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2. 2 Part I – Key Considerations Leader in the Italian apparel market with 5.29% market share (Jan.-Dec. 02) 3 buying offices (Hong Kong, New Dehli-India, Dhaka-Bangladesh) 5.619 EFT in Italy Leader in the Italian apparel market with 5.29% market share (Jan.-Dec. 02) 3 buying offices (Hong Kong, New Dehli-India, Dhaka-Bangladesh) 5.619 EFT in Italy

3. 3 Part II – Foreign Supply System It supports purchasing activities abroad through the following services: Quality Control (EU area) Vendor Scouting (EU area) Import/Export (customs formalities compliance, logistics) O.B.S. (non EU area) It supports purchasing activities abroad through the following services: Quality Control (EU area) Vendor Scouting (EU area) Import/Export (customs formalities compliance, logistics) O.B.S. (non EU area)

4. 4 64% of group turnover comes from Oviesse Oviesse accounts for 93% of Group purchases from China 64% of group turnover comes from Oviesse Oviesse accounts for 93% of Group purchases from China Part II – Foreign Supply System

5. 5 Part II – Merchandise Foreign purchases account for 60% of Oviesse assortments (207 million Euro in 2002). 35% is directly traded with the Supplier. 25% is traded with import agents Gross margin before mark-downs on Far East goods is 15% higher than that of EU countries Foreign purchases account for 60% of Oviesse assortments (207 million Euro in 2002). 35% is directly traded with the Supplier. 25% is traded with import agents Gross margin before mark-downs on Far East goods is 15% higher than that of EU countries

6. 6 Part II – Purchase Brake-Down By Source Channel Importers 25% Importers 25% Italy 40% Italy 40% Others 6% Others 6% India + Bangladesh 12% India + Bangladesh 12% China + Hong Kong 17% China + Hong Kong 17%

7. 7 Italy 40% Italy 40% Others non EU 20% Others non EU 20% India + Bangladesh 16% India + Bangladesh 16% China + Hong Kong 24% China + Hong Kong 24% Part II – Purchase Brake-Down By Origin

8. 8 Part III – O.B.S. It is 100% run by Gruppo Coin O.B.S. acts like an agent (3.5% commission) O.B.S.s headquarters located in Hong Kong since 1994 Liason offices: Bangladesh since 1996 India since 2001 Amounting to a total of 95 staff members It is 100% run by Gruppo Coin O.B.S. acts like an agent (3.5% commission) O.B.S.s headquarters located in Hong Kong since 1994 Liason offices: Bangladesh since 1996 India since 2001 Amounting to a total of 95 staff members

9. 9 Part III – O.B.S. Service Main services catered by O.B.S.: Far East sourcing both for garments and fabric producers Services and assistance for Buyers Orders follow-up Quality inspections (through-out and after) Shipping management (logistics, custom formalities) Main services catered by O.B.S.: Far East sourcing both for garments and fabric producers Services and assistance for Buyers Orders follow-up Quality inspections (through-out and after) Shipping management (logistics, custom formalities)

10. 10 Part IV – The Key Factors in Sourcing Decisions Quality Fabrics and accessories Finishings Style Price FOB Insurance, Fright, Duty, Clearance, Dead time Quality Fabrics and accessories Finishings Style Price FOB Insurance, Fright, Duty, Clearance, Dead time Service Time to market Terms of payments Merchandise returns Problem solving Country Risk Currency Political instability Service Time to market Terms of payments Merchandise returns Problem solving Country Risk Currency Political instability

11. 11 Part IV – Quality Quality is a process It takes time to be built Its the outcome of a long lasting cooperation with the supplier It is long-term investment Gruppo Coin is costantly seeking to protect and develop this key factor in different countries but with different expectations from country to country Quality is a process It takes time to be built Its the outcome of a long lasting cooperation with the supplier It is long-term investment Gruppo Coin is costantly seeking to protect and develop this key factor in different countries but with different expectations from country to country

12. 12 Part IV – Price Price is the prime key factor that encourages the retailer to search for new sources… …but… …The search ends only when you find the right balance between all four key factors Price is the prime key factor that encourages the retailer to search for new sources… …but… …The search ends only when you find the right balance between all four key factors

13. 13 Part IV – Service Service = Flexibility Reduction of the time span between the finalization of the order and the in-store delivery Working Capital Reduction Higher rotations Flexibility is influenced by: distance, technological development, facilities and others Service = Flexibility Reduction of the time span between the finalization of the order and the in-store delivery Working Capital Reduction Higher rotations Flexibility is influenced by: distance, technological development, facilities and others

14. 14 Part IV – Country Risk In sourcing decisions a retailer must deploy its resources in order to reduce the possible damage that may occur from one single country Natural desasters (i.e. floods in Bangladesh) Political instability (i.e. strikes, riots) Currency volatility Deseases (i.e. plague in 1994 in China, SARS in 2003 in China) Change in the economic and trade policy framework In sourcing decisions a retailer must deploy its resources in order to reduce the possible damage that may occur from one single country Natural desasters (i.e. floods in Bangladesh) Political instability (i.e. strikes, riots) Currency volatility Deseases (i.e. plague in 1994 in China, SARS in 2003 in China) Change in the economic and trade policy framework