EXANE BNP / PROMISE CONSULTING1

Luca SolcaManaging Director, Sector Head Global Luxury Goods at Exane BNP Paribas

MBA graduated magna cum laude from SDA Bocconi in Milan in 1990, Luca Solca began his career inconsulting, Booz Allen & Hamilton and The Boston Consulting Group where he attained the rank ofpartner. He counted among its clients luxury companies and retailers throughout Europe. In 2002, hebecame head of the Italian luxury group Ittierre, of which he oversees the restructuring andrefinancing. Since 2005, he follows the retailing and luxury sectors, first for the research firm SanfordC. Bernstein and then for Crédit Agricole as director of research. He joined the brokerage, researchand asset management Exane BNP Paribas in 2012, where he is managing director in charge of theluxury sector. Over the past five years, he was voted # 1 analyst for the luxury sector by institutionalinvestors during the three years he covered the area (2011, 2014 and 2015).

Philippe JourdanAssociate Professor and Managing Director, Luxury Lab, Promise Consulting

Graduated from HEC in 1988, PhD in Management Sciences and Associate Professor, Philippe Jourdan isalso the managing director of Promise Consulting, a market research and consultancy firm, where theoversees the surveys in the luxury sector. He teaches at the University of UPEC (Paris), publishes inacademic journals on the brand valuation issues in the luxury, cosmetics and selective retailing sectorsand he is the editor-in-chief of the French Journal of Marketing (“Revue Française du Marketing”). He isat the origin of a the methodology Monitoring Brand Assets®, a strategic tool for optimizing the brandvalue from the customers‘ perspective, which was awarded the Silver Trophy for the quality of itsdeliverables at the Printemps des Etudes, 2016.

LUXURY IN THE USABarometer Promise Consulting – Exane BNP

EXANE BNP / PROMISE CONSULTING2

LUXURY IN THE USAAbout us in short

Promise ConsultingMarket research and consultancy firmSince 2000, Promise Consulting’s commitment remained unchanged: helpdecision makers make the right decisions, in order to strengthen the bondbetween their brands and their customers and maximize their Return Onmarketing Investment thanks to our tailor made support and consumer studies.

Exane BNPInvestment company specializing in three businessesCash equities: Exane provides institutional investors with a range of services,such as research, sale and execution on European equities.Derivatives: Exane Derivatives has built a robust structured products franchise,based on its longstanding leadership in European convertible bonds and options.Asset management: the asset management arm of the Exane Group is embodiedby its 2 asset management companies, Exane asset management and EllipsisAM, based respectively on the equity and fixed-income universes.

EXANE BNP / PROMISE CONSULTING3Source: Luxury Goods Worldwide Market Study, Reuters, 2016

$4

24%

+1% or +2%

€237

SHOESREADY-TO-

WEAR(WOMEN)

READY-TO-WEAR(MEN)

JEWELRY WATCHESLEATHER GOODS

FRAGRANCES COSMETICS

2013 13 26 26 13 36 36 20 23

2014 14 26 26 14 36 38 20 24

2015 16 30 29 16 38 43 23 27

4% 2% 2% +6% -6% 2% 2% 1%

+6%

+16%

+5%

+14%

+3%

+14%

+8%

+18%

0%

+7%

+2%

+11%

+2%+1%

+13% +15%

GLOBAL PERSONAL LUXURY GOODS MARKETPersonal luxury goods market includes several segments, of which growth is rather heterogeneous

Weight

YoY growth

at constant

exchange

rates

2015 LUXURY GOODS MARKET SIZE (EUR BN) PER SEGMENT

YoY growth

at current

exchange

rates

YoY growth

at current

exchange

rates

Leather goods due to the weight of the bags and watches due to the high value of each piece are the two largest segments in the universe of the personal luxurygoods, followed by the ready-to-wear for both men and women. But if the jewelry still registers a vigorous growth, the watches segment suffers from a profoundrecession exacerbated by the Asian sectorial crisis. Globally, at constant exchange rate, the personal luxury goods sector has a very moderate growth.

