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Sectorwatch: Apparel March 2019 Apparel March 2019 Sector Dashboard [4]

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Sectorwatch: Apparel March 2019 Apparel March 2019 Sector Dashboard [4] Sectorwatch: Apparel March 2019 Apparel March 2019 Sector Dashboard [4] Public Basket Performance [5] Operational Metrics [7] Valuation Comparison [10] Recent Deals [13] Appendix [15] 7 Mile Advisors appreciates the opportunity to present this confidential information to the Company. This document is meant to be delivered only in conjunction with a verbal presentation, and is not authorized for distribution. Please see the Confidentiality Notice & Disclaimer at the end of the document. All data cited in this document was believed to be accurate at the time of authorship and came from publicly available sources. Neither 7 Mile Advisors nor 7M Securities make warranties or representations as to the accuracy or completeness of third-party data contained herein. This document should be treated as confidential and for the use of the intended recipient only. Please notify 7 Mile Advisors if it was distributed in error. 2 Overview 7MA provides Investment Banking & Advisory Services to the Business Services and Technology Industries globally. We advise on M&A and private capital transactions, and provide market assessments and benchmarking. As a close knit team with a long history together and a laser focus on our target markets, we help our clients sell their companies, raise capital, grow through acquisitions, and evaluate new markets. We publish our sectorwatch, a review of M&A and operational trends in the industries we focus. Dashboard Valuation Comparison • Summary metrics on the sector • Graphical, detailed comparison of valuation • Commentary on market momentum by multiples for the public basket comparing the most recent 12-month performance against the last 3-year averages. Public Basket Performance Recent Deals • Summary valuation and operating metrics • The most recently announced deals in the for a basket of comparable public companies sector 3 Dashboard Operating Metrics Revenue Growth Momentum 1 - year revenue growth compared to revenue growth Median LTM GP Margin % 55.0% 2.5% average for last 3 years Current revenue growth rate exceeds the average of the last 3 years by this amount, indicating that market momentum is increasing Median LTM EBITDA Margin % 15.5% Pricing / Gross Margin Momentum Median LTM Rev. Growth % 5.1% 1 - year gross profit % compared to gross profit % 1.7% average for last 3 years 0% 20% 40% 60% Current gross profit margin exceeds the average of the last 3 years gross profit margin by this amount, indicating supplier pricing power Valuation Profitability Momentum Median TEV / LTM EBIT 12.1x 1 - year EBITDA % compared to EBITDA % average for 0.5% last 3 years Median Price / LTM Earnings 11.7x Current EBITDA margin exceeds the average of the last 3 years EBITDA margin by this amount, a condition that may attract new entrants Median TEV / LTM EBITDA 8.9x Median TEV / LTM Revenue 1.4x 0x 3x 6x 9x 12x 15x 4 Public Basket Rev TEV / LTM Rev Growth EBITDA TEV / EBITDA Rev / Company TEV $m $m YoY GP % % Rev X X # FTEs FTE $k Ralph Lauren Corporation 8,510 6,337 2% 62% 16% 1.3 8.7 12,800 495 Capri Holdings Limited 8,880 5,074 10% 61% 22% 1.8 7.8 8,166 621 Under Armour, Inc. 9,018 5,193 4% 45% 7% 1.7 24.9 7,000 742 Hanesbrands Inc. 9,653 6,804 5% 