2. The Arezzo brand accounts for 60% of the Company’s gross revenue
Brand Overview
Update
2
O F MB EX
Trendy
New
Easy to use
Eclectic
16 to 60 years of age
R$189.00/pair
R$716.7 million
59.5%
Brand profile
Target
Female
Public
Sales Volume 3
% of Gross
Revenue 4
Price at Point
of Sale
Inception 1972
Distribution
Channel
POS1
% Gross
Rev.2
17 332 994
72% 15%12%
14
1%
Top-of-mind brand in the sector, among the 30 most valuable
Brazilian brands
Points of sale homogeneously distributed throughout the country
Largest women’s footwear chain in Brazil
Continuous focus on product innovation
Improvement of the stores’ layouts, with a high level of
acceptance from clients
Notes:
1. Points of Sales (2Q13); O = Owned Stores; F = Franchised Stores; MB = Multi-brand Stores; EX = Exports
2. % of gross revenues (FY 2012)
3. 2Q13 (LTM) gross revenues, internal market only: does not include other revenues (not generated by the brand)
4. % of total gross revenues (2Q13 LTM)
3. The development of Arezzo, the Company’s flagship brand and the leading
brand in Brazil’s women’s footwear market, has been marked by making the
right changes at the right time
1970s
1980s
1990s
From 2000 to 2013
Founded in 1972, focused on
product development and
branding, with the launch of
its first iconic model.
Verticalized manufacturing
model.
1.5 million pairs per year
In 1989,
first
franchise
Inaugurates its 1st flagship
store on Oscar Freire - SP.
Transfer of R&D and
outsourcing of production in
the Vale dos Sinos region.
Strong communication and
marketing strategy
Innovative store concept with a camelion
design and expansion of the distribution
channels
Owned Stores
Franchises
Multibrand
stores
Consolidating the
position as the
market leader
17
332
994
Fast Fashion
7 to 9 collections
a year
Awarded the Best
Franchise in Brazil
Arezzo
History: Evolution of the brand
5. 5
2014 Summer Campaign
Multiple contact points in order to strengthen the brand and product identity
Print and online media advertising in all of the country’s State capitals
+ 77 pages and 27.322.620 readers + 3.167.463 audience
Brand Update
Sell-out initiatives
Initiatives to attract consumers to the stores and strengthen the brand
6. 6
Brand Update
Sell-out initiatives
Promote the brand as an icon in the most
relevant Fashion Editorials
Online Media: broad communication
strategy, going beyond the product
Brand exposure during several moments
and interfaces with consumers
Strengthen the Fast Fashion identity
through specialized media
New institutional website
Daily posts with fashion trends, products
and lifestyle
Partnerships with bloggers and tastemakers
Promote the brand in websites of influent
journalists
High-profile fashion editorials (E.g.. Harper’s
Bazaar Brasil and Vogue Brasil)
Initiatives to attract consumers to the stores and strengthen the brand
7. 7
Brand Update
Sell-out initiatives
MOB PARTY: Summer invaded Arezzo on
August 6th Store Windows: the brand’s greeting card
Weekly renovations to constantly
stimulate consuming desires
Synchronized collection changes – higher
impact and anticipating competitors, with
high brand exposure in social networks
Initiatives to attract consumers to the stores and strengthen the brand
8. 8
Trainning in Fashion and
Retail
Support material for
sellers
Retail operation manual
Tranning Motivation Action
Monthly motivational sales
campaigns
Individual goals evaluated
National Sales Convention
Supporting sales material
(e.g. Pocket Arezzo)
POS campaigns to
stimulate consuming
Each selling opportunity has to be treated as unique: it must not be
wasted
The team needs to
be prepared,
Motivated in
acheiving its
goals,
And with the right
tools at hand
Focusing on conversion through the use of consuming stimulation techniques
Brand Update
Sell-out initiatives
9. 9
Loyalty initiatives in order to strengthen the relationship with consumers and
promote unique purchasing experiences
Brand Update
Sell-out initiatives
After Sales
Targeted actions
Structured telemarketing
Christmas CRM Campaign
CRM Program
Updated mailing
Client profile registration
10. 10
New strategy offers a better feedback from the stores’ sell-out, higher best-
seller frequency in stores and more assertive collections
Arezzo
Innovative supply-chain structure
Collection strategy
1
2
3
Sell-out focus
New sell-in dynamics with a suggested purchase
map results in a faster process, allowing an even
greater focus on sell-out initiatives
Supply-chain flexible to the fashion profile
Collection quantity and frequence consideres the
product’s life cycle, with higher availability of best-
sellers
More assertive collections
Agility to incorporate sell-out information in store
restocking and product development enhances the
efficiency of collections.
