This is the full Case Deck from 2nd Place Winner UBC Sauder School of Business.

1. BIRKS A Breath of Fresh Air Cappellacci | Ghosh | Herberts | Jang

2. This is not a jewellery store

4. Attract more customers

6. Increase transaction total

8. Evaluation of Options

12. Birks Under the Microscope Given the high brand value of Birks, how can Birks effectively handle the current economic situation while improving it’s cash flow?

14. Brand Perception is the Key Differentiator in the Competitive Canadian Jewellery Market Tiffany & Company Holt Renfrew Birks Luxury Middle Value Peoples Spence Diamonds Perceived Quality The Bay Sears Ben Moss Jewellers Charm Costco Winners Zellers Walmart Low High Main competitor Price Competitor How can Birks position and differentiate itself to successfully compete? Source: Kantar Media 2010

16. Will lead the world out of the global recession

17. Seek approval from others when making purchases

18. Online shoppers – research and purchase

19. Self indulge in product that make them feel youthful

20. Redefined aging, life is just beginning at age 60

21. Marriage is important

22. Career driven

23. Catalogue shoppers

24. Highly educated dual income families

25. Family oriented with a significant value on relationships

26. Rely heavily on personal recommendations

27. Demand healthy work-life balance

28. Diverse populationHow can Birks define and represent a consistent brand given the differences between these three generations? Source: Statistics Canada, Packaged Facts

30. Price is less of a factor in making purchase decisions

31. More likely to use credit cards for purchases – don’t see the immediate expenditure of money

32. Make up 20% of the population and contribute 50% of household income

33. Often concerned with being fashionable as they have the means to keep up with trends

34. Likely to keep up with technological trends – early adoptersProvided that they there are many similarities among affluent people of all generations, how can Birks capitalize on this lucrative market? Source: Statistics Canada, Packaged Facts

35. The Opportunities Available to Birks Birks and Mayors Competition Very strong brand equity $1.7B industry with high seasonality Variance across the three generations Differentiation is defined by the brand Customer Preferences Canadian Jewellery Industry Reevaluate current product mix to align with all three generations Engage a new brand spokesperson in addition to Heil and Rochette Development of a promotional campaign to drive awareness Redefine the in store experience to appeal to all three generations of consumers Creation of products in collaboration with other luxury brands Sponsorship of local artistic events Capitalization on these three opportunities to drive sales

36. Evaluating Alternatives to Enhance the Brand

37. Evaluating Alternatives to Enhance the Brand Capitalize on Birks’ promotional mix, in-store experience and sponsorship opportunities to create loyal customers and increase sales

38. Determining Strategic Direction Developing the Optimum Solution Implementation and Impact Developing the pre-purchase experience to drive awareness Enhancing the purchase experience to drive in store sales Long Term Vision for Future Expansion in foreign Markets Developing the Optimum Solution

39. Birks position is synonymous with luxury and reflects its proud roots of exceptional quality The Birks experience is one of such exclusivity many Generation X and Y consumers may feel excluded from the brand Strengthening the Birks Brand by Enhancing Exposure in Multiple Channels A Well Marketed Brand Captures the Imagination Our strategy encompassed a multi-faceted and integrated strategy to make Birks more relevant to Gen X and Y Source:1 to 1 media.com

40. Touchpoints are the key to building a strong Brand By focusing on enhancing specific touchpoints the brand can be promoted and position to better attract Gen X and Y without alienating current customers Post Sales Promotion Product quality Web Presence Pre purchase experience Post purchase experience Brand promise Earned Media Product performance Purchase experience Product delivery Retail Display Customer Service Consumers that engage with 3 or more channels spend six times more than the average consumer Touchpoints are becoming increasingly digital and are highly related to internet use Enhancing pre-purchase and purchase experience experiences for target demographics is key to a strong brand

