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M A R K E T M O N I T O R | F A L L 2 0 1 4

Apparel, Accessories, and Footwear

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Representative Apparel, Accessories & Footwear Transactions

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Contents

Industry Update

Public Stock Performance & Valuations

M&A Activity & Valuations

Moss Adams Overview

Firm Contacts

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5

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12

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Source: U.S. Department of Commerce, CapitalIQ, and Moss Adams Capital estimates.

Consumer Environment Improves, Still-cautious Consumer

Consumer Confidence (July reached 90.9) soared to highs last seen in late 2007, on strengthening job and home markets, strong stock market performance

Labor markets remain stable, with steady job creation (1.6 mm jobs added from January through July), and jobless rate hitting 6.2% in July, improving from 6.6% in January. However, continued shrinkage in the labor force remains a concern; labor force participation rate has tumbled to 62.9% (July reading), its worst level since 1978

Improvements in employment and consumer macro have been countered by loom of inflation (high gas prices, coupled with rising food costs), putting pressure on shoppers to curb spending

Competition for share of consumer wallet has intensified from increased durables (auto, electronics, home) and health category spending

Retail environment remains challenging, due in part to an apathetic consumer, lack of fashion newness, an elevated promotional retail environment, weather conditions; Q4 13 and Q1 14 comparable-store sales performance for a median of selected chain retailers posted declines of 3 to 4%

Apparel retailer sales are expected to grow 3 to 4% in 2014, boosted by product innovation/differentiation, new fashion trends, promotions; average spending for Back-to-School is projected to be up 5% to $669 in 2014, according to a NRF trade survey

Key industry trends include (i) attractive price-value propositions / differentiated products, (ii) omni-channel, (iii) wholesale brands selling direct-to-consumer, (iv) international growth, (v) consumer focus on active/healthy lifestyles, and (vi) private label lines for mass retailers

Same-Store Sales Growth Chain Retailers

Consumer Spending Indicators

Q113 Q213 Q313 Q413 Q114

Abercrombie & Fitch -15.0% -10.0% -14.0% -8.0% -4.0%

Aeropostale -14.0% -15.0% -15.0% -15.0% -13.0%

American Apparel 8.0% 7.0% 2.0% -3.0% -7.0%

American Eagle -5.0% -7.0% -7.0% -7.0% -10.0%

Buckle 1.2% 3.2% -0.5% -2.8% -0.9%

DSW -2.4% 4.4% -0.7% 0.0% -3.7%

Gap 2.0% 5.0% 1.0% 1.0% -1.0%

Genesco -4.0% -2.0% -1.0% 1.0% 1.0%

Guess? North America -9.8% -2.0% -5.0% -4.4% -3.8%

Tilly's 1.1% -0.5% -2.4% -4.9% -6.8%

Urban Outfitters 9.0% 8.5% 7.1% 1.0% 0.0%

Wet Seal -2.9% 3.7% 0.8% -16.5% -16.9%

Zumiez -0.7% 0.9% 1.5% -2.2% 1.8%

Median -2.4% 0.9% -0.7% -3.0% -3.8%

Industry Update

Apparel Retailer Sales

y/y growth

Unemployment Rate

Consumer Confidence (right-axis)

0

10

20

30

40

50

60

70

80

90

100

-12%-10%

-8%-6%-4%-2%0%2%4%6%8%

10%12%

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-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

Aspirational+4%

Diversified -Mid/Small Cap

+9%

S&P 500+17%

Performance+17%

Diversified -Large Cap

+30%

Diversified Large Cap, Performance Segments Higher

Source: CapitalIQ.

Note: The indices in the chart above are composed of the public companies included on slide 7 and 8.

1 Year Performance: Apparel, Accessories and Footwear vs. S&P

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9.0%

18.5%

9.1%

26.7%

21.8%

S&P 500

Diversified -Mid/Small Cap

Diversified -Large Cap

Aspirational

Performance

5.0%

2.7%

5.8%

7.4%

10.2%

S&P 500

Diversified -Mid/Small

Cap

Diversified -Large Cap

Aspirational

Performance

Source: CapitalIQ.

Public Market Valuations Next 12 Months: Estimated Growth

The outlook for companies in Apparel, Accessories and Footwear, is positive, with 6% sales and 14% EBITDA growth projected for a median of selected apparel companies over the next 12 months

In comparison, companies in the S&P 500 are projected to have sales and EBITDA growth of 5% and 9%, respectively, for the next 12 months

Apparel, Accessories and Footwear companies, on a trailing EBITDA valuation basis, are trading at the high range of historical valuation levels

Since 2011, Apparel, Accessories and Footwear companies have largely traded at a premium to the overall market, on a EBITDA multiple basis

Apparel and Footwear

12.1x

S&P 50010.9x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

16.0x

EV

/ T

TM

EB

ITD

A

Sales EBITDA

Note: Apparel, Accessories and Footwear is composed of the public companies included on slide 7 and 8.

Apparel Industry Sales Outlook Higher than Market

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Source: CapitalIQ, company filings.

Note: Not meaningful (NM) if EV/Sales is greater than 10x, or EV/EBITDA is greater than 40x. NA if denominator is 0, for percentages and multiples, or if estimates are not available. NTM figures are based on the median estimate of Wall St. analysts.

