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Part I – Key ConsiderationsPart 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

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Part II – Foreign Supply SystemPart 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)

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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 SystemPart II – Foreign Supply System

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Part II – MerchandisePart 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

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Part II – Purchase Brake-Down By Source Part II – Purchase Brake-Down By Source ChannelChannel

Importers25%

Importers25%

Italy40%Italy40%

Others6%

Others6%

India +Bangladesh

12%

India +Bangladesh

12%

China +Hong Kong

17%

China +Hong Kong

17%

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Italy40%Italy40%

Others non EU20%

Others non EU20%

India + Bangladesh16%

India + Bangladesh16%

China +Hong Kong

24%

China +Hong Kong

24%

Part II – Purchase Brake-Down By OriginPart II – Purchase Brake-Down By Origin

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Part III – O.B.S.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

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Part III – O.B.S. ServicePart 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)

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Part IV – The Key Factors in Sourcing Part IV – The Key Factors in Sourcing DecisionsDecisions

QualityFabrics and

accessoriesFinishingsStyle

PriceFOBInsurance, Fright,

Duty, Clearance,Dead time

QualityFabrics and

accessoriesFinishingsStyle

PriceFOBInsurance, Fright,

Duty, Clearance,Dead time

ServiceTime to marketTerms of paymentsMerchandise returnsProblem solving

Country RiskCurrencyPolitical instability

ServiceTime to marketTerms of paymentsMerchandise returnsProblem solving

Country RiskCurrencyPolitical instability

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Part IV – QualityPart IV – Quality

Quality is a process

It takes time to be built

It’s 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

It’s 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

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Part IV – PricePart 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

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Part IV – ServicePart 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

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Part IV – Country RiskPart 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