Financial Analysis of Abercrombie & Fitch vs Polo Ralph Lauren

Financial Analysis

VS

Industry Overview

Sector: ServicesIndustry: Apparel Stores

Market Cap.: $5.17bn

Specialty Retailer:Casual Sportswear Apparel

Personal Care ProductsAccessories

Targets: Men, Women & Kids

Mainly Teenagers

Sector: Consumer GoodsIndustry: Textile – Apparel Clothing

Market Cap.: $12.08bn

Premium Lifestyle Products:Clothing Apparel

AccessoriesFragrances

Home Furnishing

Targets:Men, Women & Kids

$5.17bn $12.08bn

X 2.3

Closing of Ruehl divisionRecession / Expensive Clothes Prices$58M Pretax Loss for Ruehl in 2008

A&F refused lowering prices during 2009 first months Overall sales -28% in May yoy (-33% for Ruehl)

LATimes.com

Past Year’s Major Event

Current Economic Situation

“U.S. retail sales climb 4.2% in February beating expectations for a 3.6% rise yoy”

LATimes.com

+4.2%

Market Share

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Market Share compared to S&P 500's Overall Revenues

2008 (for Q.2, Q.3, & Q.4)

2009 (for Q.1, Q.2, & Q.3)

91.1

12.2

2009 Teens Buying Behavior in Clothing Industry ($bn)

Teens Income

Teens Buying Behavior (Spending in Clothing)

12.2

150

Teens Spendings as % of 2009 Overall Retail Clothing Industry

Revenue

Teens Buying Behavior (Spending in Clothing)

Overall Retail Clothing Industry (Revenue)

Stores Location by Continent

North America;

98.5%

Europe; 1.4%

Asia; 0.1%

Abercrombie & Fitch

North Amer-

ica; 49.2%

Eu-rope; 49.5%

Asia; 1.3%

Polo Ralph Lauren

98.5%

49.5%

49.2%

EUR/USD WeeklyFiscal Year 2009

Open: 1.2962 Close: 1.4141

+9%

Revenue By Area2009

United States; 92%

International8%

United

States /

Canada

69.5%

Eu-rope;21.1

%

Asia;9.2%

Other Regions0.1%

30.5%

Revenue By Segment2009

Wholesale; 51%Retail; 45%

Licensing; 4%

Retail100%

Stores Sales Sales per Store ($M)

Sales per Square Foot

($)Polo Ralph Lauren

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

8,918

4,823.7

0.540894819466249 115.133323921283

8,940

4,795.5

0.536409395973154 114.178571428571

20082009

+63,7%

X 2.3Stores Sales ($M) Sales per

Store ($M)Sales per

Square Foot ($)

Abercombie & Fitch

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

1,097

3,484.1

3.17602552415678

448.981958762885

1,096

2,928.6

2.6720802919708373.165137614679

20082009

Stores, Sales, Sales per Store &Sales per Square Foot

3 484.1

2 928.6

4 823.7 4 795.5

Top Competitors

GAP Inc: • Market Cap: $14.14bn

American Eagle Outfitters, Inc:• Market Cap: $3.15 bn

J. Crew Group, Inc:• Market Cap: $2.79 bn

$14.14bn

Top Competitors (Cont’d)

Phillips-Van Heusen Corp.:• Market Cap: $3.97bn

Jones Apparel Group:• Market Cap: $1.21 bn

LIZ Claiborne Inc:• Market Cap: $472.37 M

$3.97bn x 3 = RL

x 25.5 = RL

State of the Industry

• Haverty Furniture Companies

• Pier 1 Imports• Williams-Sonoma

• Hermès• Cartier• Chanel

• Calvin Klein• Diesel• Quicksilver

• Gap• Calvin Klein• DKNY

Clothing Apparel Accessories

Home FurnishingFragrances

Beta Analysis

β= 1.33

S&P500

β= 0.95

SectorANF: β=0.68RL: β=0.86

Industry

ANF β higher than industry and RLHigher volatility’s stock, higher risk however higher rate of return demandedAlso lower present value placed on ANF’s future cash flowsThis is due to:- High elasticity of demand- High volatility in fashion trends- High competition- Fewer and bad differentiation products strategy- Higher raw material and labor costs due to external economic factors

