Four Aces

1. Four Aces A Comparison of Two Retail Clothing Stores

2. Presentation Outline • Company History Overview – Adriane Samaan • Four Aces – Dyani Berman • Wet Seal • SWOT – Lisa McGarry • Store Atmospherics – Viola Smith • Clothing – Viola Smith • Target Market – Mirela Bazaj • Advertising/Promotions – Mirela Bazaj • Arden B • Intro – Dyani Berman • Strengths – Adriane Samaan • Weaknesses – Dyani Berman • Opportunities – Adriane Samaan • Threats – Dyani Berman • Atmospherics/Advertising – Sarah Groth • Financial Overview-Viola Smith • Conclusion – Adriane Samaan

3. Company History Overview • Mid 60’s, Tiny bikini Shack in Newport Beach, CA • Privately Owned by Lorne Huycke and His Wife • Swimwear Show Motivated Owners to a New Name and New IdentityWet Seal • 70’s, Product Offering Expands to Meet Demands and Tastes of Young Fashion Savvy Women • 70’s, Location Expansion to a Dozen Retail Locations • 80’s, Group of Management Employees Collaborate and Purchased Wet Seal and Added Six New Locations • 1984, Sold 18 Prime Locations to Suzy Shier, Inc. to Raise Capital for Future Growth

4. Company History Overview (Cont.) • 1990, Wet Seal Completed an Initial Stock Offering That raised the Funding Necessary for Expansion • 1995, Wet Seal Acquired 237 Contempo Casual Stores from Neiman Marcus Group • 1996, Secondary Public Offering of 5,347,500 Shares at $13.33 per Share • 1998, Wet Seal Acquired Leases, Furniture and Fixtures for 19 Stores from Mother’s Work • 1998, Arden B. Introduced • 1999, Websites Launched • Acquired Leases, Furniture and Fixtures for 18 Zutopia Stores from Gymboree, Inc. • 2001, Contempo Casual Stores Converted to Wet Seal • 2002, Venture Into Cosmetics

5. Four Aces Zūtopia Contempo Casuals Wet Seal Arden B.

6. Zūtopia • Who Are Tweens? • 5-12 Girls Stuck Between Finally Fitting Into Older, Hip Clothes and Moms Who Still Want Them to Wear Pink Bows. • Zūtopia is the Trump Card for Fashion-Savvy Pre-Teen Girls Who Want to Play it Cool.

7. Contempo Casuals • As Wet Seal’s Fun and Forward Sister Store. • Our 19-35 Yr. Old Customers Will Continue to be in Their Element With Dressy to Casual, Business to Funky and Basic to Trendy.

8. Wet Seal • Become the Dominant Fashion Brand for Girls 13-25, Wet Seal is Counted on to Offer Everything From Elegant to Comfy and Everything Edgy in Between.

9. Arden B. • Fashion-Driven, Lifestyle-Orientated Shopping Destination for Contemporary Young Women 20-35.

10. Wet Seal – S.W.O.T. • Strengths • Fashion Savvy Affordable Pricing • One Stop Shop • Private Label and Branded • 456 Stores • Weaknesses • Clothing May Be Risky and Parents May Not Encourage Purchases. • Successful Company, Not Too Many Weaknesses

11. Wet Seal – S.W.O.T. (Cont.) • Opportunities • Focus On Increasing Traffic In Stores and Brand Awareness • Expand to Free Standing Stores (Outside of Malls) • Become Destination Stores With Exclusive Brands • Strive to Reduce Customer Dissonance • Threat • Other Mall Specialty Stores That Offer Similar Clothing Types

12. Wet Seal - Store Atmospherics • Fun, Youthful Feeling In Stores • Three TVs With Pop Concert • Bright Track Lighting • Loud Music • Industrial Look

13. Wet Seal - Clothing • Trendy, Affordable, Youthful • Branded and Private Label • Complete Ensemble Coordination

14. Wet Seal - Target Market • Generation Y • 13-25 • Mainstream Malls • Trendy, Fashion Forward Consumers • Affordable For the Budget Conscious Young Woman

15. Wet Seal Advertising and Promotions • Magazine, Website Advertising • Seventeen • Inside Store Sale promotions • BOGOs • Customer Loyalty Program • $10 Fee • 15% Off Purchases for a Year • 20% on Your Birthday

17. Arden B. • Introduced as a Retail Concept by the Company in November 1998 • Arden B. Stores Open in the “A” Malls • Arden B. Offer a Collection of Fashion Separates and Accessories for all parts of Their Customer’s Lifestyle; Everyday, wear-to-Work, Special Occasion and Casual, all Under the Arden B. Brand Name

18. Arden B. - Strengths • Multiple Unit Sales/One Stop Shop • Fashion Savvy and Affordable Pricing to Target Market • Capitalized on Market Niche Otherwise Limited to Department Stores • Corporate Owned, No Franchising • Small Screen Endorsements • Will and Grace • Entertainment Tonight • European Designs/Custom Arden B. Private Label • Develop a Fashion Information Exchange With Buyers, Designers and Sales Staff to Provide a Communication Infrastructure • Separate Buying Teams

19. Arden B. - Weaknesses • Limited Locations • 82 Stores • No Customer Loyalty Programs

20. Arden B. - Opportunities • Debt Free • Could Invest in Test Stores • Contests and Sponsored Events Bring About Notoriety and Increase Brand Equity and Loyalty • Become Destination Stores With Exclusive Brands

21. Arden B. - Threats • Other Mall Specialty Stores With Loyalty Programs • Express • “A” Malls Have Intense Comparable Competition

22. Arden B. – Store Atmospherics • Overall Atmospherics • Soft, Feminine, Flirty, Fun, Sophisticated, Exclusivity • They Achieved This By: • Color • Lighting • Music • Layout

23. Arden B. - Advertising • Market Strategy • Market Follower-plus-Product Category is Late in the Life Cycle = “Market Share Strategy” • Promotional Strategy • Pull Strategy • Advertising Strategy • Frame-of Mind • Target Behavior • Brand Preferences • Brand Perceptions • Creative Strategy • “Holistic Information Processing” Theory • Transformational Ads

24. Financial Overview (In Millions) • Net Sales • 1998/$485 • 1999/$524 • 2000/$580 • Net Income • 1998/$26 • 1999/$14.2 • 2000/$19.5 • Net Income per Share • 1998/$1.91 • 1999/$1.11 • 2000/$1.54

25. Conclusion • In EST Retailing • Hot-EST – Fashion • Easy-EST – Service • Customer For Life • Establish Brand Loyalty/Store Loyalty • ZūtopiaWet Seat/Contempo CasualsArden B. http://www.wetseal.com