EXANE BNP / PROMISE CONSULTING4

Source: Luxury Goods Worldwide Market Study, Bain & Co, 2015 / Altagamma

79

20 18 17 17 16 12 11 8 7

US Japan China Italy France UK Germany South Korea Middle East Hong Kong

Global Rank in 2014 1 2 5 3 4 6 7 8 10 9

Growth in euros 2014-2015

20% 13% 17% 6% 10% 16% 14% 16% 19% -11%

Growth in local currency 2014-2015

0% 9% -1% 6% 10% 5% 14% 4% 0% -25%

USA REALITY CHECKLargest personal luxury goods market despite delivering no real growth in local currency

The USA is by far the largest personal luxury goods market. Still the country does not deliver a real growth between 2014 and 2015 in local currency. Boosted by astrong dollars, the Americas emerged ass the biggest global region for personal luxury goods purchases. According Bain & Co, “the US alone accounted for €79billion of the €85 billion regional market, and remains the largest global market , bigger than the next four combined (Japan, China, Italy and France)”

2015 LUXURY GOODS MARKET SIZE (EUR BN) PER COUNTRY

EXANE BNP / PROMISE CONSULTING5Source: Bain & Co, Altagamma, Exane BNP Paribas analyses & estimates

USA REALITY CHECKUS nationals have supported luxury goods demand in the past three years

Americans have contributed about 1/3 of the growth in personal luxury goods in the past three years – by far the second most important nationality after theChinese.

GLOBAL LUXURY GOODS MARKET – GROWTH OF SPENDING BY CONSUMER NATIONALITY (EUR BN)

EXANE BNP / PROMISE CONSULTING6

EXCLUSIVITY & DESIRABILITY BAROMETERMethodology and sample’s profile

DATA COLLECTION

DURATION

SAMPLE

SIZE

BRANDS

Online Access panel from May 15th to June 30th 2016

10 mn

US women aged 18-54 y.o. whose household’s income is superior to the 1st decileQuotas on age clusters and geographical regions

750 respondents

Top 22 high-end brands in fashion with the highest media spending in 2015

EXCLUSIVITY

DESIRABILITY

Perceived exclusivity and degree of each brand’s ‘premiumness’ in theeyes of consumers.The survey aims to classify brands on a ‘luxury scale’ of one (mostaccessible) to five (most exclusive / high end). The results are indexedto 100.

The desirability of a brand in the eyes of consumers.The survey attempts to classify brands on a ‘desirability scale’ fromone (less desirable) to seven (most desirable). The results are indexedto 100.

EXANE BNP / PROMISE CONSULTING7

EXCLUSIVITY & DESIRABILITY BAROMETERTop 22 feminine fashion brands with the highest media spending in 2015

EXANE BNP / PROMISE CONSULTING8

9 BRANDS HAVE AN AIDED AWARENESS ABOVE 90%On average 16 top luxury brands are known

QM09 - What are all the brands that you know in one or more of the three listed categories, ready-to-wear, handbags and shoes only.

1 Gucci2 Ralph Lauren3 Chanel4 Giorgio Armani5 Prada6 Louis Vuitton7 Christian Dior8 Vera Wang9 Versace

10 Dolce & Gabbana11 Burberry 12 Valentino13 Yves Saint Laurent14 Fendi15 Hermès16 Celine17 Tom Ford18 Salvatore Ferragamo19 Balenciaga20 Bottega Veneta21 Brunello Cucinelli22 Tod's

Average number of known brands

98%

97%

96%

95%

94%

93%

92%

92%

90%

89%

82%

80%

73%

70%

62%

58%

53%

50%

45%

42%

35%

31%

TOTAL SAMPLE

98%

97%

96%

95%

94%

94%

94%

93%

92%

93%

84%

84%

73%

75%

66%

62%

62%

58%

53%

50%

45%

38%

16,9INTERNET BUYERS

Gucci, RL and Chanel are the top 3 brands most known in the US. Internet has little impact on awareness: the hierarchy remains the same with 5% morebrands known on average. Bottom 3 brands have a fair room of improvement as they do not exceed 42% of aided awareness: BV, BC and Tod’s.

