Franchise System

OV E R 6 0 YEARS O F RETA I L EX PERI EN C E

INTERNATIONAL FRANCHISE SYSTEM As one of the most recognised multi channel fashion retail brands in the UK, River Island offers a franchise system which allows international partners access to a retail store model which covers all aspects of marketing and operating the River Island fashion brand in their country.

Delivering a consistent”on brand” customer experience is critical to the success of every River Island shopping experience. Therefore all River Island owned and franchisee stores are designed and operated to exactly the same design and operating specifications.

River Island is a company that is passionate about fashion and works continuously to improve and deliver a brand experience with its own unique and distinctive personality.

River Island works hand in hand with the franchise partner from the start of the process, right through to the day to day operation of the stores.

The River Island franchise system is based on over 60 years of retail experience and delivers a “turn key” retail business solution backed by a comprehensive support network that covers all aspects of retail from store design and stock management through to store operations and support.

The River Island franchise system allows our customers wherever they are in the world to enjoy a unique and consistent shopping experience. At the same time it allows our franchise partners to do what they do best and focus on maximising sales, whilst always knowing that there is a full support network behind them at all times.

RIVER ISLAND WILL WORK WITH THE FRANCHISE PARTNER TO DELIVER: • Commercial assessment of potential store locations.

• Store design ( in house team) to achieve optimum space and fashion layout.

• Store fit out with on site project management assistance.

• Selection and extensive training of store management teams.

• Store operational procedures and standards.

• Visual merchandising training and on going support.

• Ideal opening stock packages to suit market requirements.

• On going stock replenishment and new collections.

• PR and Marketing support and guidance.

• A consistent brand experience for our customers.

RIVER ISLAND EXPECTATIONS FOR A FRANCHISE PARTNER: • Generally a company with proven experience in retail distribution and ideally in fashion.

• Sufficient financial resources with requisite management skills to develop and operate the River Island Brand in the market for which the franchise licence is granted.

• A strong knowledge of the local market and the ability to secure the right fashion locations and terms to operate River Island stores.

• Commitment to protect and deliver the River Island brand values consistently for their market.

STORE LOCATIONS AND REQUIREMENTS: • R iver Island stores must be located in the main fashion streets or shopping centres.

• M ust be in close proximity to the right fashion contemporaries.

• L ocated in urban centres with a population of at least 100,000 inhabitants.

• S tore size is determined by the size of the market opportunity and on a store by store.

• F ront Facade 10-15m split frontage. With return frontage not preferred.

• 3 .0 metres minimum over head height for trading space. 5.5 metres minimum for Mezzanine trading.

• S tock room space will vary to store size and width of ranges carried by each store .eg. Footwear, Non clothing.

FINANCIAL & OPERATIONAL CONDITIONS • All store costs, real estate investment, legal costs, personnel costs, administration costs etc, are the responsibility of the franchisee.

• Selling prices and Royalties are calculated to a standard formula, but some adjustments may be required depending on the specific conditions within each country.

• Stock is received by the Franchisee on an ex works basis.

• Stock costs and Royalties are guaranteed by Letter of Credit.

• River Island’s franchise data exchange systems allows the provision of information to and from a franchise partner.

Franchise partners will be required to either adopt the River Island Data Exchange System in its entirety or adapt their existing systems to ensure the capability to process inbound and outbound data for both POS and central merchandising systems is in place.

BRAND MARKETING Our in house marketing team works throughout each season with all our retail partners to develop an exciting programme of marketing events and activities. These activities are tailored to the local markets but must always remain in keeping with the personality of the River Island brand.

OUR STORE MODELS FLAGSHIP: • 1000m2 – 1500m2 retail trading surface + additional approx 20% non selling surface.

• Usually over two levels ground + mezzanine floors.

• Metropolitan or major capital cities.

• Premier fashion locations with high footfall • Will carry full ranges in all fashion categories.

A GRADE • 500m2 -650m2 retail trading surface + additional approx 20% non selling surface • May be over two levels – ground + mezzanine floors • Premier or minor capital cities.

• Premier fashion locations with high footfall • Will carry edited ranges in most fashion categories.

B GRADE • 300m2 retail trading surface. + additional approx 20% non selling surface.

• Ground floor trading only.

• Secondary city locations or smaller urban centres • Option A : Stand alone range e.g. ladies only • Option B : Stand alone range with small secondary range

C GRADE (under development) • 150m2

– 200m2 retail trading surface + additional approx 20% non selling surface.

• Secondary

and Tertiary urban locations • Non

Clothing, Footwear or Kidswear only.

• Small

ladies only “Premium” fashion stores.

This document is produced by River Island Clothing Co.Ltd, Chelsea House, Westgate, London W5 1DR, England (‘River Island’).

EXCLUSIONS The contents of this document are for general information only, may have different application according to country and do not constitute an offer or contract from River Island.

The document and its contents are believed accurate as of the date of printing.

River Island excludes all representations, warranties, conditions and terms, whether express or implied, to the fullest extent permitted by applicable law.

River Island shall not be liable for any loss or damage arising from the use of or reliance on any information or content provided by this document. ©COPYRIGHT River Island Clothing Co.Ltd 2011. All rights reserved.

Except as expressly permitted by applicable law, no part of this document may be reproduced or transmitted in any form or by any means, or stored in any retrieval system, without the prior permission of River Island.

TRADEMARKS River Island, Chelsea Girl, Lewis Separates, Style Insider, Holloway Road and RI are trademarks of River Island.

Certain other names and marks used in this document are trademarks of third parties.