Public Company Valuations (9/15/14) ($mm, except where noted)

Operating Statistics EV Valuation Statistics

($ millions, except per share data) Capitalization TTM 2014P Forward TTM 2014P Forward

CompanyMarket

CapEnterprise

Value Sales EBITDAGross

MarginEBITDAMargin

Sales Growth

EBITDA Margin Sales EBITDA Sales EBITDA

Performance

Nike, Inc. $73,922 $70,213 $27,799 $4,312 44.8% 15.5% 10.2% 14.4% 2.5 x 16.3 x 2.4 x 16.9 x

Adidas AG 15,755 16,161 19,654 1,713 48.8% 8.7% -5.3% 8.9% 0.8 x 9.4 x 0.9 x 9.6 x

Under Armour, Inc. 14,587 14,484 2,657 342 49.0% 12.9% 29.2% 13.8% 5.5 x 42.3 x 4.8 x 34.9 x

PUMA SE 3,615 3,260 3,956 102 46.4% 2.6% -8.3% 7.0% 0.8 x 32.1 x 0.9 x 12.4 x

Columbia Sportswear Company 2,642 2,272 1,805 204 45.0% 11.3% 20.3% 10.9% 1.3 x 11.1 x 1.1 x 10.3 x

Average $22,104 $21,278 $11,174 $1,334 46.8% 10.2% 9.2% 11.0% 2.2 x 22.3 x 2.0 x 16.8 xMedian $14,587 $14,484 $3,956 $342 46.4% 11.3% 10.2% 10.9% 1.3 x 16.3 x 1.1 x 12.4 x

Aspirational

Michael Kors Holdings Limited $15,808 $14,683 $3,589 $1,182 61.0% 32.9% 31.1% 32.0% 4.1 x 12.4 x 3.7 x 11.7 x

Ralph Lauren Corporation 15,607 14,812 7,505 1,368 57.9% 18.2% 7.4% 17.5% 2.0 x 10.8 x 1.9 x 10.9 x

Coach, Inc. 10,354 9,626 4,806 1,441 70.3% 30.0% -10.5% 24.6% 2.0 x 6.7 x 2.2 x 8.8 x

Kate Spade & Company 3,861 4,093 1,419 60 57.1% 4.2% -14.4% 12.7% 2.9 x NM 3.8 x 29.8 x

Vince Holding Corp 1,139 1,279 316 61 48.1% 19.4% 19.7% 22.1% 4.0 x 20.8 x 3.7 x 16.7 x

Average $9,354 $8,899 $3,527 $822 58.9% 21.0% 6.7% 21.8% 3.0 x 12.7 x 3.1 x 15.6 xMedian $10,354 $9,626 $3,589 $1,182 57.9% 19.4% 7.4% 22.1% 2.9 x 11.6 x 3.7 x 11.7 x

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Source: CapitalIQ, company filings.

Public Company Valuations (9/15/14)

Note: Not meaningful (NM) if EV/Sales is greater than 10x, or EV/EBITDA is greater than 40x. NA if denominator is 0, for percentages and multiples, or if estimates are not available. NTM figures are based on the median estimate of Wall St. analysts.

($mm, except where noted)

Operating Statistics EV Valuation Statistics

($ millions, except per share data) Capitalization TTM 2014P Forward TTM 2014P Forward

CompanyMarket

CapEnterprise

Value Sales EBITDAGross

MarginEBITDAMargin

Sales Growth

EBITDA Margin Sales EBITDA Sales EBITDA

Diversified - Large Cap

V.F. Corporation $29,327 $30,861 $11,770 $1,990 48.4% 16.9% 8.0% 17.1% 2.6 x 15.5 x 2.5 x 14.6 x

PVH Corp. 10,566 14,012 8,251 1,211 52.5% 14.7% 2.5% 14.8% 1.7 x 11.6 x 1.7 x 11.3 x

Deckers Outdoor Corp. 3,362 3,124 1,588 249 47.7% 15.7% 12.0% 15.2% 2.0 x 12.5 x 1.8 x 11.8 x

Skechers USA Inc. 3,148 2,909 2,109 211 45.1% 10.0% 23.5% 10.9% 1.4 x 13.8 x 1.3 x 11.7 x

Wolverine World Wide Inc. 2,683 3,586 2,699 307 39.7% 11.4% 3.1% 11.7% 1.3 x 11.7 x 1.3 x 11.0 x

Iconix Brand Group, Inc. 2,335 3,744 448 292 NA 65.2% 5.8% 62.5% 8.4 x 12.8 x 8.2 x 13.1 x

Steven Madden, Ltd. 2,206 2,017 1,338 211 36.2% 15.7% 5.5% 15.1% 1.5 x 9.6 x 1.5 x 9.7 x

Average $7,661 $8,607 $4,029 $639 44.9% 21.4% 8.6% 21.0% 2.7 x 12.5 x 2.6 x 11.9 xMedian $3,148 $3,586 $2,109 $292 46.4% 15.7% 5.8% 15.1% 1.7 x 12.5 x 1.7 x 11.9 x

Diversified - Mid/Small Cap

G-III Apparel Group, Ltd. $1,795 $1,843 $1,932 $152 34.8% 7.9% 22.9% 8.3% 1.0 x 12.1 x 0.9 x 10.5 x

Crocs, Inc. 1,200 977 1,207 121 51.3% 10.0% 2.3% 10.7% 0.8 x 8.1 x 0.8 x 7.5 x

Brown Shoe Co. Inc. 1,197 1,350 2,530 158 40.4% 6.2% 2.7% 6.8% 0.5 x 8.6 x 0.5 x 7.6 x

Oxford Industries Inc. 1,076 1,179 952 122 55.8% 12.8% 9.3% 12.5% 1.2 x 9.7 x 1.2 x 9.4 x

Billabong International Limited 506 566 1,061 52 51.8% 4.9% -19.1% 5.7% 0.5 x 10.8 x 0.6 x 10.1 x

Quiksilver Inc. 337 1,095 1,657 44 48.9% 2.7% -9.5% 3.2%