40% 16% 1.4 8.9 68,000 100 PVH Corp. 11,025 9,672 13% 55% 12% 1.1 9.4 19,600 493 Average 9,417 6,616 7% 53% 15% 1.5 12.0 23,113 490 Median 9,018 6,337 5% 55% 16% 1.4 8.9 12,800 495 share price as of 26Mar19 5 20x 12x 16x Public Basket Valuation Trends Public Basket Valuation 0x 4x 8x Jun-14 Sep-14 TEV/EBITDA- Average TEV/EBITDA- Median Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 1.8x Jun-16 10.9x Sep-16 Dec-16 TEV/Revenue - Average TEV/Revenue - Median Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Public Public Time over Multiples EBITDA Public 0x 1x 2x 3x 4x 10x 15x 20x 0x 5x Jun-14 Jun-14 Sep-14 TEV/Revenue - Median Sep-14 Dec-14 TEV/EBITDA- Median Revenue Multiples Multiples Revenue Dec-14 Mar-15 Mar-15 Jun-15 Jun-15 Sep-15 Sep-15 Dec-15 Dec-15 Mar-16 Mar-16 Jun-16 Jun-16 Sep-16 Sep-16 Dec-16 Dec-16 TEV/Revenue - Average Mar-17 TEV/EBITDA- Average Mar-17 Jun-17 Jun-17 Sep-17 Sep-17 Dec-17 Time over Dec-17 Mar-18 Mar-18 Jun-18 Jun-18 Sep-18 Sep-18 Dec-18 Dec-18 Mar-19 Mar-19 6 Operational Metrics LTM Gross Profit Margin % LTM EBITDA % Ralph Lauren Corporation Capri Holdings Limited Capri Holdings Limited Hanesbrands Inc. PVH Corp. Ralph Lauren Corporation Under Armour, Inc. PVH Corp. Hanesbrands Inc. Under Armour, Inc. Median Median - 20% 40% 60% 80% - 10% 20% 30% 7 Operational Metrics LTM Revenue per LTM Revenue Growth % Full Time Employee x 000’s Under Armour, Inc. PVH Corp. Capri Holdings Limited Capri Holdings Limited Ralph Lauren Corporation Hanesbrands Inc. Under Armour, Inc. PVH Corp. Ralph Lauren Corporation Hanesbrands Inc. Median Median - 4% 8% 12% 16% 20% $- $200 $400 $600 $800 8 Operational Metrics Average Days Accounts Receivable Turnover Sales Outstanding Ralph Lauren Corporation Hanesbrands Inc. Capri Holdings Limited Under Armour, Inc. PVH Corp. PVH Corp. Under Armour, Inc. Capri Holdings Limited Hanesbrands Inc. Ralph Lauren Corporation Median Median 0x 10x 20x 30x 0 20 40 60 9 Valuation TEV / LTM Revenue TEV / LTM EBITDA Capri Holdings Limited Under Armour, Inc. Under Armour, Inc. PVH Corp. Hanesbrands Inc. Hanesbrands Inc. Ralph Lauren Corporation Ralph Lauren Corporation Capri Holdings PVH Corp. Limited Median Median 0.0x 0.5x 1.0x 1.5x 2.0x 0x 10x 20x 30x 10 Valuation TEV / LTM EBIT Price / LTM Earnings Under Armour, Inc. Ralph Lauren Corporation PVH Corp. PVH Corp. Ralph Lauren Corporation Capri Holdings Limited Hanesbrands Inc. Hanesbrands Inc. Capri Holdings Limited Median Median 0x 20x 40x 60x 0x 10x 20x 30x 11 Valuation Historical Valuation Multiples Historical Valuation Multiples versus Gross Profit versus Revenue Growth Rate 30x 16% 30x 70% 61.0% 61.6% 13.5% 14% 60% 25x 55.0% 25x 12% 50% 10.2% 20x 20x 10% 45.5% 40% 15x 39.6% 15x 8% 30% 6% 10x 10x 20% 5.1% 4% 4.1% 5x 10% 5x 2% LTM GP% LTM EBITDA(x) EBITDA(x) 1.9% RGR% LTM 8x 9x 9x 9x 25x 0x 0% 8x 9x 9x 9x 25x 0x 0% EBITDA(x) LTM GP% EBITDA(x) LTM RGR% 12 Recent Transactions Total Transaction Target TEV / TEV / Date Target Buyer / Investor Value Revenue Revenue EBITDA 27Feb19 Belabumbum, LLC Adore Me, Inc. - - - - 25Feb19 Liberty Glove & Safety Inc. Bunzl plc - 93.00 - - 6Feb19 West Chester Holdings, Inc. Protective Industrial Products, Inc. - - - - 15Nov18 Coker Tire Company Irving Place Capital - - - - 1Nov18 Baffin, Inc. Canada Goose Holdings Inc. 24.80 - - - 15Oct18 Wheel House Designs, Inc. IQ Brands - - - - 4Oct18 South Cone, Inc. The Relay Shoe Company, LLC - - - - 2Oct18 ELOQUII Design, Inc. Walmart Inc. - - - - 