1

WELCOME

2

Workshop RedcatsFebruary 15th, 2001

Agenda

9.30 - 9.45 Welcome (David Newhouse)

9.45 - 10.15 Strategic overview (Hartmut Krämer)

10.15 - 10.30 Financial highlights (Bertrand Vinot)

10.30 - 10.45 Q/A

10.45 - 11.00 E-commerce challenges & prospects at Redcats

(Hartmut Krämer)

11.00 - 11.30 La Redoute on-line (Paul Delaoutre)

11.30 - 11.45 Coffee break

11.45 - 12.15 Optimization of international development (Pascal Bazin)

12.15 - 12.30 Q/A

12.30 - 1.30 Lunch

Agenda

1.30 - 2.00 Catalog conception (Nicolas Bernard)

2.00 - 2.15 Q/A

2.15 - 2.45 Customer Relationship Management (Patrick Terrier)

2.45 - 3.00 Q/A

3.00 - 3.30 Bus transfer to Leers (Logistics Center)

3.30 - 5.00 Presentation and visit of the logistics Center

(Patrick Terrier / Gérard Seulin)

5.00 - 6.00 Q/A with Redcats management

6.00 - 6.30 Bus transfer to train station

REDCATSREDCATS

6

Strategic overviewStrategic overview

Hartmut Krämer

Outline

Redcats and its home shopping competition in key markets

Drivers of growth & profitability

Strategic focus Existing brand mapping Leveraging of common ressources

Main competitors - Home Shopping

Net Sales

30 000

40 000

50 000

60 000

70 000

M F

RF

OTTO

QUELLE

Net Sales

-

20 000

40 000

60 000

80 000

100 000

120 000

1996 1997 1998 1999

M F

RF

OTTO

QUELLE

REDCATS

/

NECKERMANN

Main competitorsFrance Home Shopping Market

QUELLE-NECKERMANN

Main competitorsUS Home Shopping Market

Net Sales

-

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

1997 1998 1999

M U

SD

JC PENNEY

SPIEGEL Group

LANDS'END

BRYLANEFINGERHUT/MACY/BLOOMINGDALE

Main competitorsUK Home Shopping Market

Net Sales

- 200 400 600 800

1 000 1 200 1 400 1 600 1 800 2 000

1996 1997 1998 1999

M G

BP GUS

LITTLEWOODS

GRATTAN

REDCATS UK

0

200

400

600

800

1000

1200

1400

1996 1997 1998 1999

Net

Sal

es -

MS

EK

H&M ROWELLS

HALENS

CELLBES

REDCATS NORDIC

Main competitorsSweden Home Shopping Market

Strategic focus

Leader in customer satisfactionAn internationally well-positioned portfolio of currentbrandsSuccessful implementation of new organisation with

shared services and infrastructureMulti-channel retailer with emphasis on being a majore.commerce player : double digit % share of salesDevelop Home / Lifestyle business in Europe and USA

External growth in Europe and USA

Existing brand mapping

Market PotentialCompetencyPositioning GLOBAL EUROPE / USA LOCAL

French Lifestyle La Redoute

Scandinavian Lifestyle Redcats Nordic

Lane Bryant Roamans/Jessica London

Large Sizes Men KingSize

Senior Apparel To be named Daxon - Edmée - Celaia

Children Apparel To be named VertbaudetHome + LeisureLow income / credit Empire - Maison de ValérieSportswear Modern Somewhere

Sportswear Classic Cyrillus

Budget / Off price Apparel To be named Chadwick's /Lerner /Empire /Josefson

American Lifestyle Brylane Home

Large Sizes Women

Leveraging of common ressources

New organisationLa Redoute Redcats UKRedcats NordicBrylane as one Specialized Brands from FranceOperational Center France

New top management team to improve competitive position and to shape future strategic portofolio developmentSuccesful development in E.commerceHave the tools and the environment to develop, attract andretain the best people