THE SAME HIERARCHY PREVAILS AMONG WEALTHIEST WOMEN AND FOCUS ON INTERNET BUYERS OF PERSONAL LUXURY GOODS

16,1AIDED AWARENESS

Source: Barometer Exclusivity & Desirability, Promise Consulting – Exane BNP, US, 2016

EXANE BNP / PROMISE CONSULTING9

1 PRADA

2 VERSACE

3 LOUIS VUITTON

4 Gucci5 Giorgio Armani6 HERMÈS7 Valentino8 Dolce & Gabbana9 Balenciaga

10 CHANEL11 CHRISTIAN DIOR12 Fendi13 Vera Wang14 Bottega Veneta15 Yves Saint Laurent16 Burberry 17 Salvatore Ferragamo18 Tom Ford19 Brunello Cucinelli20 Celine21 Ralph Lauren22 Tod's

US PERCEPTION OF EXCLUSIVITY IN LUXURY FASHIONThe Italian designer’s brands dethrone the top luxury French brands

PRADA, VERSACE AND LOUIS VUITTON ARE THE MOST EXCLUSIVE BRANDS IN THE US

QM101 - Rate each additional brand as it is in your opinion a "TOP LUXURY" (note 5) or a "PREMIUM" brand (note 1). The intermediate marks are used to qualify your judgment.

84%

83%

82%

74%

72%

71%

71%

68%

67%

67%

65%

64%

62%

58%

58%

58%

57%

54%

53%

41%

38%

35%

Top2 (4-5)

3

1

2

While exclusivity is conventionally associated with a unique know-how (“savoir-faire”) and a recognizable style traditionally attached to the French HauteCouture brands, American women are turning their vote to the Italian designer’s brands. Only Louis Vuitton – ranked 3rd – salvage the honor of the Frenchtricolor flag, Hermès, Chanel and Dior standing quite far behind.

Presentation order: descending scores on exclusivity

Source: Barometer Exclusivity & Desirability, Promise Consulting – Exane BNP, US, 2016

EXANE BNP / PROMISE CONSULTING10

1 LOUIS VUITTON

2 RALPH LAUREN3 CHANEL4 Burberry 5 Vera Wang6 Prada7 GUCCI8 VERSACE9 Dolce & Gabbana

10 Christian Dior11 Giorgio Armani12 Hermès13 Salvatore Ferragamo14 Fendi15 Tom Ford16 Bottega Veneta17 Celine18 Valentino19 Yves Saint Laurent20 Balenciaga21 Tod's22 Brunello Cucinelli

QM100 - Rate each brand that you know using a scale of 1 to 7. The mark 7 means that this brand is your ideal

brand or is very close to being your ideal while the mark 1 means that the brand is far from being your ideal.% 6-7 Your ideal, very close to being your idealPresentation order: descending scores on desirability

40%

39%

39%

35%

35%

33%

33%

32%

30%

29%

27%

25%

23%

23%

22%

22%

21%

21%

21%

20%

19%

17%

US PERCEPTION OF DESIRABILITY IN LUXURY FASHIONLouis Vuitton, RL and Chanel are the top 3 most desired luxury fashion brands in the US

2

3

1

TOP LUXURY BRANDS, LV AND CHANEL, SQUEEZE AMERICAN BRAND RL AS THE TOP 3 MOST DESIRED BRANDS

While regarding exclusivity, American women are turning their votes in favor of Italian designer’s brands, Prada and Versace, they are much moreconventional - almost too wise - in choosing their favorite brands: two French brands, Louis Vuitton and Chanel, squeeze the not-to-be missed Americanbrand RL.

Source: Barometer Exclusivity & Desirability, Promise Consulting – Exane BNP, US, 2016