24Sep18 Darwood Manufacturing Company Fire-Dex, LLC - - - - 19Sep18 Teamwork Athletic Apparel, Inc. Founder Sport Group - - - - 19Sep18 Woolrich, Inc. Goldwin Inc.; L-Gam Advisors Sarl - 211.33 - - 21Aug18 Utility Garments Inc. Unisync Corp. 18.43 13.28 1.4x - 13Aug18 YS Garments LLC Blue Point Capital Partners; Blue Point Capital Partners IV, - 201.20 - - L.P. 19Jul18 Underwear Station, Inc. Morro Capital LLC - - - - 10Jul18 REDONE LLC Style Capital Sgr S.P.A. - 20.00 - - 1Jul18 Perry Ellis International, Inc. Randa Corporation 605.22 888.00 0.6x - 31May18 Shakti Yoga Apparel LLC - - - - - 27Jun18 North American Licensing Business of GBG USA, Inc. Differential Brands Group Inc. (nka:Centric Brands Inc.) 1,210.00 - - - 14Jun18 Geoffrey Beene, LLC PVH Corp. - - - - 12Jun18 Worldwide Exclusive Distribution License For Apparel And American Premium Water Corporation - - - - Accessories of Worthy 1Jun18 Gracedbygrit, Inc. HYLETE, Inc. - - - - 1May18 Fabian Couture Group International Incorporated Valesco Industries, Inc.; Riveria Investment Group - - - - 1May18 Rubin Brothers, Inc. National Safety Apparel, Inc. - - - - 5Apr18 Certain Assets of Kizan International Inc. Haggar Clothing Co. - - - - 13 Apparel March 2019 APPENDIX: Public Basket Constituents 7 Mile Advisors appreciates the opportunity to present this confidential information to the Company. This document is meant to be delivered only in conjunction with a verbal presentation, and is not authorized for distribution. Please see the Confidentiality Notice & Disclaimer at the end of the document. All data cited in this document was believed to be accurate at the time of authorship and came from publicly available sources. Neither 7 Mile Advisors nor 7M Securities make warranties or representations as to the accuracy or completeness of third-party data contained herein. This document should be treated as confidential and for the use of the intended recipient only. Please notify 7 Mile Advisors if it was distributed in error. 14 Revenue Multiples - Ralph Lauren Public Basket 3x Corporation 2x 1x Ralph Lauren Corporation 0x Ralph Lauren Corporation designs, markets, and distributes lifestyle products in North America, Europe, Asia, and internationally. It offers apparel, including a range of men’s, TEV/Revenue Average women’s, and children’s clothing accessories, which comprise footwear, eyewear, watches, fashion and fine jewelry, EBITDA Multiples - Ralph Lauren Corporation hats, gloves, umbrellas, belts, and leather goods, such as 15x handbags, luggage, small leather goods, and belts; home 12x products consisting of bedding and bath products, furniture, 9x fabrics and wallpapers, lightings, tabletops, floorcoverings, and 6x giftware; and fragrances. The company sells apparel and 3x accessories under the Ralph Lauren Collection, Ralph Lauren 0x Purple Label, Polo Ralph Lauren, Double RL, Lauren Ralph Lauren, Polo Golf Ralph Lauren, Ralph Lauren Golf, RLX Ralph Lauren, Polo Ralph Lauren Children, Chaps, Club Monaco, and TEV/EBITDA Average other brand names; women's fragrances under the Ralph Lauren Collection, Woman by Ralph Lauren, Romance P/E Multiples - Ralph Lauren Corporation Collection, Ralph Collection, and Big Pony Women's brand 150x names; and men's fragrances under the Polo Blue, Safari, Purple Label, Polo Red, Polo Green, Polo Black, Polo Supreme, 100x Polo Sport, and Big Pony Men's brand names.
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