185000000 IT Holding Finance SA

• In March 2005, we issued an additional €35.0 million in principal amount of Notes and used the proceeds thereof
to fund a second escrow account (the “additional Escrow Account” and, together with the original Escrow
Account, the “Escrow Accounts”) to ensure that we would have enough cash to satisfy and discharge the entire
remaining principal amount of 2005 Notes on their maturity date in May 2005, as well as to pay certain fees and
expenses associated with our refinancing program.
• On May 10, 2005, we will satisfy and discharge the remaining principal amount of 2005 Notes using the proceeds
of the Escrow Accounts.
Our Strengths
• Strong and balanced portfolio of leading brands. Our portfolio of owned and licensed brands includes wellestablished
brands targeted to different types of consumers at varying price points. In general, we believe that
demand for apparel and accessories in the young lines segment where we focus our efforts is typically less volatile
than the demand for items targeting older customers at higher price points. Moreover, we believe that each of our
brands benefits from the image of style and quality associated with clothing designed in Italy. We believe that this
will be an important factor in allowing us to retain the prestige and image associated with our branded products as
we explore new manufacturing opportunities in low-cost regions.
• Rapidly growing accessories business. We have increased the net revenues of our accessories business from €24.6
million in 2002 to €58.3 million in 2004 (equivalent to a compound annual growth rate of approximately 54%
during that span) and believe that our portfolio of attractive brands and our unmatched production and distribution
synergies leave us well-positioned to exploit projected growth trends in this market segment and to meet
competition as it emerges. As a result, we expect to continue to expand our accessories business at a rapid pace
going forward.
• Strong licensing relationships. We manage more brands on behalf of Italian licensors and maisons than any of
our competitors in the young lines segment, including four of the most recognized Italian fashion brands: D&G
Dolce & Gabbana, Versus, Versace Jeans Couture and Just Cavalli. Since winning the first of our current licenses
in 1988, we have consistently renewed and extended our licensor relationships, consistently increased our sales of
licensed brands and, accordingly, consistently increased the amount of royalties paid to our licensors. In addition,
we believe that our ability to manage and co-ordinate the design, production and distribution of apparel and
accessories on behalf of our licensors is greater than that of our competitors. None of our licensors has ever failed
to offer us the opportunity to extend or renew a license, which we believe is the best indicator of the strength of our
licensing relationships.
• Extensive distribution network and attractive customer base. Our distribution network currently spans more than
100 countries and gives us access to more than 4,000 wholesale customers around the world. We believe that the
size and scope of this network helps us to achieve volumes of sales (and royalty payments) and to generate
economies of scale that are beyond the reach of our smaller competitors. Accordingly, we feel that our distribution
network provides us with significant competitive advantages both in distributing our existing brands and in
competing for new brand licenses. In addition, since the customer base served by our network includes many
smaller stores and boutiques, for whom we are often the most important supplier, we frequently have considerable
leverage vis à vis many of our customers – a factor that has contributed to our customer retention rates of more
than 90% in recent years. We select carefully our new customers and manage the amount of apparel and
accessories they may order from us in order to protect the image of our brands and control our credit exposures.
• Flexible business model based on production to order. Our apparel and accessories are typically produced on the
basis of product orders received in advance from our customers. As a result, we typically hold little unsold
inventory at the end of a season. In addition, our cost base is highly variable because we outsource most of the
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