β= 1.52

RL

β= 1.64

ANF

+23.31%

+141.18%

+95.59%

+54.65%

+76.74%

+7.89%

+14.29%

Similar Marketing Strategies

High Competition: Constant changes in products Constant design renewal (fashion perpetuity)

Quality, design, brand, and image-focusing: products quality long-term similarity in design, style advertising similarity (magazines, e-marketing) seasonal marketing campaigns (Spring & Fall) large products availability corporate image brand affiliation

Price segmentation: Ralph Lauren and Abercrombie & Fitch can both be competitors (or not)

according to the prices they practice onto the market

Product Differentiation

Men’s Clothes

WatchesFragrances

Women’s

&

Kid’s

Clothes

Home Line Men’s, Women’s, & Kid’s Clothes

Accessories Fragrances

Teen Market Companies’ Interests on Teen-Focusing

Strategy

Establish fashion and overall trends and express specific lifestyles

A representation of present/future society

Big buying potential = discretionary income

Spend household’s money / Influence households’ buying behaviors

Importance of physical appearance

Constancy (even progression) of teens’ spendings thanks to constancy (even progression) of received ‘’income’’

Constancy on same-targets spending (the 3 C’s)

Different Marketing Strategies

Continual design improvement 22 trademarks’ own styles

Prices, styles, and consumer-focusing diversification

Among trademarks diversification

Ambiance-similarity between products, lifestyles, and shops

Keeping Ralph Lauren’s image and brand ambiance among products and shops design and lifestyles orientations

Advertising diversificationThrough famous magazines & fashion shows

Straightness vs. Diversification

Similarity among timeNo real design improvements, keeping the same style among time

Consumer-confidence focusingLowering the importance of advertising and basing its marketing strategy on in-store branding efforts

Less consumer-targetingMuch less product, style, and lifestyle diversification through only 4 trademarks

Different Marketing Approaches

Higher average buying costs

Much higher importance given to design

Larger consumer targeting

Larger exportation of trademarks

Bigger abroad implementations (8,940 doors around the world)

Low buying costs standard deviation

Standard clothing (less sophisticated in design)

Smaller consumer targeting

Very small abroad brand-availability (only 2.55% of A&F stores are located outside the United States)

WHAT’S UP INSIDE OUR COMPANIES?

Quarterly Loading of Sales and Income

Q1 Q2 Q3 Q40%

5%

10%

15%

20%

25%

30%

35%

21% 22%

26%

32%

23% 24%25%

28%

Abercrombie & Fitch: Quarterly Sales as Percent of Year Sales

20092008

Q1 Q2 Q3 Q4

-30000%

-20000%

-10000%

0%

10000%

20000%

30000%

0%

5%

10%

15%

20%

25%

30%

-23050% -10407%

15091%

18467%

22%

28%25%

25%

Abercrombie & Fitch: Quarterly Net Income as Percent of Year Net Income

2009

2008

Q4 Q1 Q2 Q30%

5%

10%

15%

20%

25%

30%

35%

40%

45%

24%

16%

37%

23%

11%

23%

40%

26%

Polo Ralph Lauren: Quarterly Net Income as Percent of Year Net Income

20092008

Q4 Q1 Q2 Q30%

5%

10%

15%

20%

25%

30%27%

21%

28%25%24%

22%

28%

25%

Polo Ralph Lauren : Quarterly Sales as Percent of Year Sales

20092008

Spread+11% Spread+7%

Comparative Income Statement

($ Millions) Abercrombie & Fitch Polo Ralph Lauren2009 % Change 2008 2009 % Change 2008