New organization : Principles

STRONG FOCUS IN EACH GEOGRAPHIC MARKET

To focus on the retailing business To control customer satisfaction To manage strategic mapping brands

TO CONCEIVE AND DEVELOP THE FORMATS OF TOMORROW

COMMON BACK OFFICE INFRASTRUCTURE

To reach and exceed critical size To generate economies of scale To have a profit centre To raise expertise To open up the activity to third parties

within the Group and possibly outside the Group

TO STRENGHTEN COMPETITIVE

ADVANTAGE

Provide all companies with a complete and competitive order preparation / dispatching service Eveil et Jeux

Add to e-commerce offering remote selling distribution services Fnac.com

Develop network pick-up points ; complement available functionalities (sales / credit card payment)

Pooling logistics and distribution

infrastructures for out-of-store sales businesses

18

E-commerce challenges and prospects at Redcats

Hartmut Krämer

Redcats: one of the three main business models of PPR’s e-commerce strategy

A strategy to gain market share on current competition Increased flexibility of the offering: frequent renewal

of the product range More efficient direct marketing

An important productivity gain potential Cost reduction in terms of catalogs, call-centers,

mailing

Redcats: e-commerce

Major competitive advantages for Redcats A strong expertise in selling through pictures Infrastructure for home delivery and return management Important customer database Know-how in CRM and one-to-one marketing Strong presence on high usage Internet markets (Scandinavia,

US) 40 e-commerce sites (15% to 20%) of internet customers are not standard mail order

customers

Major challenges and opportunities

Adapting product dimension (conception/sourcing) to the rythm possibilities of the web

Scalability of technical infrastructure

Mutualisation of development costs

22

E-COMMERCE : KEY ACTIVITY DATA

1999 2000

% of sales through internet

La RedouteLa Redoute 0.2% 1.5%

EllosEllos 2.9% 5.2%

BrylaneBrylane 0.2% 3.8%

Chadwicks 0.2% 7.0%

Brylane Home - 8.0%

Dec-00

2.7%

5.8%

6.6%

12%

11.5%

23

Financial highlights

Bertrand Vinot

24

in million Euros

NET SALES 4 355EBITDA 270CAPEX (Operational, non-financial) 75ROCE (total) 14 %ROCE (excluding Brylane(1) ) 28 %HEADCOUNT 22 900

(1) A two stage acquisition (1997 & 1999)

1999 Key financial data

25

(1) Denmark, Estonia, Finland, Norway, Sweden

(2) Austria, Belgium, Germany, Portugal, Spain, Switzerland

A worldwide home shopping company

In million Euros

2000 Figures

%

France 1 973 41

UK 620 13 Scandinavia (1) 285 6 Other Europe (2) 205 4

Total Europe 3 083 64

USA 1 738 36

Asia 13 0

Total 4 834 100

26

A sustained international development through acquisitions

In billion Euros

1996 1997 1998 1999 2000

Redcats North America

Redcats Nordic

1996 Perimeter2.4

2.7

4.14.4

4.8

2.8 2.8 32.6

27

A multichannel distribution group

1999 2000

Catalogs 95.2% 94.5%

Retail 4.5% 3.4%

E.Commerce 0.3% 2.1%

100% 100%

28

A retail group dedicated to its customers’ well-being through a large variety of products

% net Sales 2000

Apparel 69

Home 23

Services & Other 8

100

29

The most internationally diversified group in the home shopping world

Net Sales(Billion Euros)

% of SalesOutside home country

1 Otto Versand 20.5 39

2 Quelle / Neckermann 7.4 17

3 Redcats 4.8 59

4 JC Penney 4.2 0

5 Gus 3.2 17

6 Littlewoods 1.9 15

(1999 data, except redcats 2000)

30

Key operational factors

• Present in 17 countries

• 18 global or local catalogs

• 93 billion of catalog pages

• 85 million parcels / year

• 60 million customer addresses worldwide

• 100 million phone calls

• 40 Web sites

• More than 100 stores

• 22 900 associates

31

La RedouteE-commerce

Paul Delaoutre

La Redoute 2000 Web sites’ sales

4.6 Millions single visits (3.5 Millions in France) 250 000 clients bought on our sites (161 000 in France) 5 % of visitors placed an order (9% in Dec)

338 000 orders (172 000 in France) More than one million articles sold on the line (604 000 in France)120 000 catalog demands in France.

