INTRODUCTION TO FOOTASYLUM July 2017 FOOTASYLUM
PLC BOARD Extensive retail experience amongst Executive and Non-Executive Board members EXECUTIVE TEAM NON-EXECUTIVES Stephen Robertson Brendan Hynes Clare Nesbitt Danielle Davies John Wardle *Barry Bown Independent Non- Independent Non- Chief Executive Officer Chief Financial Officer Executive Chairman Executive Chairman to June 2018 from June 2018 Executive Director Executive Director Chairman of Chairman of Audit Remuneration Committee Committee * Barry Bown ▪ Joining company in a consulting role prior to formal appointment to the board 2
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FOOTASYLUM OVERVIEW Dynamic business with a differentiated proposition led by experienced retail operators STORE OPENING HISTORY ▪ Established UK retailer bringing on-trend lifestyle fashion to our store estate 70 customers 60 # stores at period end ▪ Target market is the 16-24 year old fashion-conscious consumer 50 40 ▪ Founded by David Makin in 2005 and joined by John Wardle in 30 *65 56 44 2008 – original co-founders of JD Sports 20 34 30 28 23 10 21 14 2 7 10 ▪ Multiple routes to market 0 as of FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 30/12/17 5 Nascent 65* wholesale dedicated stores arm websites KEY FINANCIALS 160 12 140 ▪ Strong financial track record 10 120 Revenue (£m) 8 EBITDA (£m) 100 ▪ Proven store roll out model 80 6 147.0 60 ▪ Strong eCommerce sales growth 110.4 4 40 83.2 78.0 61.1 2 ▪ Multi-faceted, well funded growth strategy 20 - - FY15 FY16 FY17 H1'17 H1'18 Revenue (LHS) EBITDA (RHS) • Revenue in 44 weeks to 30 December 2017: £173m (2016:£128.4m), an increase of 34.7% * 63 of the stores are core Footasylum fascia as of 30 December 2017 4
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KEY STRENGTHS YOUTHFUL AND RELEVANT CULTURE AND FOCUS YOUTHFUL, ON-TREND FOCUS • Trend-leading – continuously identifies and drives emerging trends ▪ Trend-leading – continuously identifies and drives emerging trends • Genuinely understands the core 16-24 year old customer base ▪ Strong understanding of the core 16-24 year old customer base SYMBIOTIC RELATIONSHIPS SYMBIOTIC RELATIONSHIPS • A key route to market for global and local brands ▪ A key route to market for global and local brands • Enjoys preferential status as a key partner for major brands ▪ Enjoys favourable access to product as a key partner for major brands PERPETUAL ENTERTAINMENT CUSTOMER ENGAGEMENT ▪ • Engages with customers across multiple channels, enhancing customer experience Multichannel engagement, thereby enhancing the customer experience ▪ Projecting the Footasylum brand (our “DNA”) across both high street and social media • Projecting the Footasylum brand (our “DNA”) across both high street and social media CLEAR, FUNDED GROWTH PLAN ▪ Investment in eCommerce platform ▪ Strategic rollout and upsizing ▪ Wholesale distribution opportunities 6
Competitive Landscape
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COMPETITIVE LANDSCAPE Compelling and differentiated proposition Young Important 16-24 y/o 71%* 58%* and channel for target revenue revenue fashion brand audience menswear footwear conscious partners FOOTWEAR FOCUSED BOTH APPAREL FOCUSED * FY17 data 9
The Products
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PRODUCT PORTFOLIO Footwear is the dominant category with apparel and accessories delivering strong growth both in absolute terms and share of revenue 32% 46% 43% ACCESSORIES FOOTWEAR APPAREL CAGR CAGR CAGR of total revenue of total revenue of total revenue 62% 63% 58% 34% 34% 38% 4% 3% 4% 60 90 7 80 6 50 70 5 Revenue (£m) 40 Revenue (£m) Revenue (£m) 60 4 50 30 85 57 40 3 6 70 30 20 38 2 4 49 20 3 26 10 1 10 - - - FY15 FY16 FY17 FY15 FY16 FY17 FY15 FY16 FY17 Revenue Revenue Revenue ▪ A broad product range provides flexibility and optionality ▪ Higher margin apparel and accessories increased in overall share over the three years to February 2017, accounting for 42% in FY17 ▪ Strong growth across categories reflects Footasylum’s ability to identify and deliver in-demand product 12
