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1

• WELCOME

2

• Workshop Redcats
• February 15th, 2001

3
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
4
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
5
REDCATS
6
Strategic overview

• Hartmut Krämer

7
Outline

• Redcats and its home shopping competition in
  key markets
• Drivers of growth profitability
• Strategic focus
• Existing brand mapping
• Leveraging of common ressources

8
Main competitors - Home Shopping
Net Sales
Net Sales
120 000
100 000
70 000
80 000
60 000
M FRF
OTTO
50 000
60 000
OTTO
M FRF
40 000
/
QUELLE
QUELLE
40 000
NECKERMANN
30 000
20 000
REDCATS
-


1996
1997
1998
1999
9
Main competitorsFrance Home Shopping Market
QUELLE-NECKERMANN
10
Main competitorsUS Home Shopping Market
Net Sales
4 500
4 000
3 500
3 000
2 500
M USD
2 000
1 500
1 000
500
-

1997
1998
1999
11
Main competitorsUK Home Shopping Market
Net Sales
2 000
1 800
1 600
1 400
GUS
1 200
LITTLEWOODS
M GBP
1 000
GRATTAN
800
REDCATS UK
600
400
200

-

1996
1997
1998
1999
12
Main competitorsSweden Home Shopping Market
13
Strategic focus

• Leader in customer satisfaction
• An internationally well-positioned portfolio of
  current brands
• Successful implementation of new organisation
  with shared services and infrastructure
• Multi-channel retailer with emphasis on being a
  major e.commerce player double digit share
  of sales
• Develop Home / Lifestyle business in Europe and
  USA
• External growth in Europe and USA

14
Existing brand mapping
Market Potential
Competency
GLOBAL
EUROPE / USA
LOCAL
Positioning
French Lifestyle
La Redoute
Scandinavian Lifestyle
Redcats Nordic
American Lifestyle
Brylane Home
Large Sizes Women
Lane Bryant
Roamans/Jessica London
Large Sizes Men
KingSize
To be named
Senior Apparel
Daxon - Edmée - Celaia
Children Apparel
To be named
Vertbaudet
Home Leisure
Low income / credit
Empire - Maison de Valérie
Sportswear Modern
Somewhere
Sportswear Classic
Cyrillus
Budget / Off price Apparel
To be named
Chadwick's /Lerner /Empire /Josefson
15
Leveraging of common ressources

• New organisation
• La Redoute
• Redcats UK
• Redcats Nordic
• Brylane as one
• Specialized Brands from France
• Operational Center France
• New top management team to improve competitive
  position and to shape future strategic
  portofolio development
• Succesful development in E.commerce
• Have the tools and the environment to develop,
  attract and retain the best people

16
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

17
Pooling logistics and distributioninfrastructures
for out-of-store sales businesses

• 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)

18
E-commerce challenges and prospects at Redcats

• Hartmut Krämer

19
Redcats one of the three main business models
of PPRs 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

20
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

21
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
Dec-00
2000
of sales through internet
La Redoute
2.7
0.2
1.5
Ellos
2.9
5.2
5.8
6.6
Brylane
0.2
3.8
0.2
7.0
Chadwicks
12
-
8.0
Brylane Home
11.5
23
Financial highlights

• Bertrand Vinot

24
1999 Key financial data
in million Euros NET SALES 4
355 EBITDA 270 CAPEX (Operational,
non-financial) 75 ROCE (total) 14 ROCE
(excluding Brylane(1) ) 28 HEADCOUNT 22
900 (1) A two stage acquisition (1997 1999)
25
A worldwide home shopping company
2000 Figures

In million Euros
41


1 973
France
620
13


UK
(1)
285
6


Scandinavia
(2)
205
4


Other Europe

Total Europe
3 083
64

USA
1 738
36


Asia
13
0


Total
4 834
100


(1) Denmark, Estonia, Finland, Norway, Sweden (2)
Austria, Belgium, Germany, Portugal, Spain,
Switzerland
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A sustained international development through
acquisitions
In billion Euros
4.8
4.4
4.1
Redcats North America
Redcats Nordic
2.7
2.4
1996 Perimeter
2.8
2.8
3
2.6
1996
1997
1998
1999
2000
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
(1999 data, except redcats 2000)
Net Sales
of Sales
Outside home country
(Billion Euros)
20.5
39
1
Otto Versand
Quelle / Neckermann
2
7.4
17
3
Redcats
4.8
59
4
4.2
0
JC Penney
Gus
5
3.2
17
Littlewoods
1.9
15
6
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
32
La Redoute 2000 Web sites sales
1999
Budget
2000
2000 Sales

(In million FF)
International
17
48
63
France
14
65
84
147
Total
31
113

• 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.