1999 Budget 2000 2000 Sales

InternationalFrance

Total

1714

31

4865

113

6384

147

(In million FF)

-

5 000 000

10 000 000

15 000 000

20 000 000

25 000 000

JAN FEBR MARCH APRIL MAY JUNE JULY AUG SEPTEMB OCT NOVEMB DÉCEM-

2 000 000

4 000 000

6 000 000

8 000 000

10 000 000

12 000 000

14 000 000

Initial Dem.

Sales

laredoute.fr’s 2000 monthly sales

Demand Sales

AN EFFICIENT WAY TO REACH NEW CUSTOMERS

• 10% of new customers

• 16 000 new web buyers in France = 3% of La Redoute new buyers (against 1.1% of total sales)

Market share : La Redoute’s share of the French e-commerce market (approx. 4 bn FF in 2000) is in excess of 4% vs a 1.2% global share of the French retail market.

Internet: a rising part of sales

Austria 5.4 8.3Switzerland 4.9 8.2

UK 4.3 9.2USA 3.7 13.3

Spain 2.0 4.4Belgium 1.6 1.9

Portugal 1.0 1.8France 1.1 3.0

% of total sales in 2000

% of sales in December 2000(in %)

Our e-commerce approach

E-commerce E-business

E-CRM

100% dynamic web platform – Customization of contents and services – integrated production workflow

Deep integration into mainframes and legacy functionalities and databases

Commercial Intelligence

Knowledge Management

Rules engines

No e-commerce without e-business

No e-CRM without e-businessNo e-commerce without client intelligence

France’s first fully web enabled call center, alloweb is a multi-content, multi-access, relationship tool dealing with entering and outgoing 14 000 monthly contacts

E-Marketing : a clear territory and positioning

Competitive field : The leading site in people and home equipment

Positioning : laredoute.xx, evolves as fast as fashion and is always up to date

Client Promises : Product offers : frequent update. Additional offers to the

catalogue Services : map locator, search tools, Style Advisor, all in one

order, secured payment ... Prices : variable prices and dynamic merchandizing

An ambitious « net-chandizing »

- 27 « Daily Bargains »- 9 daily « Coups de Cœur »- 50 specials web commercial events / year- A product policy involving the whole company

through a Web Commitee- 5% of Novelty products specific to the web

Nouveautés Nouveautés Nouveautés

Nouveautés

Nouveautés

Nouveautés

B.A du jourOffre personnelle

Chronofolies...

Coup de cœurB.A dans chaque boutique

Nouveaux prixExclusivités

...

Fête des pèresOffre Grand froidRentrée scolaire

Les invités de la saison...

Produits associésConseils d’achatDossiers tendance

Conseil en styleRecherche par marque, couleur...alloweb, ...

Mise en ligne progressive dans la saison

Ventes rapides de 1 heure à 7 jours 10 à 100 codifs produits

e-mailing & offres promos

Merchandising de 1 à 7 jours 100 à 1.000 codifs produits

Quinzaines commerciales de 1 à 3 semaines 1.000 à 5.000 codifs produits

Fonds de rayonréférencement permanent 40 à 100.000 codifs

env. 8 mois

Femme Lingerie EnfantHomme Sport MaisonImage&Son

Jeux& Micro

Electro-ménager

What’s going on ?

