Competing in a global environment

A story of creativity, ambition and values

Herman Van de VeldeManaging Director

Van de Velde NV

Design, production and distribution of luxury lingerie

From craftsmanship to industrial production

1919: Foundation Van de Velde

Achiel and Margaretha Van de Velde Pioneers 1st product: ladies corsets with an eye for quality

distribution through retailers

From craftsmanship to industrial production

1919: Foundation Van de Velde

Achiel and Margaretha Van de Velde

pioneers

distribution through retailers

2nd generation:

use of elastic materials

from the 40’s onwards retail in Belgium and the Netherlands

Extension of assortment

– Fashion

– Marketing-driven

– Delocalization of production

– Cultural change

– Governance change

Change VdV business model

Change business model: Fashion

Design department - Team of 50 people (stylists, textile engineers, pattern

makers, etc.)- 500 new styles per year- 20.000 SKU’s- Combination of fashion and fit

The VdV Design process

Ideadevelopment

Project PhaseIdea Phase Production Phase

Project development

PreliminaryDesign

Market test

Feasibility Study

ProjectDefinition

BaseDesign

Sales cycle

DetailDesign

ProductionRelease

Delivery toshops

Master plan Re-orders

Change business model: Marketing-driven

Focus-strategy - Product: lingerie

- Luxury Segment (= price segment)

FOCUS: choice of market segmentSegmentation of the lingerie market

80 % 70 %

< EURO 20STANDARD

Hunkemöller, Etam

< EURO 20 – 50MIDDLE

< EURO 50 - 100LUXURY

MJ, PrimaDonna, MJ l’Aventure

> Euro 100Sarda20 %

30 %

Northern Europe

Southern Europe

Change business model: Marketing-driven

Focus-strategy - Product: luxury lingerie

- Price Segment

- Distribution channel

FOCUS: choice of distribution channel

Distribution channel % total market Positioning Van de VeldeSpecialized retailers 28 to 50 % XLuxury department stores and chains 7 to 21 %

Department stores X Chains -

Supermarkets and food 50 to 24 % -Mail order 15 to 5 % -

Retail investments

- USA: Intimacy - 17 shops- Turnover 38,4 mio USD

- Germany & Spain: Oreia- Spain : 1 shop- Germany: 6 shops

- Holland: Linchérie- 42 independent stores- Turnover 22 mio EUR

Retail investments

- England: Rigby & Peller- 7 stores in and around London− ‘Bra Fitting’ (Lingerie Styling). − Turnover 2011: 10,1 m£

- Hong Kong / China : Private Shop− 22 stores in Hong Kong and China− Estimated turnover 2011: 8 m$− Joint venture between Getz and Van de Velde

Change business model: Marketing-driven

Focus-strategy - Product: luxury lingerie

- Price Segment

- Distribution channel

- Geographic focus

- Brands instead of private label

Brand policy instead of private label

1981: Marie Jo

1990: PrimaDonna

1997: Marie Jo L’Aventure

2008: Marie Jo Intense

2009: Andres Sarda – Sarda by Andres Sarda

2010: PrimaDonna Twist

Marie Jo is timeless elegance & discrete luxury

Marie Jo offers an unmatched mix of passion for fashion, innovation,

quality and fit

Marie Jo has a unique and universal signature

“Haute Lingerie”

Pure but creative, stylish and mature lingerie

Closely related to Marie Jo and equal in fit and quality

“Lingerie Pure”

PrimaDonna offers a world of ultimate perfection, fashion,

luxury and fit

Secure up to the finest details without any compromise

Fashion & fit go hand in hand in a wide size range from B till

H-cup

“Exigez l’excellence”

‘Créateurs’ label within the luxury segment

Very sophisticated collections in lingerie and swimwear

For the self confident, independant and powerful woman

Casual chic

25 something

Modern EnergeticSexy

Change business model: Delocalization

Two tendencies

Centralization of core competencies

Delocalization of production

Change business model: Delocalization

Centralization of core competencies

– Strategy and policy

– Design

– Quality control raw materials

– Cutting of the fabric

– Core production Belgium

– Quality control and expedition

Delocalization of production

49,5%

46,2%

4,3%

China Tunesia Eastern Europe

Van de Velde: changing organisation

Before: Taylorist organisation

• Centralism, control, hierarchy• Little room left for HR• Piece work• Specialization• Repetitive work• Transactional leadership

Van de Velde: changing environment

1. Globalisation

2. Fashion driven

3. Difficulties to attract people

Evolution towards innovation driven organisation

• Lowering the brainline• Teamwork• Polyvalency• Expanding job content• Stimulating initiative• Coaching leadership / Transforming leadership• Different reward and compensation systems• Stimulate enthusiasm and passion

Change business model: Governance

– IPO in 1997

– External management