Capital Markets Day, November 28, 2012 TOM TAILOR SOURCING STRATEGY JACOB ROJENS DIRECTOR GLOBAL SOURCING

Capital Markets Day, November 28, 2012 TOM TAILOR SOURCING STRATEGY JACOB ROJENS DIRECTOR GLOBAL SOURCING

GLOBAL SOURCING BIG PICTURE Cost is going up China is changing. Fast No magic sourcing country Efficiency Change 2

GLOBAL SOURCING BIG PICTURE IN NUMBERS Country USD billions apparel exports, 2010 Number of apparel factories Number of workers in apparel industry (in million) China 130 18,000 5-10 Bangladesh 16 5,000 4 India 11 11,000 1.5 Vietnam 11 2,000 2-3 Indonesia 7 2,450 0.4 Pakistan 4 7,500 6 Cambodia 3 250 0.3 3

SOURCING CHALLENGES IN 2010 Cotton. Prices tripled over 12 months. Rampant speculation Increasing and strong domestic Chinese demand as well as a recovering global economy Rapid wage increases and inflation in developing economies Lead-times increased resulting in higher freight cost A need for a TOM TAILOR presence in Asia to safeguard capacity and production space for continued growth 4

MOVE FROM AGENTS TO OWN SOURCING 3rd party agents Own sourcing structure Small companies Country / product specific Ineffective structures Vested interest One interest only One oversight Risk management Cross divisional efficiency by bundling capacities Optimize buying power Doing more with less suppliers 5

JV PARTNER: ASMARA INTERNATIONAL LTD. Asmara International Ltd. and TOM TAILOR have a long standing relationship Asmara has an established network of offices and professionals across Asia: - 12 Offices - 9 countries - 750 people Decision to found TOM TAILOR Sourcing Ltd. 51% controlled by TOM TAILOR 49% controlled by Asmara International Asmara has a broad customer base in US and Europe, e.g. Abercrombie & Fitch, Olsen, Guess, Marc O Polo, Zalando, Loblaws (Canada) 6

TOM TAILOR SOURCING: ACHIEVEMENTS FIRST 12 MONTHS Structural achievements Establish TOM TAILOR Sourcing with Asmara International Shift complete sourcing volume from Asmara to TOM TAILOR Sourcing Terminate existing agency agreements Standardize payment terms Communicate objectives for TOM TAILOR Sourcing in Hamburg and Asia Sourcing achievements Bangladesh transition India focus Bundle capacities and reduce supplier base Devised sourcing strategy for biggest product categories: T-shirt category Better manufacturers 7

FOCUS ON BANGLADESH AND INDIA LEADS TO CHANGING SOURCING LANDSCAPE TOM TAILOR sourcing by fob turnover 2011 China 32% Bangladesh 23% India 15% Indonesia 12% Europe 8% Pakistan 5% Vietnam 2% Others 3% TOM TAILOR sourcing by fob turnover 2012 China 25% Bangladesh 28% India 18% Indonesia 11% Europe 5% Pakistan 6% Vietnam 6% Others 1% Change in fob sourcing 2012 versus 2011 Bangladesh +32% India +28% Indonesia -8% China -11% * fob = free on board 8

TOM TAILOR SOURCING: NETWORK Present in 6 countries 7 offices China: 18 people 130 people India: 26 people Bangladesh: 46 people Hong Kong: 6 people Exclusive procurement for TOM TAILOR Group Indonesia: 20 people Vietnam: 14 people as of November 2012 9

Sourcing volume BUNDLING SUPPLIERS: DOING MORE WITH LESS SUPPLIERS 236 suppliers in 2011 reduced to 197 in 2012 20.000.000 16.000.000 2011 Suppliers and volume Strategic direction 1% of total buy came from 71 suppliers 2011 47 suppliers 2012 12.000.000 50% of our total buy came from 15 suppliers 2011 20 suppliers 2012 8.000.000 Combining and reducing supplier base to increase efficiency 4.000.000 0 1 51 101 151 201 Number of suppliers 10

SOURCING STRATEGY BY CATEGORY: T SHIRTS Sourcing by category 2011 T-shirts 19% Knit 15% Denim 14% Shirts 13% Pants 10% Jackets 8% Sweat 8% Polo 4% Other 11% Comments Reduce number of suppliers from 47 to 18 Reduce number of markets from 9 to 3 markets Develop better manufacturers on quality, price and speed Target 1.8m saving on fob turnover 11

BONITA: SOURCING SPLIT BY COUNTRY BONITA sourcing by fob turnover 2012 Turkey 33% Asia 26% Germany 21% Italy 4% Netherlands 4% Others 12% BONITA sourcing by fob turnover 2015 Turkey 29% Asia 53% Germany 6% Italy 1% Netherlands 1% Others 10% Targeted changes in fob sourcing 2012 versus 2015 2012 2015 Europe: From 29% to 8% Asia: From 26% to 53% Turkey: From 33% to 29% Others: From 12% to 10% * fob = free on board 12

BONITA: PRODUCT OPPORTUNITIES Polo Pique Turkey 18 India 8 Blouse Importer 25 China 15 Coordinates Turkey 29 Indonesia 16 Bonita bought 11 million pieces 2011 13

BONITA: PRIORITIES 2013-2015 Sourcing activities concentrate on 2014 and beyond Set ambitious milestones with product teams Reduce purchase from EU based importers & traders Move part of Turkey production to Asia Harmonize process and structure with TOM TAILOR Target 2015: Reduction of fob expense by 10m; Measure: quarterly fob averages by product category 14

TOM TAILOR SOURCING: OUTLOOK 2013 Exit from all 3rd party agencies completed Expand cross divisional synergy in key categories 150m managed by TOM TAILOR Sourcing (60%) Continue to build a world class sourcing organization for TOM TAILOR 15