In France, 23% of sales is additional « pure web » turnover

77% of the web sales is transferred from the paper catalogs

Average Purchase of 128 Euros (15% higher than average) and of 152 Euros + for « pure e-boutique » orders

0

2

4

6

8

10

12

14

16

18

20

JAN FEBMARCH APRIL

MAY JUNEJULY

AUG

SEPTOCT

NOV DEC

Direct orders Additional orders

Web & mail order: additional sales through the clicks

A high end market and a specific product mix

61 % of e-boutique sales through Housing and technical products (vs 35% overall)

In million FF

Web impacts on P&L Extra turnover in 2001

25% of additional sales 13% new customers better satisfied clients lead to improved sales ratios

Industrialization of sales allow economies of scale and productivity gains

Gains through strong decrease in cost of order processing (1/6 ratio or 8 F saved FF per order in 01)

Lighter and faster Customer relationship

Economies on commercial spending through cheaper and fewer mailings and on cost of boutique per customer

2001 highlights

Additional growth will be searched through An increased coordination between Paper & Web marketing plans and

commercial pressure Launch of multi-channel sales campaigns using retail – catalogs –

paper mailings – web marketing

New paths to the customer will be explored through Sales of innovative products well adapted to internet channel and to

high level and fidelity-prone clients Keep leading CRM expertise and develop high-return services

42

Catalog conception

Nicolas Bernard

Catalogue creation

Focus on the global process

From the database to paper catalogue printing

16 million addresses

THE CUSTOMER FILETHE CUSTOMER FILE

8 million buyers inthe last 4 seasons

4 million buyersin woman apparel

MAPPING OF SECTIONS IN WOMANAPPAREL

liz claiborne

la mode sans se ruiner

créateurs,marques images

références

active wear

marques juniortipster

softgrey

couleur

bain moderne

côté femme

laura clément

marques jeans

double page chaussures

prix mini junior

édéis

prix mini mode

best

bain classique

linéa moda

la boutique

prix mini classiqueimpeccables

tabliers 4ème de couverture

romantique=derhy

stop aff mode

on n'est pas des angesla city

Axe

2

Axe 1

SENIOR JUNIOR

SOPHISTICATED

CASUAL

Positioning of the section Laura Clement

Target Her needs Competitors Life style Communication codes Casting

Assortment of the section Laura Clement

Category of items Price level vs Market Level of Quality / Size range vs Redoute

Collection creation Laura Clement

Double pages

Internal designers

Coherence with assortment

Technical specifications

Fabric

Washing instruction

Size specification

Packing instruction

Proposal of layout

Fitting before photo

Photos

Fast move from Argentic to digital photography

External

photographers

Various photo locations

Text implementation

Photo combinations

Artwork and printing

Syquests given to photograveurs for Artwork

Rotogravure printing in Europe

Big book of La Redoute 20.000.000.000 printed pages / year

Final page

57

Optimization of international development

Pascal Bazin

Redcats: a unique combination ofcompetitive advantages

A portfolio of 18 brands / catalogs with a strong positioning on their customer

target / market a significative and constant growth professional and ambitious teams

A “Customer megabase” per country with high level of customer qualification easy multibrands access powerful analysis tools

Powerful back-office internal organizations and systems well established in the main markets :

USA - the UK - FRANCE - SCANDINAVIA offering very competitive costs able to handle multi brands activities with a

common tool

Redcats: a unique combination ofcompetitive advantages

This unique combination of competitive

advantages gives REDCATS very strong

opportunities of optimized international

development organized around 3 models

First model : “Full exportation” Full concept & product offer Same catalog Central buying Similar direct marketing technics with local

support and back office

Vertbaudet UK

Optimization of international development

Second model : “Exportation” Selection in product assortment Different catalog Central buying Potential different marketing technics with

local support and back office

La Redoute USAChadwicks UK

Optimization of international development

Third model : “Licence” Integration in a brand / catalog of a product

know-how developed by an otherbrand / catalog

Vertbaudet SwedenDaxon Christmas Offer UK

Optimization of international development

A real optimization of our international development based on a very strong and international know-how on Development of offers / buying capacities Realization of catalogs Deep local market know-how Competitive internal back-offices

In conclusion

66

Customer Relation Management at REDCATS

Patrick Terrier

How Redcats’ order-takers are becoming How Redcats’ order-takers are becoming TELEMARKETEERSTELEMARKETEERS

VIDEO: The Customer Relationship at MOVITEX

Redcats Customer Relation Departments

The strategic, operational interface of our Services to the Customer

Main functionsMain functions

Order-taking

Before and after sales advice

Payment processing

Answering customer queries

Claims management.