Net Sales 2,928.6 -15.9% 3,484.1 4,795.5 -0.6% 4,823.7

Licensing Revenue - - - 183.4 -6.0% 195.2

NET REVENUE 2,928.6 -15.9% 3,484.1 4,978.9 -0.8% 5,018.9

CGS 1,045.0 -9.4% 1,153.0 2,079.8 -9.1% 2,288.2

GROSS PROFIT 1,883.6 -19.2% 2,331.1 2,899.1 6.2% 2,730.7

Selling, General & Administrative Expense 1,761.5 -2.8% 1,812.9 2,000.0 7.2% 1,865.0 Advertising Expense 17.7 -38.3% 28.7 157.0 -8.2% 171.0 Other Operating Income, Net -13.5 54.2% -8.8 - - -

Amortization of intangible assets - - - 21.7 7.4% 20.2

Impairment of assets - - - 6.6 -88.1% 55.4

Restructuring charges - - - 6.9 -70.8% 23.6

OPERATING INCOME 117.9 -76.3% 498.3 706.9 18.7% 595.5

Interest and other income, net -1.6 86.0% -11.4 -12.4 -43.6% -22.0

Foreign Currency Gains (losses) - - - 2.2 -237.5% -1.6

Interest Expense - - - 22.2 -16.5% 26.6

Equity in income (loss) of equity-method investees - - - 5.6 12.0% 5.0

INCOME BEFORE INCOME TAXES 119.5 -76.6% 509.7 689.3 17.3% 587.5

Provision for Income Taxes 40.6 -79.9% 201.5 209.8 15.6% 181.5

NET INCOME FROM CONTINUING OPERATIONS 78.953 -74.4% 308.2 0.0 - 0.0

NET LOSS FROM DISCONTINUED OPERATIONS (Net of taxes) -78.699 -119.1% -35.9 0.0 - 0.0

NET INCOME 0.254 -99.9% 272.3 479.5 18.1% 406.0

2.9 BN 3.5 BN 5 BN 5 BN9.4 % 9.4 %

1.9 BN 2.3 BN 6.2 % -20% 2.9 BN 2.7 BN

Horizontal Analysis

-76% 19 %

17% -76%

-99% 18%

86% 44%237%

706 M 595 M117 M 498 M

X40%79 M

-78.7 M

690M 587 M510M120M

0.2M 272M 406 M479 M

X1.7

X2 000

-38%

-88%

Comparative Income StatementVertical Analysis

$ MillionsAbercrombie & Fitch Polo Ralph Lauren

2009 % V 2008 %V 2009 %V 2008 %V

Net Sales 2,928.6 100.0% 3,484.1 100% 4,795.5 100.0% 4,823.7 100%

Licensing Revenue - - - - 183.4 3.8% 195.2 4%

NET REVENUE 2,928.6 100.0% 3,484.1 100% 4,978.9 103.8% 5,018.9 104%

CGS 1,045.0 35.7% 1,153.0 33% 2,079.8 43.4% 2,288.2 47%

GROSS PROFIT 1,883.6 64.3% 2,331.1 67% 2,899.1 60.5% 2,730.7 57%

Selling, General & Administrative Expense 1,761.5 60.1% 1,812.9 52% 2,000.0 41.7% 1,865.0 39%