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PRODUCT PORTFOLIO Well balanced product range with no overreliance on any particular SKU FY17 REVENUE BY SKU Target customer audience segmented into six key tribes* 100% ▪ age 90% ▪ style 80% ▪ brand preferences 70% Well balanced product range with no overreliance on a particular SKU 60% Top 1,000: 55% % revenue 50% Strategically important long tail of low-volume products Top 500: 41% 40% 30% Localised strategic positioning in order to satisfy local demand 20% Top 100: 18% Serves predominantly menswear albeit increasing focus on women 10% Top 20: 7% and children - supported by closely aligned key brands - ▪ The first women’s only Footasylum store launched in Leeds in 2017, followed by Manchester and Cardiff * “Tribes” is an internal reference for subcategories within Footasylum’s target audience. Each tribe is defined by a set of individual characteristics as regards age, style and brand preference 14
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THIRD PARTY BRANDS Increasingly strong relationships with core brands, with growing access to new product and volume FY17 REVENUE BY BRAND circa 300 brands Sells c.300 brands across the year 100% ▪ Leading global brands Top 50: 96% of revenue ▪ A long tail of up-and-coming, local brands Top 20: 85% of revenue ▪ Own brands % cumulative revenue 75% Sells “on - trend” fashion – brand composition evolves over time Top 5: 61% of revenue to drive trends with appropriate product focus ▪ e.g. rise in popularity of athleisure has driven a significant 50% increase in Nike and adidas footwear Top 1: 27% of revenue Footasylum proactively manages key supplier relationships (including Nike and adidas who accounted for c.50% revenue in 25% FY17) SELECTED BRANDS Incubating upcoming brands e.g. Gym King 16
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OWN BRAND AND WHOLESALE Footasylum aims to be a pioneer of fashion trends by leveraging in-house expertise SELECTED OWN BRANDS In-house developed own brands address trends and augment third party branded ranges ▪ In-house design function facilitates shorter lead times from concept to shop floor ▪ Manufacturing partners in Turkey, China, Hong Kong and Dubai DISTRIBUTION CYCLE OF OWN BRANDS Launched dedicated wholesale platform in March 2017 Social and direct Footasylum ▪ Distributes Footasylum’s established stable of own brands Wholesale to consumer group ▪ Long term value creation opportunity GRANT “EXCLUSIVE” CREATE BRAND ESTABLISH BRAND STORY AND ACCESS TO Lower gross margin / higher contribution model compared to LONGEVITY FOLLOWING FOOTASYLUM retailing Kings Will Dream first own brand to be distributed wholesale ▪ Contract signed with ASOS ▪ 89 agreements in place as of 25 January 2018 Substantial opportunity 18
Routes to Market
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STORE ESTATE AND ROLLOUT Proven store rollout model and track record of executing successful store openings within the current infrastructure EXISTING STORE ESTATE STORE ROLLOUT 65* - strong store estate (63x Footasylum, 1x Drome and 1x Scope for at least 150 stores in the UK 7Liverpool) Target store profile: Management targets payback inside 24 months ▪ 3,000 sq.ft. to 10,000 sq.ft. ▪ Average since FY15: 18 months ▪ Key cities, malls, mega stores ▪ Eight to ten stores per annum Store sizes vary from 1,450 sq.ft. to 9,400 sq.ft. selling space Regimented and thorough new store appraisal process Predominantly high street locations ▪ Healthy pipeline of new properties plus up-sizes and refits of existing stores ▪ As of 30 December 2017, 9 stores opened FY18. * as of 30 December 2017 Ongoing refurbishment programme targeting: STORE CATEGORIES ▪ Opportunity for 15-20 upsizes within existing estate ▪ Recent Leeds upsize has outperformed expectations Regional Major city Secondary city ▪ Womenswear presents growth opportunity shopping centre 15 stores 9 stores 12 stores Town Retail park 21 stores 8 stores 21
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STORE PERFORMANCE Strong-performing store estate All stores opened since inception (except Oxford Street, London and the first ever store in Wilmslow) provided a positive contribution in FY17* FY17 REVENUE PER STORE Immature stores FY17 CONTRIBUTION PER STORE Immature stores *Mature stores only 23
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