Through various media :

Telephone Mail Minitel (France) Internet

Organisation

The departments are ‘services to customer’oriented and take into account the ever-increasing ratio of phone calls.

Approx. 100 M calls / year to Redcats .

85% of orders are by phone at Brylane.

65% at Redcats Nordic.

55% at La Redoute.

At Vertbaudet phoned-in orders increased from 12% in 1992 to 55% in 2000.

Extended call center opening-hours. 24H a day, 7 days a week at Brylane 7 days a week at La Redoute, Redcats Nordic, Vertbaudet,

Empire Stores Before and after-sales advice development

La Redoute, LMDV, Advice from a specialised technician on specific products.

Capacity pooling Dedicated teams (sharing a common infrastructure) or

complete cross-brand adaptability Mail / phone versatility (Redcats Nordic) Multi-lingual operators (Cyrillus, Brylane) International development (USA, the UK, Sweden,

Portugal)

Objectives : Increase service rateUphold brand particularities

New developments in Customer Relations

For CR operations, internet development generates: e.mail activity web call centers

E.mails

A new development in the operator’s job Learning to use new tools Written contact but not quite the same as a letter Quick, precise replies expected by customers More numerous contacts generated

Web Call Center

100% interactivity with the Web-surfer chats voice on IP, voice button, call-back...

REDCATS NORDIC / BRYLANE Specialised structure for answering e.mails

Ellos: 25000 emails/year Brylane: 45 000 emails/year

2 teams covering 15 hours / dayObjectives to answer within 2 hours

2001: the set-up of real Web call centers

Effective Web call centers. La Redoute: today nearly 500 contacts daily 65% = e.mails

objectives = answer within 4 hours Interactive contact : different options used

1. the chat 2. the call-back (using normal telephone - 2nd line or GSM) 3. the voice on IP is rarely used

Areas for development Optimise organisation to be able to adapt to volume growth

January 2000 - 3000 contacts / monthDecember 2000 - 12000 contacts / month

Specialisation of operators according to the medium used Help in answering e.mails.

REDOUTE / CYRILLUS

New developments in Customer Relations

Take advantage of customer contacts to generate additional sales

Different types of pro-active sales

Substitution: suggest a replacement article when item not available: another colour, similar product...

Services: promote services associated with the products:• extend a guarantee • open a credit account• subscribe to a magazine• …

At Redcats Nordic and Brylane, the procedure is highly developed

At La Redoute, the procedure is in full boom as well

At the Specialised Brands, currently tested and implemented

New developments in Customer Relations Different types of pro-active sales

Additional sales: suggest a complementary item e.g. batteries for a game, cassettes for video recorders, ties for shirts etc. promote the ‘offer of the day’ e.g. highly visual, low priced sales offer suggest other items from the catalogue

• Net perceptionNet perception

This tool will return a list of upsell items to the associate for offer to the customer

• Realtime recommendation engine• Using past buying history of the customer and knowledge gained

from a similar taste community• Combination of statistical or neural net modeling, trending and

filters

- Liquidation of inventory

- Selling staple items

- Promoting new trends

- …..

• BRYLANE: Tested this past FW 2000 with associates from Roaman’s 2% lift in sales

Generalisation this Spring

Information system support

Permanent dialogue between the product, Marketing

and CR sectors

Support and training of operators

Training of management to motivate sales staff

Put into place instruments measuring activity

A real change of the tele-operators job