Advertising Expense 17.7 0.6% 28.7 1% 157.0 3.3% 171.0 4%

Other Operating Income, Net -13.5 0.5% -8.8 0% - - -

Amortization of intangible assets - - - - 21.7 0.5% 20.2 0%

Impairment of assets - - - - 6.6 0.1% 55.4 1%

Restructuring charges - - - - 6.9 0.1% 23.6 0%

OPERATING INCOME 117.9 4.0% 498.3 14% 706.9 14.7% 595.5 12%

Interest and other income, net -1.6 -0.1% -11.4 0% -12.4 -0.3% -22.0 0%

Foreign Currency Gains (losses) - - - - 2.2 0.0% -1.6 0%

Interest Expense - - - - 22.2 0.5% 26.6 1%

Equity in income (loss) of equity-method investees - - - - 5.6 0.1% 5.0 0%

INCOME BEFORE INCOME TAXES 119.5 4.1% 509.7 15% 689.3 14.4% 587.5 12%

Provision for Income Taxes 40.6 1.4% 201.5 6% 209.8 4.4% 181.5 4%

NET INCOME FROM CONTINUING OPERATIONS 78.953 2.7% 308.2 9% 0.0 0.0% 0.0 0%

NET LOSS FROM DISCONTINUED OPERATIONS (Net of taxes) -78.699 -2.7% -35.9 -1% 0.0 0.0% 0.0 0%

NET INCOME 0.254 0.0% 272.3 8% 479.5 10.0% 406.0 8%

64%

4%

4.1%

0%

3BN 3.5BN

67%

14%

15%

8%

5BN5BN

57%60%

12%15%

12%14.5%

8%10%

One-Day Comparative Income Statement

($ Millions)Abercrombie & Fitch Polo Ralph Lauren

2009 % Sales 2009 % Sales

Net Sales 8.14 100.0% 13.32 100.0%

Licensing Revenue - - 0.51 3.8%

NET REVENUE 8.14 100.0% 13.83 103.8%

CGS 2.90 35.7% 5.78 43.4%

GROSS PROFIT 5.23 64.3% 8.05 60.5%

Selling, General & Administrative Expense 4.94 60.8% 5.99 45.0%

Advertising Expense 0.05 0.6% 0.44 3.3% Other Operating Income, Net -0.04 -0.5% - -

Amortization of intangible assets - - 0.06 0.5%

Impairment of assets - - 0.02 0.1%

Restructuring charges - - 0.02 0.1%

OPERATING INCOME 0.33 4.0% 1.96 14.7%

Interest and other income, net 0.00 -0.1% -0.03 -0.3%

Foreign Currency Gains (losses) - - 0.01 0.0%

Interest Expense - - 0.06 0.5%

Equity in income (loss) of equity-method investees - - 0.02 0.1% INCOME BEFORE INCOME TAXES 0.33 4.1% 1.91 14.4%

Provision for Income Taxes 0.11 1.4% 0.58 4.4% NET INCOME FROM CONTINUING OPERATIONS 0.22 2.7% 0.00 0.0%

NET LOSS FROM DISCONTINUED OPERATIONS (Net of taxes) -0.22 -2.7% 0.00 0.0%

NET INCOME 0.00 0.0% 1.33 10.0%

64%

4%

4.1%

0%

60%

15%

14.5%

10%

=

X3

X3.5

Balance Sheet: Assets

($ Millions)Abercrombie & Fitch Polo Ralph Lauren

January 30, 2010 % H January 31,

2009 % H2 % V April 3, 2010 % H March 28,

2009 % H2 % V

ASSETS CURRENT ASSETS:

Cash and Equivalents $ 680.1 24% $ 522.1 18% 30% $ 563.1 12% $ 481.2 11% 17%

Short-term Investments 32.4 1% - - - 584.1 13% 338.7 8% 72%

Receivables, net of allowances 90.9 3% 53.1 2% 71% 381.9 8% 474.9 11% -20%

Inventories 310.6 11% 372.4 13% -17% 504.0 11% 525.1 12% -4%

Deferred Tax Assets 44.6 2% 43.4 2% 3% 103.0 2% 101.8 2% 1%

Other Current Assets 77.3 3% 80.9 3% -5% 139.7 3% 135.0 3% 3%

TOTAL CURRENT ASSETS 1,235.8 44% 1,072.0 38% 15% 2,275.8 49% 2,056.7 47% 11%

Property And Equipment, Net 1,244.0 44% 1,398.7 49% -11% 697.2 15% 651.6 15% 7%

Non-current Investments 141.8 5% 229.1 8% -38% 75.5 2% 29.7 1% 154%

Deferred Tax Assets - 0% - 0% 0% 101.9 2% 102.8 2% -1%

Goodwill - 0% - 0% 0% 986.6 21% 966.4 22% 2%

Intangible assets, net - 0% - 0% 0% 363.2 8% 348.9 8% 4%

Other Assets 200.2 7% 148.4 5% 35% 148.7 3% 200.4 5% -26%TOTAL ASSETS $ 2,821.9 100% $ 2,848.2 100% -1% $ 4,648.9 100% $ 4,356.5 100% 7%

