1. Apparel Retail
Discussion Materials
Consumer Retail Group
February 15, 2011

2. Market Trends
US Retail Industry Update
 Current market trends in Retail Industry:
 Pent-up demand, a rising stock market and incremental improvements in the overall economy led to a solid holiday
season in 2010. The combined November/ December sales roses 4.1%, representing the best holiday comps since
2006
 The level of consumer confidence is moving in two directions: with higher-income consumers spending again but still
seeking value, and lower-income consumers remaining cautious on spending. Clothing sales were particularly strong,
posting gains of 11.2%
 Apparel goods are likely to skyrocket due to increasing cotton prices and labor costs in China. The retailers will likely
have no choice but to pass along increased costs to consumer, which would negatively impact unit volumes.
2
NAICS Code 4481 Adjusted Annual Sales for seasonal variations and holiday and trading-day differences, but not for price changes.
Source: US Census as of February 15, 2011 http://www.census.gov/retail/mrts/historic_releases.html
US Retail Industry Structure
Internet Retail Discount Stores
Department Chains
Food Retail
Restaurants & Food
Services
Catalog & Specialty
Distribution
Specialty Foods & Food
Products
Furniture & Furnishings
Retailers
Apparel & Footwear Manufacturers
Footwear & Accessories
Retailers
$3,386 $3,467 $3,618
$3,841
$4,093
$4,313 $4,454 $4,409
$4,129
$4,398
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
US Retail Industry Annual Sales 2001-2010…

3. Market Trends
US Apparel Retail Sector Overview
3
 Current market trends in Apparel Retail Sector:
 Apparel sales were particularly strong during the 2010 holiday season, rising 11.2%, more than 10 times pace of the
previous year. Consumers have been continuing to invest in trusted brands
 Rising cotton prices are expected to impact end consumer prices in 2011. While hesitant to raise prices in a difficult
economic environment, both retailers and wholesalers appear to have recognized the need to take pricing action in
order to limit margin declines
 The M&A sector has focused mainly on strategic buyers who continue to target opportunities to grow via acquisitions
NAICS Code 4481 Adjusted Annual Sales for seasonal variations and holiday and trading-day differences, but not for price changes.
Source: US Census as of February 15, 2011 http://www.census.gov/retail/mrts/historic_releases.html
$119 $123 $128
$136
$145
$154
$162 $159
$152
$159
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
US Apparel Retail Sector Annual Sales 2001-2010 in Billion
Work Casual Denim Going Out
American Eagle American Eagle
Abercrombie &
Fitch
Abercrombie &
Fitch
Urban Outfitters Urban Outfitters
Forever 21 Forever 21
H&M H&M
Express Express Express Express
Guess Guess
Bebe Bebe
Gap Gap
Banana Republic Banana Republic Banana Republic
J. Crew J. Crew
Teens
Late 20’s/
30’s +
20-30s
Source: Company data, UBS EXPRESS Equity Research Report.

4. Market Trends
Apparel Retail Market Activity
4
Observations
 M&A activity in Apparel has been more than halved in
2010 compared to 2005.
 However, M&A activity in Apparel Retail sector is not
expected to remain at current levels as we continue to see
signs of a healthy backlog of transactions building in the
space.
 Large strategic buyers continue to target opportunities
to grow via acquisitions, as organic growth continues to
face headwinds, given that consumers are cautiously
increasing their spending.
Source: Capital IQ*
As of February 15, 2011
Source: Capital IQ*
As of February 15, 2011
36
30
39
28 24
18
2005 2006 2007 2008 2009 2010
Apparel Retail M&A Activity
Number of Transactions
8.6x
7.1x 7.4x
2.7x
5.3x
8.2x
2005 2006 2007 2008 2009 2010
Apparel Retail Multiples
EV/EBITDA
3
6
2 2
3
7
Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010
Apparel Retail Private Placements
Number of Transactions
Source: Capital IQ*
As of February 15, 2011

