Managing Market Driven Innovations: the Zucchi Experience Innovations in Home Textiles

1. Managing Market Driven Innovations: the Zucchi Experience Innovations in Home Textiles Home Fashion India Week 07 November 29-30, 2007 Mumbai

2. Agenda • Zucchi Group – quick snapshot • Sources of Innovations • Innovation department

6. Italy France 27% 51% 22% Other countries Zucchi Group – Sales by geographic area - 2006 Consolidated Turnover 300 mln €

7. Hometextile products Company brands 87% 87% 10% 3% 7% 6% Printing&dyeing for third parties Yarn and greige fabric Private labels Licenses & designer labels Zucchi Group – Sales by Business Areas & Brands – 2006

8. Traditional Others 12% (Retailers/wholesalers) 26% 25% 37% Retail Big retailers and mail order Zucchi Group – Distribution Channels - 2006

9. Zucchi Group – International Markets & Brands NORTH EUROPE Zucchi Bassetti Descamps RUSSIA Zucchi Bassetti U.S.A. Lacoste EST EUROPE Zucchi Bassetti Descamps Jalla ASIA Bassetti MIDDLE EAST Zucchi Bassetti Jardin Secret Descamps GRECE Zucchi Bassetti Laura Ashley Lacoste “domestic” markets Subsidiaries Other markets

10. Sources of Innovations • Suppliers • Production Technologies • IT • Distribution • Processes & Organization • Customers

11. Sources of Innovation - Suppliers • We buy: • Fibers • Yarn • Grey cloth • Finished fabrics • Made up products and we have people that try and look for innovations in all those stages

12. Sources of Innovation - Production Technologies • We manage: • Spinning • Weaving • Finishing • Confection and we have long term relationships with equipment producers in Europe. By investing on a continuous base we try and catch innovations coming from new technologies.

13. Sources of Innovation - Production Technologies • We manage: • Spinning • Weaving • Finishing • Confection and we have long term relationships with equipment producers in Europe. By investing on a continuous base we try and catch innovations coming from new technologies.

14. Sources of Innovation – IT • We manage: • Spinning • Weaving • Finishing • Confection and we have long term relationships with equipment producers in Europe. By investing on a continuous base we try and catch innovations coming from new technologies. • IT: in last 5 years we renewed all the systems from the plants to the shops

15. Sources of Innovation – IT • We manage: • Spinning • Weaving • Finishing • Confection and we have long term relationships with equipment producers in Europe. By investing on a continuous base we try and catch innovations coming from new technologies. • IT: in last 5 years we renewed all the systems from the plants to the shops

16. monobrandshops retail excluding corner/SIS Other Counties 32 Spain 29 Descamps; 94 Bassetti; 114 Italy 174 France 76 Zucchi; 43 Sources of Innovation – Customers • 251 monobrand shops (Zucchi, Bassetti, Descamps), of which: • 100 directly owned • 36 multibrand shops, of which: • 12 directly owned • 24 Outlets (directly owned) • 400 corner/SIS

17. Innovation Department • On may 2006 we set up a Central Innovation Department for the Goup Materials ProductTechnologies Customers existing marketsnew markets ProductServiceDistribution Distribution &POS ProcessTechnologies BusienessModels Processes &Organisation InformationTechnology

18. Innovation Department - How does it work KeyCustomers Research Centers External environment Innovation Department is a qualified “nucleus” that acts in a network linking internal and external environment to adress new opportunities and to transform them into projects. It also manages those projects in order to bring them to the market. Suppliers Internal Environment Universities Designer