71% -20%

ANF Inv. Value decreased by anticipation of future prices decline necessary to sell it + loss of Ruehl items that weren’t sold (p43)

-17%

30%

72%

154%

-11%49%44%

P&E:-Ruehl Stores Closure-Depreciation

-38%

NC Investments:-More cash-Investors ConfidenceGoodwill:

-Continuous Acquisitions Growth

22%21%NC Investments:-Lot of Cash to invest

Muni. Bonds (Tax free)

A/R:-Increased Cash Collection-Lower Wholesales

ST Investments:-Lot of Cash to invest

Muni. Bonds (Tax free)

584.1

17%

Cash & Equivalents:-Net Increase yoy

12% 11%

Inventories:-Lowered Prices In June-Ruehl Loss

Cash & Equivalents:-Bigger Cash Position Comfort Investors

2%3%

-1%

A/R:-98.5% North America-Econ. Situation

18%24%

13%

15%

Balance Sheet: Liabilities($ Millions) Abercrombie & Fitch Polo Ralph Lauren

January 30, 2010 % H January 31, 2009 % H2 % V April 3, 2010 % H March 28, 2009 % H2 % V

LIABILITIES AND SHAREHOLDER'S EQUITYCURRENT LIABILITIES: Account Payable $ 150.1 5% $ 149.8 5% 0% $ 149.8 3% $ 165.9 4% -10%

Accrued Expenses 246.3 9% 241.2 8% 2% 559.7 12% 472.3 11% 19%

Deferred Lease Credits 43.6 2% 42.4 1% 3% 0.0 0% 0.0 0% -

Income Tax Payable 9.4 0% 16.5 1% -43% 37.8 1% 35.9 1% 5%

TOTAL CURRENT LIABILITIES 449.4 16% 449.8 16% 0% 747.3 16% 674.1 15% 11%

LONG-TERM LIABILITIES: Deferred Income Tax 47.1 2% 34.1 1% 38% 126.0 3% 154.8 4% -19%

Deferred Lease Credits 212.1 8% 212.0 7% 0% 0.0 0% 0.0 0% -

Long-Term Debt 71.2 3% 100.0 4% -29% 282.1 6% 406.4 9% -31%

Other non-current Liabilities 214.2 8% 206.7 7% 4% 376.9 8% 386.1 9% -2%

TOTAL LONG-TERM LIABILITIES $ 544.6 19% $ 552.8 19% -1% $ 785.0 17% $ 947.3 22% -17%

SHAREHOLDER'S EQUITY: Additional paid-in-capital $ 339.5 12% $ 328.5 12% 3% $ 1,243.8 27% $ 1,108.4 25% 12%Accumulated Other Comprehensive Loss, Income -9.0 0% -22.7 -1% -60% 154.0 3% 126.8 3% 21%

Retained Earnings 2,183.7 77% 2,244.9 79% -3% 2,915.3 63% 2,465.5 57% 18%Common Stocks 1.0 0% 1.0 0% 0% 1.2 0% 1.1 0% 9%Treasury Stocks -687.3 -24% -706.2 -25% -3% -1,197.7 -26% -966.7 -22% 24%

TOTAL SHAREHOLDERS’ EQUITY 1,827.9 65% 1,845.6 65% -1% 3,116.6 67% 2,735.1 63% 14%TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 2,821.9 100% $ 2,848.2 100% -1% $ 4,648.9 100% $ 4,356.5 100% 7%

