EXTENDING INNOVATION AND DESIGN LEADERSHIP
We are
determined to address every consumer in a specific and unique
way – with product and communication initiatives that generate
trade and consumer interest. As a result, we believe that technological
innovation and cutting-edge design are essential to
sustainable leadership in our industry.
Innovation plays a significant role in differentiating our product
offering in the minds of consumers. By leveraging the extensive
R&D expertise within our Group 
see Research and Development,
we continuously challenge the boundaries of functionality and
performance. It is our objective to launch at least one major
new technology or technological evolution per year.
Through design partnerships and collaborations with Stella McCartney, Yohji Yamamoto, Porsche Design and Rolland Berry we are widening our design reach and imbuing our products with the excitement consumers demand. By continually expanding our capabilities in R&D and design, we are able to introduce new products at high price points, thus contributing to Group margin improvement.
CUSTOMIZING DISTRIBUTION
Our Group will drive future success
by engaging consumers with unique interactive product
approaches and rewarding point-of-sale experiences. Our
brands must be competitive in this environment where consumers
make their final purchase decisions based on availability,
convenience and breadth of product offering. As a
result, we are continuously refining our distribution proposition,
concentrating on two areas: expanding controlled space
and improving retail relationships.
Controlled space includes:
Our own-retail business
Mono-branded stores run by retail partners
Shop-in-shops that we establish with our key accounts
Joint ventures with retail partners
Co-branded stores with sports organizations or other
brands
These formats provide us with a high level of brand control as we either manage the stores ourselves (i.e. own retail) or we work closely with our partners (mono-branded stores, shop-in-shops, joint ventures, co-branded stores) to ensure the appropriate product offering and presentation at the point-of-sale. Brand control helps us drive sales and profitability increases and expand our market position. By 2010, we intend to generate at least 30% of our Group’s revenues through controlled space.
Going forward, we will also further differentiate and segment our product offering to align our distribution more closely with a given retailer’s customer base. In addition, we are partnering with retailers to increase the level and quality of sell-through information we receive. This creates a mutually beneficial relationship that will help us become a more valuable and reliable business partner to our retailers.
CREATING SHAREHOLDER VALUE
Sustainable revenue and
operating profit growth are critical to our success. see Internal Group Management System Creating value for our shareholders
through significant free cash flow generation drives
our overall decision-making process. For each of our brands,
we pursue the most value-enhancing avenues for growth,
with particular emphasis on continuously improving profitability.
In addition, rigorously managing working capital and
optimizing financial leverage remain key priorities for us. As
always, we are committed to increasing returns to shareholders
with above-industry-average share price performance
and dividends.