42. Create an emotional connection and purchase incentive

43. Drive awareness through brand association in key demographics

46. Affluent users use catalogues and mobile devices more than other consumers

47. Focus on a Wedding Ring builder

49. Appeal to growing mobile shoppers

50. Drive store foot traffic

52. The card will offer a discount as well as an invitation for an appointment

54. Ensures customer’s loyalty

55. Drives traffic to the store and customer connection

57. Target mid-scale high end art, theatre and musical production Opening Parties

58. Provide branded flyers and banners for the event

59. Four Metro Regions: Vancouver, Calgary, Toronto, Montreal

62. Incorporate concepts of sustainability and social responsibility

63. Use mass promotion channels to build awareness

64. Leverage earned media through sponsorship and other events

66. Increase foot traffic and sales conversions

69. Increase transaction total

71. A Review on Employee Incentives Impact on employee motivation after adequate compensation is met Total impact on employee motivation Introduce “customer service” metric as a key performance indicator (KPI) into current commission based compensation*See Appendix for implementation http://www.shrm.org/hrdisciplines/compensation/Articles/Pages/IntangibleIncentives.aspx

73. Eligible for promotion

74. Linked to salary increases

75. Birks University

76. Formal training

77. In-house

78. Informal training

79. Linked to CE KPI

80. Birks University

81. Eligible for promotion

82. Managerial praiseFocus on fostering a strong customer-centric culture through extensive employee training and development http://www.peppersandrogersgroup.com/view.aspx?DocID=32706

83. Developing an Exceptional Customer Experience to Reflect Birks Brand Identity “As Canada's premier luxury jewellery brand and most respected designer and manufacturer of fine jewellery, timepieces, sterling silverware and gifts, Birks represents a heritage of trust, uncompromising quality and courteous service.” Customer Experience Drivers Feel: satisfied with a strong understanding of Birks identity Service: Follow-up amenities; follow up promotions and launch details Feel: friendly ambiance with a sophisticated “buzz” Service: instant greeting by sales associate Feel: relaxing, fascinating, enjoyable Service: approachable and friendly sales associate Feel: luxurious products to match luxurious experience Service: Knowledgeable and unintimidating sales staff concerned about finding the “perfect fit” Create a more memorable customer experience by ensuring exceptional customer experience from store entrance to store exit*See Appendix for implementation http://www.birksandmayors.com/index.asp?cs=480

84. Improving the Customer Experience to Drive Sales Exceptional customer experience leads to increased volume of customers and increased sales per customer

86. Evaluation of Options

88. International Expansion: Two-Sided Coin Birks & Mayors must determine their capability of expanding Internationally and the returns on their time and capital Affordability of Diversifying Customer Base? Highest Return on Executives Focus? Gained Benefits versus Failure Cost? Clarification Scope & Objective Con’s Pro’s Qualitative Factors Capital Required *”Don’t Go Global” Sophisticated Finance Blog, Robert Hacker, CFO One Laptop per Child and MIT Professor

89. Sample Cost Model of Expansion $449,600 per International Store* Clarification Scope & Objective Clarification Scope & Objective Qualitative Factors Qualitative Factors Capital Required Capital Required * “Costs of Forming in Inda” IndiaBusiness Forum * “Costs of Setting up Office in India” New Zealand Trade and Enterprise * “Costs of Setting up Office in India” New Zealand Trade and Enterprise * See Appendix: Cost of Birks Store

90. Current Geographic & Capital Assessment of Current State 87% Ratio of Indebtness to Total Capitalization Capital Available Current Locations -16% Decrease in Working Capital 2009 to 2010 $14M Excess Borrowing Capacity 69 North American Locations 282,000 Retail SqFt *Mike Rabinovitch - Birks & Mayors Inc. - SVP, CFO July 10, 2010 Thompson ReutuersEarningsConferenceCall

91. High Level Assessment Beginning to Correct Fragile Finances, Keep Positive Momentum Going Assessment of Current State Assessment of Current State “ …during the past fiscal year, we achieved our primary goal of deleveraging the Company… We will, however, continue to strive to improve the productivity…and limit our capital expenditures. Capital Available Capital Available Current Locations Current Locations ” - Tom Andruskevich, President, Birks & Mayors Inc. 25% 8% Reduction in Bank Indebtness 2009-2010 Decrease in Inventory 2009-2010