Income Tax Payable:Very Low Income

-43%

-10%

-19%

-31%

12%

-60%

24%

Working Cap. = $786.5

Working Cap. = $1,528.5

Working Cap. = $622.2

Working Cap. = $1,382.6

+26.4% +10.6%

A/P:Special Inventory Mgmt

38%

Deferred Income Tax:Payable Later

Acc. Other Comp. Loss:-Derivatives-Forex

Add. Paid In Capital:Share Price Growth

Treasury Stocks:Buyback Stock price ↑

18%57%63%

RE:-Conservative Policy-To buy treasury stocks

LT Debt:-EUR Debt (€90.8M repurchased, July 2009)

79%77%

RE:-Conservative Policy

21%

Acc. Other Comp. Income:-Forex Hedges-A-f-Sale Invest.

Deferred Income Tax:Payable later

-29%

Long-term Debt

($ Millions) Abercrombie & Fitch Polo Ralph Lauren

2009 2008 2007 2006 2005 2009 2008 2007 2006 2005

Cash 522 649 530 462 50.68 820 626 564 286 344

Equity 64.80 63.03 62.51 55.60 49.66 62.78 54.74 62.13 66.33 61.46

Lt debt 3.5 0 0 0 0 9.33 10.83 10.61 0 10.67

Beta 1.68 1.57

LT Debt to Equity Ratio 5.4% 0.0% 0.0% 0.0% 0.0% 14.9% 19.8% 17.1% 0.0% 17.4%

($ Millions) American Eagle Outfitters, Inc. (AEO). Gap

2009 2008 2007 2006 2005 2009 2008 2007 2006 2005

Cash 484 620 827 752 131 1.715 1.901 2.6 2.987 2,035

Equity 71.75 71.77 71.31 71.97 74.48 58.00 54.53 60.56 61.50 49.12

Lt debt 0 0 0 0 0 0 0.64 2.20 5.82 18.77

Beta 1.18 1.18

LT Debt to Equity Ratio 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 1.2% 3.6% 9.5% 38.2%

14.9%5.4%

0%0%

Improving

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

Polo Ralph Lauren

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

Abercrombie & Fitch

10-Year Revenue

+201%

-99.8%

+714%

Comparative Cash FlowANF 2009 RL 2009

Net Income 0.25 479.50Operating Activities:Depreciation Expense 238.75 181.20A/R -37.76 93.00Inventories 61.78 21.10Deferred Tax Assets -1.16 -1.20Other Current Assets 3.65 -4.70A/P 0.38 -16.10Accrued Expense 5.06 87.40Deferred Lease Credit 1.31 0.00Income Tax Payable -7.10 1.90Deferred Income Taxes 13.1 -28.8

Net Cash From Operating Activities 278.22 813.30

ANF 2009 RL 2009Investing ActivitiesShort Term Investment -32.36 -245.40Property and Equipment -84.12 -226.80Non-Current Investment 87.29 -45.80Deferred Tax Asset 0.00 0.90Goodwill 0.00 -20.20Intangible Assets 0.00 -14.30Other Assets -51.77 51.70Long-Term Debt -28.787 -124.3Other non-current Liabilities 7.427 -9.2Net Cash From Investing Activities -102.32 -633.40

Financing ActivitiesAdditional Paid-in Capital 10.97 135.40Accumulated Other Compr. Gain 13.71 27.20Common Stocks 0.00 0.10Treasury Stocks 18.91 -231.00Dividends -61.50 -29.70Net Cash From Financial Activities -17.92 -98.00

Net increase in Cash 157.99 81.90Cash at Beginning 522.12 481.20Cash at End 680.11 563.10