5. Market Trends
Nov. 2010 Acquisition of J. Crew Group
5
Analyst Commentary
 “The acquisition of J Crew would make a highly
appealing LBO, as the core company concept
maintains growth opportunities”
 “It’s a great deal for J. Crew shareholders since
estimated takeover value represents a 28%
premium to stand-alone fair value estimates.
There are not many ways to grow the firm other
than aggressive cost cutting and expanding into
bridal and men’s segments, as well as the
Madewell brand”
Leveraged Acquisition Loans Asset Based Credit Facility
Investment Considerations
 J Crew is a leading retailer with multiple sales
channel: 220 retail stores, 85 factory outlets, 20
Madewell stores and online venue
 The company made $1.7 billion sales in 2010
 A top industry management team (Millard
Drexler) that can deliver great results
 Acquiring the firm at an attractive price at
$43.50 per share (52-wk high of $50.96 in April)
(1) Premium to October’s average stock price.
(2) LTM on date of acquisition.
has been acquired by
Transaction Value: $3.0 Billion
Offer Price/Share: $43.50
Premium: 24.6%(1)
Cash Consideration: Equity (38.7%)
Debt (61.3%)
PF Ownership: TPG (75%)
LGP (25%)
2010E EBITDA Multiple: 9.6x
LTM(2)
's EBITDA Multiple: 8.6x
Financing: Term Bridge
Underlying: NA Sr Unsecured Notes
Proceeds Raised: $1.2 Billion $400.0 Million
Maturity: 1/26/2018 NA
Feature: NA 1YR SC@101%
Coupon: L + 350 L + 800
Price: 99.25% NA
S&P Rating: B CCC
Moody's Rating: B1 Caa1
Proceeds Raised: $ 250.0 Million
Maturity: 2016
Coupon: L + 250
 Acquirers took
advantage of cheap
debt and increasingly
regard the stock
market as good value
 J. Crew Group was
acquired at it’s top
performance stage
as a result, this
acquisition strategy
depends on potential
future growth rather
than a simple
management
turnaround strategy

6. Market Trends
Recent M&A Activity in the Apparel Retail Sector
6
Source: Capital IQ as of February 15, 2011.
Closed Date Acquiror Target Target Description
Enterprise
value
EV/ EBITDA
11/23/10
(Announced)
Leonard Green & Partners,
L.P. and TPG Capital
J. Crew Group, Inc. (NYSE:JCG)
J.Crew Group, Inc. is a multi-brand, multi-channel, specialty
retailer. The company offers an assortment of women's, men's
and children's apparel and accessories. The company conducts
its business through retail, factory, clearance, crewcuts, and
Madewell stores, catalogs, and on its Website.
$2,679.4 8.4x
1/4/11 LF USA Inc.
Oxford Industries Inc.,
Substantially All of Oxford
Apparel Business
Oxford Apparel Business produces branded and private label
dress shirts, suited separtes, sport shirts, casual slacks,
outwear, sweaters, jeans, swimwear, westernwear, and golf
apparel.
$121.7 NA
11/17/10 Lodis Accessories, Inc. Another Line, Inc.
Another Line, Inc. designs, manufactures, and sells belts, and
hangbags for women, offering chain and beaded, fabric, and
leather and woven style belts. The company was founded in
1988 and is based in Lake Forest, California.
$6.8 NA
11/15/10 Signature Eyewear Inc. Rough Justice
Rough Justice manufactures designer footwear for women. The
company's products include platforms, wedges, dress footwear,
sandals, and flats. The company was founded in 2007 and is
based in Inglewood, California.
NA NA
11/4/10 KarpReilly, LLC Adrianna Papell, LLC
Adrianna Papell, LLC designs, sources, and distributes day and
occasion dresses under the Adrianna Papell, Aidan Mattox, and
Hailey Logan labels.
NA NA
11/1/10
Hanesbrands Inc. (NYSE:
HBI)
GFSI Holdings Inc.
GFSI Holdings, Inc., through its wholly owned subsidiary, GFSI,
Inc., engages in designing, manufacturing, and marketing
sportswear and active wear bearing names, logos, and
insignias.
$225.0 7.5x
10/28/10
(Announced)
Charles Komar & Sons, Inc.
Carole Hochman Design Group,
Inc.
Carole Hochman Design Group, Inc. designs and manufactures
sleepwear, loungewear, and daywear for women. The company
was founded in 1930 and is based in New York, New York.
NA NA
Selected M&A Transactions for the Last 2 Years

7. Market Trends
7.9x 7.9x 7.8x
6.6x
7.9x
8.2x 8.1x
8.9x
10.2x
8.8x
7.2x
12.2x
14.1x
Tommy Hilfiger Claire's Stores Deb Shops Charlotte Russe Tommy Hilfiger Gymboree Barney's May Neiman Marcus Linens n Things Burlington Coat
Factory
Michaels Stores Barney's
Recent M&A Activity in the Apparel Retail Sector
7
Selected M&A transactions for the last 2 years, Source: Capital IQ as of February 15, 2011.
Apex Apollo Lee Equity Advent V. Heusen Bain Jones Federated Consortium Apollo Bain Consortium Istithmar
12/05 3/07 7/07 8/09 3/10 10/10 11/04 2/05 5/05 11/05 1/06 6/06 6/07
$1,547 $2,581 $259 $312 $3,136 $1,761 $400 $17,260 $4,981 $1,305 $1,958 $5,604 $942
Acquiror
Date Announced
Transaction Value
Specialty Apparel Branded
Specialty Apparel Median: 7.9x
EV/ LTM EBITDA
Branded Median: 8.9x
Private Equity Buyer Strategic Buyer