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laredoute.frs 2000 monthly sales
Sales
Demand

• 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 Redoutes 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.

34
Internet a rising part of sales
of total sales in 2000
of sales in December 2000
(in )
Austria
5.4
8.3
Switzerland
4.9
8.2
UK
4.3
9.2
USA
3.7
13.3
Spain
2.0
4.4
Belgium
1.6
1.9
Portugal
1.0
1.8
France
1.1
3.0
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Our e-commerce approach
100 dynamic web platform Customization of
contents and services integrated production
workflow
Deep integration into mainframes and legacy
functionalities and databases

No e-commerce without e-business
E-business
E-commerce
Commercial Intelligence Knowledge
Management Rules engines
No e-commerce without client intelligence
No e-CRM without e-business
E-CRM
Frances first fully web enabled call center,
alloweb is a multi-content, multi-access,
relationship tool dealing with entering and
outgoing 14 000 monthly contacts
36
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

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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

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Whats going on ?
Web mail order additional sales through the
clicks
In million FF

• 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

Direct orders
Additional orders
MAY
JUNE
AUG
MARCH
APRIL
JULY
JAN
FEB
OCT
DEC
NOV
SEPT

• A high end market and a specific product mix
• 61 of e-boutique sales through Housing and
  technical products (vs 35 overall)

40
Web impacts on PL

• 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

41
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

43
Catalogue creation

• Focus on the global process
• From the database to paper catalogue printing

44
THE CUSTOMER FILE
16 million addresses
8 million buyers in the last 4 seasons
4 million buyers in woman apparel
45
MAPPING OF SECTIONS IN WOMAN
APPAREL
SOPHISTICATED
laura clément
liz claiborne
côté femme
références
la boutique
best
couleur
édéis
créateurs,marques images
prix mini mode
la city
on n'est pas des anges
la mode sans se ruiner
double page chaussures
romantiquederhy
linéa moda
impeccables
prix mini classique
stop aff mode
softgrey
bain classique
JUNIOR
SENIOR
Axe 2
bain moderne
4ème de couverture
tabliers
active wear
prix mini junior
marques jeans
tipster
CASUAL
marques junior
Axe 1
46
Positioning of the section Laura Clement

• Target
• Her needs
• Competitors
• Life style
• Communication codes
• Casting

47
Assortment of the section Laura Clement

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

48
Collection creation Laura Clement

• Double pages
• Internal designers
• Coherence with assortment

49
Technical specifications

• Fabric
• Washing instruction
• Size specification
• Packing instruction

50
Proposal of layout
51
Fitting before photo
52
Photos

• Fast move from Argentic to digital photography
• External
• photographers
• Various photo locations

53
Text implementation
54
Photo combinations
55
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

56
Final page
57
Optimization of international development

• Pascal Bazin

58
Redcats a unique combination ofcompetitive
advantages

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

59
Redcats a unique combination ofcompetitive
advantages

• 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

60

• This unique combination of competitiveadvanta
  ges gives REDCATS very strongopportunities of
  optimized internationaldevelopment organized
  around 3 models

61
Optimization of international development

• First model Full exportation
• Full concept product offer
• Same catalog
• Central buying
• Similar direct marketing technics with local
  support and back officeVertbaudet UK

62
Optimization of international development

• Second model Exportation
• Selection in product assortment
• Different catalog
• Central buying
• Potential different marketing technics with local
  support and back officeLa Redoute USAChadwicks
  UK

63
Optimization of international development

• Third model Licence
• Integration in a brand / catalog of a product
  know-how developed by an otherbrand /
  catalogVertbaudet SwedenDaxon Christmas Offer
  UK

64
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65
In conclusion

• 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

66
Customer Relation Management at REDCATS

• How Redcats order-takers are becoming
• TELEMARKETEERS

Patrick Terrier
67
VIDEO The Customer Relationship at MOVITEX
68
Redcats Customer Relation Departments
The strategic, operational interface of our
Services to the Customer

• Main functions
• Order-taking
• Before and after sales advice
• Payment processing
• Answering customer queries
• Claims management.
• Through various media
• Telephone Mail Minitel (France) Internet

69
Organisation
70

• 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 rate
• Uphold brand particularities

71
New developments in Customer Relations

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

• E.mails
• A new development in the operators 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

72

• 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 / day
• Objectives to answer within 2 hours
• 2001 the set-up of real Web call centers

73
REDOUTE / CYRILLUS

• 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 / month
• December 2000 - 12000 contacts / month
• Specialisation of operators according to the
  medium used
• Help in answering e.mails.

74
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

75
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

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
76

• Net 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 Roamans
• 2 lift in sales

Generalisation this Spring
77
A real change of the tele-operators job

• 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