278.2 813.3

Free Cash-Flow:-$100.8M

Free Cash-Flow:$313.5M

89.6%

Cash Available After Assets Maintenance

Comparative 10-Year Cash Flow

2001 2002 2003 2004 2005 2006 2007 2008 2009-$100

$0$100$200$300$400$500$600$700$800$900

-$2.000

$107.000$200.000$183.000

$241.000$197.000$179.000

$414.000

$123.000$151.000$233.000

$293.000$282.000

$426.000$454.000

$582.000

$818.000

$491.000

Free Cash Flow USD Operating cash flow

2001 2002 2003 2004 2005 2006 2007 2008 2009-$100

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

-$5.000

$206.000$170.000$88.000

$208.000$291.000

$612.000

$478.000

$589.000

$100.000

$294.000$269.000$211.000

$382.000$449.000

$796.000

$695.000$774.000

Free Cash Flow USD

Operating cash flow

DOL-29.54

DFL0.02

DTL-0.59

DOL4.67

DFL1.31

DTL6.09

DOL / DFL / DTL

-29.54

0.02

4.67

6.09 -0.59

1.31

20082009

20102011

20122013

2014

2015 & Thereafter

0

100

200

300

400

500

600

700

800

900

Operating Leases ($M)Capital Leases ($M)

-39.6%

20082009

20102011

20122013

2014

Thereafter0

200

400

600

800

1,000

1,200

Operating Leases ($M)

+12.8%

Lease Financing

Leasehold Improvements ($M)

2009

2008

0 200 400 600 800 1,000 1,200 1,400

700.0

643.3

1,205.3

1,143.7

-41.9%

Capital Financing with Lease as a Percentage of Total Assets

2008 2009 2008 20090.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

10.1%11.1%

5.6%6.3%

-480 bps

Individual Ratios2 Years – Abercrombie & Fitch

2009 2008 Better / WorseLiquidityCurrent 2.75 2.38 BetterQuick 2.06 1.56 BetterProfitabilityROA 0.01% 9.56% WorseROE 0.01% 14.75% WorseROS 0.01% 7.81% WorseTurnoverReceivables Turnover 32.23 65.60 WorseAsset Turnover 1.04 1.22 WorseInventory Turnover 9.43 9.36 BetterLeverageTIE 0.00 0.00 -D/A 35.22% 35.20% WorseD/E 54.38% 54.32% WorseCash ManagementDSO 11.17 5.49 WorseICD 38.19 38.48 BetterAPD 18.46 15.47 WorseCCC 30.90 28.50 WorseDividendsMarket Cap. $2.72 Billion $1.50 Billion BetterEPS $3.05 $5.20 WorsePayout Ratio 23% 13% BetterProductivitySales/Employee $36,608 $43,551 WorseNi/Employee $3 $3,403 Worse

6 Better

13 Worse

Quick:Inv. -17%

Profitability:NI ≈ 0

A/R Turnover:A/R +71% 32.23 65.60

-51%

Leverage:TA/TL/TE Constant

DSO:A/R ↑ 11.17 5.49

+5.68 days

APD:+2.99 days 30.90 28.50

+2.49 days

Market Cap.:Out. Shares ↑Shares Price ↑

2.72Bn 1.50Bn

+ 81%

23% 13%

+69%

Individual Ratios2 Years – Polo Ralph Lauren

2009 2008 Better / Worse Liquidity Current 3.05 3.05 No Change Quick 2.37 2.27 Better Profitability ROA 10.31% 9.32% Better ROE 15.39% 14.84% Better ROS 10.00% 8.42% Better Turnover Receivables Turnover 12.56 10.16 Better Asset Turnover 2.11 2.35 Worse Inventory 9.51 9.19 Better Leverage TIE 31.84 26.82 Better D/A 32.96% 37.22% Worse D/E 49.17% 59.28% Better Cash Management DSO 28.67 35.44 Better ICD 37.84 39.19 Better APD 11.25 12.38 Better CCC 55.26 62.25 Better Dividends Market Cap. $8.47 Billion $4.36 Billion Better EPS $4.01 $3.99 Better Payout Ratio 17% 18% Worse Productivity Sales/Employee (M) $ 252,395 $ 253,879 Worse Ni/Employee (M) $ 25,237 $ 21,368 Better