92. No Expansion In the Short Term Do Not Expand Until Financially Stable, Consider as Long Term Strategy Fragile Financial State, Priority on Deleveraging Low Working Capital or Borrowing Capacity Evaluation of Options Market Opportunities Decision Criteria

93. Lucrative International Markets Evaluation of Options Evaluation of Options Market Opportunities Market Opportunities Decision Criteria Decision Criteria India & China Experiencing Fastest Growth in Population, Wealth, Jewelry Market *”India, China to Equal US Jewelry Market” Commodity Online, July 2007 *”Jewelry and Watches in Canada” Datamonitor, June 2010 *”Jewelry and Watches in China” Datamonitor, June 2010

94. 2014 Consider Indian Expansion First Focus North America; if expansion in Future India is Attractive Evaluation of Options Evaluation of Options Market Opportunities Market Opportunities Decision Criteria Decision Criteria *See Appendix for Potential Implementation Plan

96. High Level timeline

98. 11% 7% Financial Position Exiting Troubled Times *See Appendix for Financial Data

99. Improving Debt Position but still suffering in Sales and Profit 18% 11% 7% Financial Position Exiting Troubled Times *See Appendix for Financial Data

100. The Recession: Just an Excuse? Worse relative to Competitors; Outlined Strategy To Drive Sales Representedas % of 2008 Level SALES 2009 & 2010 PROFIT 2009 & 2010 -2.05% -7.06% -9.64% -4.88% -9.18% -5.85% *See Appendix for Financial Data

101. Diamond Clear Financial Returns App Campaign: $404,000 In Store Experience: $3,482,000 Local Sponsorship: $2,951,000 Traditional Media: $1,322,000 Birks Birthday: $211,000 Three Year Additional Revenues $2.73M $2.70M $2.72M Rev 45 5 4 3 4 3 2 2 1 1 2012 2011 2013 Conservative Increase of $8.37M Revenues, $4.18M Profits Due to Campaign *See Appendix for Financial Data

102. $2,349,341.96 $3,728,467.79 127.92% 203.02% Return On Limited Capital for Birks 127% ROI 203% ROI NPV: Program Costs Profit ROI Range Conservative-Aggressive $3.73M $2.35M $1.84M COST PROFIT-C PROFIT-A Effective Campaign Capturing Gen X & Y Yields 127%-203% ROI *See Appendix for Financial Data

103. Next Steps: Change Management Structure Prepare stakeholders for the organizational changes and provide the tools to support and sustain change Sustain Understand Buy-in Transforming the business Enabling process change Executive level support Communication and process enabling Director, management, employee leadership team feedback Feedback from all levels of organization Senior level feedback HR professional feedback Input Tracking progress Amendment planning Stakeholder needs assessment Communication strategy Change management project summary Board approval Deliverables

104. Mitigating Risks Our recommendation encompasses a multi-faceted and integrated strategy to make Birks more relevant to Gen X and Y

105. Key Objectives Our recommendation encompasses a multi-faceted and integrated strategy to make Birks more relevant to Gen X and Y

106. Moments into Memory

107. THANK YOU We’d like to welcome any questions or comments

108. Appendix

109. Appendix – Long Term Product Mix Suggestions Grow and develop Birks brand product lines to specifically target the tastes and preferences of certain consumers