11. Arezzo continues to strongly invest in processes in order to detail procurement
development and planning
11
P
R
E
Planning the collection
Revising the collection
Editing the collection
Planning the Volume
V
Predicting trends, in order to assure
collection assertiveness
Predicting volumes, in order to identify the
size of the ideal procurement for each store
Prevent remarking, in order to elevate the
average mark-up of stores
Prevent inventory shortage, in order to
increase sales volumes
Arezzo
PREV Process = More assertive collections
12. Product life cycles are now planned according to the fashion content that they
present
12
Arezzo
Flexible supply-chain
Life cycle
Collection
Continuables
Classic
Showroom
Fashion
supplement
Fast fashion
Continuables
Classic
Supply chain model
Major collection changes, with higher fashion
content, presented in runway shows
Supplements based on recent fashion
information, offered through an e-showroom
Automatic replenishment of best sellers and
their variations based on sell-out feedback
Selection of existing models with a good
historical sell-out performance in the colors of
the collection for automatic replenishment with
an open size run
Products with a good sales and turnover track
record for automatic replenishment with open
size run
13. The new model for serving franchisees enables them to access a greater
number of products in a shorter time, reducing procurement lead time
13
Showroom parade dynamic enables
a greater number of shoes and bags
to be evaluated
Procurement map enables franchisee
to monitor the mix of products
purchased for their store
Suggested procurement according
to the profile of each franchisee
store
Attention to related products and the
creation of procurement maps result
in collections balanced among
themes, categories and price
marking
Arezzo
New showroom = Focus in the sell-out
14. The e-showroom allows the franchisee to build their store more quickly and
more assertively, since they are familiar with the entire collection
14
Theme book
Related products
Product features
Procurement map by
category and price
All information required by the franchisee is
provided before the procurement process
begins
Familirity with all products in the collection
Purchase by category and price range
Monitoring the store’s map during the
purchase
More time available for the franchisee and the sales team in the physical stores
Greater savings and comfort when presenting smaller collections
The purchasing experience is very similar to the physical experience
Arezzo
Fashion complement + E-showroom
15. 100
121
0
50
100
150
Models in the
collection
Same models with
automatic
replenishment
Weekly Sales / SKU2
Basics Products with automatic replenishment assure the availability of best-
sellers, enhancing full-priced sales
More then 20% of growth in
weekly sales
21%
MAINBASICSMODELS
Arezzo
Basics
16. 16
The changes resulting from GTM Arezzo have started to yield positive results
Accelerated growth in handbag sales, due to a better product mix
improving average prices
Basics Products with automatic replenishment with better then
estimated performance
Greater markup performed by stores during collection changes
Elevated franchisee satisfaction with the new sell-in model
Arezzo
GTM Results
17. Successful partnership: “win-win” Concentration of Franchises per Operator
5 year contracts with na average Payback of 40
months2
0% non-performing receivables
96% of satisfaction from franchisees1
Franchising Excellence Seal de Excelência for the last 8
years (ABF)
Best Franchiser in Brazil (2005) and of the segment for
7 years since 2004
4 or more
franchises
1 franchise
2 franchises
3 franchises
49%
10%
27%
15%
(Number of operators per number of Franchises operated)
17
Notes:
1. 96% of current franchisees mentioned they would open an Arezzo
franchise in case they weren’t currently franchisees
2. Annual Turnover of R$2.330 mil + average initial investment of R$ 600 mil
+ working capital of R$ 414 mil
Intensive retail training
Constant support: 6 stores per consultant on average and 22
visits per store/year
Solid relationship and constant support to the franchisee
Mono-branded franchises strengthen the brand in the cities
they are located
Arezzo
GTM Results
The GTM Arezzo project is a new step in the healthy relationship
Arezzo&Co sustains with its Franchisees
18. Arezzo
Architectural designs
Arezzo’s new architectural design highlights our products even more
18
With new shelves and niches,
we were able to increase in 50%
the number of models
exposed in the stores
Window relate to the pattern
used on our products’ soles,
forming the brand’s “ZZ”
symbol
Suspended shelves around
the entire store with lights
that highlight the products
Products highlighted in the
center of stores
Next to the cashier, a
dedicated shelf for
appliances allows us to add
units to the sale
A better distribution of the
furniture offers more
comfort for clients in the
stores
19. 24 Arezzo brand stores are to be expected in the new architectural design for
2013
19
Key
Opened
Being developed
Shopping Iguatemi -SP
Diamond Mall - MG
Aldeota - CE
Shopping Goiabeiras - MT
Ilha Plaza - RJ
BH Shopping - MG
Shopping Moinho dos Ventos - RS
Shopping Natal - RN
Praia do Canto - ES
Pátio Batel - PR
Shopping Buriti - GO
Iguatemi Ribeirão Preto - SP
Manauara Shopping - AM
Araras - SP
Plaza Niterói - RJ
Ipatinga - MG
Rua Catalão - GO
Salvador Shopping - BA
Shopping Metropolitano - RJ
Ariquemes - RO
Shopping Ibirapuera - SP
Cadima Shopping - RJ
Shopping Morumbi - SP
Shopping Anália Franco - SP
Arezzo
Architectural designs
20. New architectural design of the store on Rua Oscar Freire in São Paulo
20
Arezzo
Architectural designs
Digital
communication
allows us to show
marketing campaigns
inside the POS
Highly impacting
project reinforces the
identity and
positioning of the
brand
250 m² - largest
store of the brand
Larger and better
exposure of shoes
and handbags
