous year - by

date and by product category, projections for

closing and inventory

Allows daily management of the operational

results by store, period, collection and

product

* Online monitoring

Sell-out Performance Management

Manage Performance Indicators for Store and Team

.5

2 2

13

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CRM Activities

Control and management of sales activities, based on

actual sales data, seeking to increase purchase

frequency

Consumer purchases

Identify consumers by profile, products

purchased, purchase frequency, actions

and campaign yield

Greater Proximity to the Final Client

Get to know the Customer Profile

.6

2 3

14

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Improve planning, creation, and distribution of new collections, reducing the

time to market;

Accelerate research and the adoption of the technologies for the store floor

(tablets, collectors, image and traffic monitoring, electronic media);

Technology to support Distribution Centers;

Constant training activities and adoption of good management practices and

operational processes with the franchisees;

Current Focus

CRM activities to obtain greater client interaction.

After completing the unification system, a new cycle of seeking technology

solution to support the retail operation

.7

2

15

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| Improved productivity and people management

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MANAGEMENT EVOLUTION

Team Focus Process Optimization Management Improvement

Retail Management: Process of Improvement and focus on productivity

.1

3

• Sales

• Operational projects

of low perceived

value

• High turnover rates

among the team

• Standardization of back

office projects at the

store

• Simplification of

controls and reports

• Better use of available

systems

• Managerial treatment

• Sales + Excellent

service

• Business management

+

• Follow up to the DRE

of the stores

+

• Indicators management

• People management

MANAGEMENT EVOLUTION 17

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• Over BRL 1M invested in training in the first half of 2012

• 20% Retail turnover in Company owned Stores during the first half of 2012

• Product

• Fashion and trends

• Sales technique

• Store operations

• Visual merchandising

• Sales systems

• Integration of New operators

• Management Training

• Sales Conventions

• Sales Incentives (motivational)

Training Tools

Retail Management: Training and Available Tools

A entire approach for training sales teams in the various fronts of the retail operation

.2

3

18

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Training Hours/HC

Retail Management: Training and Available Tools

• Over BRL 1.5M invested in sales incentives in 2011. Reaching over 4,500 people in the company and franchise network sales force

Focus on increasing training and sales motivation, seeking to increase engagement

and guidance for results

.3

3

19

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Retail’s virtuous

circle

High Investment in

People

High productivity

Efficient operational execution

Higher sales and

profitability

Initiatives

•“Belly on the Counter” project: periodic visits from

senior management to the store network

•“Pereirão” project: project of the 2011 apprentice

class, focused on store operations

R:152

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R:80

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1

Supporting Structure for ProjectsMaintenance - Interface

Stores Support

• Notifies support team about the maintenance demands that may arise at the store

• Notifies the store of the date of preventive maintenance

• Notifies maintenance demands

• Schedules preventive maintenance

• Requests emergency visits• Approves the estimation

for materials for repairs and the visits provided by the company

• Recieve the visit reportsfrom the company

Visit the store for preventive or corrective maintenance

Service provider

Retail Management: Other incentives

Strengthening the retail culture

.4

3

20

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B:218

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People Cycle

• Trainee 2011 projects

• People Cycle

• 360º evaluation to “C level”

Principles:

• Real members

• Meritocracy

• Long term perspective

•Adhesion of Company 1st line

•Talent Pool

Evolution of people schedule

Initiatives 2012

Several implemented initiatives of the People schedule, seeking to attract, retain, and

develop Company talents

.5

3

People Committees

Feedback for Competences and Career /

Consolidation of the Development Plans

Leader Development Program

Design of the Budget and People Plan

for the following year

Payment of bonuses and Definition of

the Goals for the Year

Feedback of the results of the previous

year and Competence Evaluation

Partners

Program

21

Mar

Jan/Feb

July

Aug/Sep

Sep/Nov

Oct/Nov

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| Apresentação do Roadshow

22