1) Arezzo&Co has progressively made retail the center of its business by leveraging its strengths in products. It focuses on concept to store planning, merchandising, store architecture projects using technology, and a structured PDCA retail management process. 2) Key aspects of the retail management process include breakdown of sales goals, metrics analysis, supply management, and tools to support franchisees. 3) Over 96% of franchisees are satisfied and would open another franchise, demonstrating the success of Arezzo&Co's franchise partnership model and retail best practices.

1. Arezzo&Co Investor Day
Retail - Owned Stores and Franchises
David Python Carlos Pontin
| ApresentaçãoPMO
Schutz do Roadshow Arezzo Franchisees
Manager
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2. Retail - Owned Stores and Franchises
By leveraging its strengths in products, Arezzo&Co has progressively the retail as its
center of gravity
1 Merchandising
Concept to Planning
store Feedback
Retail
Breakdown of point Stores architecture
of sales’ goals by 2
3 project
sales person Technology Visual merchandising
Structured managing
PDCA
applied Sell-out analysis
process
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3. Retail - Owned Stores and Franchises
By leveraging its strengths in products, Arezzo&Co has progressively the retail as its
center of gravity
1 Merchandising
Concept to Planning
store Feedback
Retail
Breakdown of point Stores architecture
of sales’ goals by 3 2 project
sales person
PDCA Technology Visual merchandising
Structured managing applied Sell-out analysis
process
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4. 1- Concept to store
Retail driven collection planning and product mix
Design / Style
Tendencies
Marketing
CRIATIVITY Stimulating desire-driven
Tecnical Drawing purchases
Quality
Margis
Sourcing / Manufacture Merchandising Planning
Costs and product execution Sales performance
(sales turn, cluster, sell-in,
sell-out, etc)
MERCHANDISING
ASPECTS
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5. 1 - Concept to store
Analysis and definition of product mix for each store
Shoes type Price range Life Cycle
R$XXX-XXX R$XXX-XXX R$XXX-XXX R$XXX-XXX
R$XXX-XXX R$XXX-XXX R$XXX-XXX R$XXX-XXX
R$XXX-XXX R$XXX-XXX R$XXX-XXX R$XXX-XXX
R$XXX-XXX R$XXX-XXX R$XXX-XXX R$XXX-XXX
Style level Occasions of use
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6. Retail - Owned Stores and Franchises
By leveraging its strengths in products, Arezzo&Co has progressively the retail as its
center of gravity
1 Merchandising
Concept to Planning
store Feedback
Retail
Breakdown of point Stores architecture
of sales’ goals by 2
3 project
sales person Technology Visual merchandising
Structured managing
PDCA
applied Sell-out analysis
process
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7. 2 - Technology applied at retail
Schutz architectural project bets on flagships essence and highlights the products at a
modern and cosmopolitan background
Closet Video Wall Niches and Updated
Jaquets and accessories Campaigns and marketing actions
Brand horizontalization lighting windows
• More preeminence to products Differentiated products
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8. 2 - Technology applied at retail
Arezzo architectural project bets on chameleon concept, with its stores constantly
modified to incorporate the concept of each new collection
Project model allows visual communication updates at low-cost investment
Visual merchandising brings the most relevant collection information to stores’ level
3 main display updates per year
Flagship
Arezzo Oscar
Freire SP
Summer
Winter
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9. Retail - Owned Stores and Franchises
By leveraging its strengths in products, Arezzo&Co has progressively the retail as its
center of gravity
1 Merchandising
Concept to Planning
store Feedback
Retail
Breakdown of point Stores architecture
of sales’ goals by 2
3 project
sales person Technology Visual merchandising
Structured managing
PDCA
applied Sell-out analysis
process
9

10. 3 - PDCA applied at retail management
Retail management based on metrics and structured sales process, together
with supply management per category
Average price Weekly Routine
Average ticket ‒ Cluster analysis
‒ Sales performance
Items per service analysis
‒ Information sharing
Store productivity among sales teams
(revenues) Traffic
Sales Service Monthly Routine
Ongoing valuation process ‒ Team meetings
of stores results Conversion rate ‒ Best practices sharing
‒ Metrics definition for the
following month
Average price
Volume
Supply Variables analised DC for
management regional
Monitoring each product
performance and store’s
Product
Flow
Inventory
level
Average
mark-up
+ replacement
(SP)
inventory level
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11. 3 - PDCA applied at retail management
Exemple on how to use management tools for sales management
Sales vs Metrics 1º Why 2º Why Recommended actions
Average price Analyze handbag display
Increase accessories at POS
Average Ticket X
Analyze store’s size-run
Items per
service Team incentives/motivational
Sales X compensation
Traffic Cash management training
Essentials/Classic training
Service X
Conversion
rate
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12. 3 - PDCA applied at retail management
We count on a dedicated structure aiming fast implementation of our action plan
at owned stores
Responsabilities
Operating Point of sales metrics
Manager Monthly meetings with sales team
Weekly analysis of stores productivity (revenues)
Weekly analysis of stores, by cluster
Owned Stores
Coordinator Metrics breakdown by store
Elaboration of action plan at stores with weak performance,
together with sales manager
Sales Daily metrics for sales team
Manager Performance monitoring of the sales team
Training and team management aiming achieve sales goals
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13. 3 - PDCA applied at retail management
Retail extension based on franchisees integration, which apply the best sales
practices, supported by a commercial team composed by 46 consultants
Successful partnership: “win-win” Constant support by consultants to franchisees
Intense retail training
3 Consultants
8 stores per consultant
Team distribution among main sales clusters 7 Consultants
Consumer proximity
Solid relationship and support to each franchisee
Franchise Business
Management
4 Consultants
CMG and CO
South Region Interior SP Regional NE Region
Regional 24 Consultants
Coordinator Coordinator Coordinator
Coordinator
RJ and ES Region SP Metropolitan Area N Region
Coordinator Region Coordinator Coordinator
8 Consultants
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14. 3 - PDCA applied at retail management
Sales assistance also counts with other metrics/tools to support the franchisees
retail management
IAF - Instrument of Franchisees Management (planning, objectives and metrics)
Performance monitoring – sales score and flow reports
On line Promoter - Monitoring system for consultants follow-up
Show Room Web – Open and closed size-run (right product at the right time)
Shopping experience analysis: Hidden Client
Manuals of visual merchandising – simultaneously applied throughout Brazil
Arezzo Classic - automatic reposition of sold-out sizes
Trianon project - standardized shipment for hot and cold regions
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15. 3 - PDCA applied at retail management
96% of the current franchisees indicated they would be interested in opening a
franchise if they did not already have one
Best Franchise in Brazil and in the sector Satisfaction of Franchisees
for 7 years (since 2004) Current franchisees answer when asked if they would open a franchise it they
did not have one
Excellency in Franchising Award in the
last 8 years (ABF)
96% satisfaction of franchisees 1
95.7%
86.0%
0% lost on receivables
2008/2009 2009/2010
Notes:
1. 96% of the current franchisees indicated they would be interested in opening a
franchise if they did not already have one (Source: Arezzo&Co)
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