1. Arezzo&Co’s Investor Day
Supply chain management
Alexandre Birman
CEO

2. Trends and
style
Design
Technical
design
Engineering Samples Showroom
Logistics and
distribution Store
Raw material price negotiation Agency services+ Negotiating with the manufacturer
1 2 3 4 5 6 7
Arezzo&Co adds value throughout its production chain, from the creation of its
products until the moment it reaches the final consumer
Cost sheet
Engineering folder
 Cost management efficiency
 Quality standard guarantee
 Efficient lead time
 Flexibility
Arezzo&Co
Chemicals
and
textiles
Raw
material
Finished
product
Coordinated management of the supply chain associated to Investment in product engineering: In-house know-how
Arezzo&Co’s sourcing process:
Components
SKU
MODEL
CONSTRUCTION
10%
35%
70%
Reuse between collections:
2
Sourcing Arezzo&Co
Total control of the value chain

3. The Company has an extensive research and information source to ensure a
rich fashion content in its collections
Sourcing Arezzo&Co
Trends and style
 Historical analysis (track-record)
 Intensive search in collection
(more than 30 thousand
catalogued models)
 Independent style team for each
brand
 Constant research trips to the
world’s main fashion centers
 Participation at major trend fairs
 Constant street-style monitoring
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4.  Qualified team of modelers and
technicians
 State-of-the-art technological
resources
 Wide physical infrastructure
 Owned factory of samples
 Strong integration between areas
 Standardization of wear and quality
aspects
Each brand follows its own style, quickly adjusting the global fashion to the
Brazilian consumer
Sourcing Arezzo&Co
Engineering and Production of Samples
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5. Raw material negotiation is a fundamental part of the sourcing process
 Pricing determined based on
cost
 Quick re-engineering of models
to achieve market feasibility
 Multi-disciplinary decision-
making process: Style,
Engineering and Sourcing
 Strategic pre-negotiation of raw
materials
 Internal development ensures
cost control
Sourcing Arezzo&Co
Dynamic cost system
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6.  Strategic geographic location
 Strong industrial cluster
 100 accredited manufacturers
 Historical culture of female footwear
production
 Sourcing model allows productive
flexibility in other centers
 Quality standards
 Efficient lead time
 Process audit
 Legal aspects
Supply agents dedicated to maintaining delivery quality and deadlines
Sourcing Arezzo&Co
Agency services + Negotiating with manufacturers
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7. Constant investments in technology serve as benchmarking for our suppliers
Sourcing Arezzo&Co
Owned factory
 Factory qualified for small
productions
 Fast track to produce reorders
 High quality standard used as a
reference
 Proximity of suppliers of raw
materials and machinery, enabling
extensive market knowledge
 Transfer of know-how to suppliers
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8.  High cross docking capacity
 Synchronized distribution to all stores in
Brazil, so that all store windows open at
the same time
 Receiving: 100,000 units/day
 Storage: 100,000 units/day
 Separation: 150,000 units/day
 Distribution: 200,000 units/day
Sourcing Arezzo&Co
Logistics
With a distribution center located in the production chain and near the
consumption center, Arezzo&Co distributes simultaneously on national scale
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9. Brazil and Vale dos Sinos feature strong competitive advantage, gathering
productive capacity, skilled labor and production flexibility
Source: Abicalçados, 2012 / ASSINTECAL / FAO / AICSUL.
Production (million pairs)
Work (thousands)
819
338
Production (million pairs)
Work (thousands)
270
138
Production (million pairs)
Work (thousands)
216
110
BRAZIL
SOUTHEAST REGION
VALE DOS SINOS
Vale dos Sinos: 26% of the
Brazilian footwear production
 Brazil is the world’s 3rd largest producer of shoes
 The world's largest cattle herd: 13% of the
market
 RS: A third (R$ 1 billion) of the Brazilian leather
industry revenue
 Vale dos Sinos: one of the largest shoe
conglomerates in the world
 Abundance of skilled and specialized labor
 Productive flexibility: volume X variety X speed
 1,700 manufacturers: components, footwear,
machinery, leather, and other professional
research and teaching associations and
institutions
Sourcing Arezzo&Co
Region’s competitive advantages
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