111. Demand work-life balance

112. Family oriented with a focus on building strong relationships

113. Ethnically diverse

114. Heterogeneous

115. Highly educated and dual income

116. Internet is their way of life

117. 1982-2002

118. 1/3 of the population

119. Liberal

120. Most ethnically diverse

121. Least likely to change spending habits

122. Culturally liberal

123. Technologically connected

124. Seek approval from others when making purchases

125. Online shoppers – research and purchase

126. 1940-1959

127. Dedicated to the careers

128. Life is just beginning at age 60

129. Self indulgence

130. Focus on feeling youthful

131. 34.5% heavily invested in green initiatives

132. Marriage is important

133. Career driven

134. Catalogue shoppersSource: Packaged Facts

136. Self indulge in product that make them feel youthfulSource: Statistics Canada

138. Highly educated dual income familiesSource: Statistics Canada

140. Will lead the world out of the global recessionSource: Statistics Canada

141. Appendix – Birks Boreal Campaign Birks Boreal Collection It’s the serenity beneath the trees. The richness of the natural world. The cultural identity of our nation. This is not jewellery. It’s a way to thank Mother Nature for the little things It’s the serenity beneath the trees. The richness of the natural world. The cultural identity of our nation. This is not jewellery. It’s a way to thank Mother Nature for the little things Market sustainable practices to appeal to green conscious consumers

142. Birks Facebook Presence

143. Birks Twitter Presence

144. Appendix – Compensation KPI changes Include “Customer Service” as a key KPI for employees to add incentive to provide an exceptional customer experience Proposed Compensation Structure *Assumption: average senior sales employee 65 % 35 % KPI based commission Base salary Accomplishment of sales targets: 20% Accomplishment of customer service targets: 10% Accomplishment of leadership targets: 5% 20% 10% 5% Implementation Plan

145. Appendix – Sales Staff Placement Changes Proposed staff placement Current staff placement Sales manager Sales manager Sales staff Sales staff 1. Opportunity for most amicable sales staff to be at front-of-house 2. Allow sales manager to monitor high margin sales (closer to luxury products) 3. Create a more inviting and unintimidating experience by greeting customers within seconds of entering Strategically place sales staff to create more inviting experience for all customer segments

146. Appendix – Product Placement Changes Proposed product placement Current product placement Baby boomers Generation X/Y Expectant/current Mothers Home Baby boomers Generation X/Y Expectant/current Mothers Home Move Gen X/Y products closer to the front of store to be closer to the younger/friendly staff and increase the chances of being greeted instantaneously Allow staff to be more specialized in a particular department (increase staff knowledge) Strategically place products to create more inviting experience for all customer segments

147. A Marriage Between our Strategy and the Birks Culture Our recommendation adheres to Birks’ six key principles

148. Appendix: Cost of Birks Store

149. Appendix: Working Capital, Net Income, and Debt to Assets 2008-2010

150. Appendix: Financial Data

151. Appendix: Financial Data

152. Appendix: Financial Data

153. Appendix: Traditional Marketing Reach

154. Appendix: Financial Projections Conservative

155. Appendix: Financial Projections Aggressive

156. Appendix: NPV and ROI

157. Appendix: Upsell and New Sell Estimates

158. Appendix: Working Capital, Net Income, and Debt to Assets 2008-2010

159. Fostering the Luxury Culture in India Issue Solution

160. Strategic Placement of physical locations to support Luxury Brand Create exclusivity through strategic placement of physical stores

161. Personalize Retail Ambiance to Create Birks & Mayor Experience

164. High Ceilings

165. Increased square footage

166. Customized drywall/window placement

168. Support Product to Upsell Goal Loyal Customers Repeat Purchasers Big Ticket Purchases

169. Increasing Product Presence Establish Inspirational desire for Birks & Mayor in an emerging target market

170. “I’ve Made it”

171. Increase brand awareness through Bollywood exposure Award Shows Swag Bags Product Placement 500 Units Paid Endorsement Mumbai Delhi 1000 Units Women:Pendandt Unit Cost $1280 Example Client: AshwariaRai

172. Create a VIP Program Expected Annual Cost: $100,000

173. VIP Program Metrics Brand Awareness and Perceived Status within local community Sales per customer at Birks & Mayor stores Action Items Hire a director of sales in India $60,000 Pilot program in India, long term global expansion

174. Project Timeline

175. Mitigating Risks

176. Project Resources