15 Better

4 Worse

Quick:Inv. -4%

Profitability:NI +18%

+11%+4%+19%

A/R Turn.:A/R -20%

+24%

12.56 10.16Asset Turn.:CA↑ STI

-10.2%

2.11 2.35

TIE:EBIT ↑

+19%

31.84 26.82

+11%

31.84 26.82

-17%

49.17 59.28

D/A:More Debt Financing

+94%

8.47Bn 4.36Bn

+85%

-0.6%

+18%

Comparative Ratios - 2009

ANF RLLiquidityCurrent 2.75 3.05Quick 2.06 2.37ProfitabilityROA 0.01% 10.31%ROE 0.01% 15.39%ROS 0.01% 10.00%TurnoverReceivables Turnover 32.23 12.56Asset Turnover 1.04 2.11Inventory Turnover 9.43 9.51LeverageTIE 0.00 31.84D/A 35.22% 32.96%D/E 54.38% 49.17%Cash ManagementDSO 11.17 28.67ICD 38.19 37.84APD 18.46 11.25CCC 30.90 55.26Market ValueMarket Cap. $5.17 Billion $12.08 BillionEPS 3.05 4.01Payout Ratio 23% 17%ProductivitySales/Employee $ 154,138 $ 252,395 Ni/Employee $ 13 $ 25,237

W BW B

W BW BW B

B WW BW B

B WW BW B

W BW BW BW B

W BW BB W

W BW B

17 Worse

17 Better

Reuters RatioAbercrombie

& Fitch % Difference Sector % Difference Polo Ralph Lauren

% Difference ANF/RL

Valuation RatiosP/E Ratio 44.60 560% 7.97 261% 20.81 214%P/E High 35.40 83% 42.81 55% 23.66 150%P/E Low 5.17 50% 10.42 106% 11.05 47%Price to Sales 1.59 162% 0.98 226% 2.21 72%Price to Book 2.81 426% 0.66 547% 3.61 78%Price to Tangible Book 2.80 350% 0.80 760% 6.08 46%Price to Cash Flow 14.93 407% 3.67 420% 15.41 97%Price to Free Cash Flow 52.14 420% 12.41 255% 31.62 165%

DividendsPayout Ratio 51.80 620% 8.36 86% 7.15 724%

Financial StrengthQuick Ratio 1.57 291% 0.54 424% 2.29 69%Current Ratio 2.51 369% 0.68 466% 3.17 79%LT Debt to Equity 4.42 24% 18.15 44% 8.06 55%Total Debt to Equity 4.42 14% 32.68 25% 8.06 55%Interest Coverage N/A - 0.17 23 971% 40.75 N/A

214%

217%

182%

724%

165%

146%

182%23 971%

739% 405%410% 225%

420%

760%350%

560% 261%

255%

291% 424%

620% 117%

Reuters Ratio (Cont’d)Abercrombie &

Fitch%

Difference Sector % Difference Polo Ralph Lauren

% Difference

ANF/RLProfitability RatiosGross Margin 63.76 797% 8.00 740% 59.19 108%Gross Margin (5 Yr. Avg) 66.46 277% 23.99 230% 55.09 121%EBITD Margin 12.61 - - - 19.57 64%EBITD Margin (5 Yr. Avg) 21.14 207% 10.22 169% 17.29 122%Operating Margin 5.61 -357% -1.57 -1029% 16.15 35%Operating Margin (5 Yr. Avg) 16.24 309% 5.26 259% 13.63 119%Pre-Tax Margin 5.51 -353% -1.56 -1014% 15.82 35%Pre-Tax Margin (5 Yr. Avg) 16.57 326% 5.08 263% 13.38 124%Net Profit Margin 3.65 -169% -2.16 -506% 10.92 33%Net Profit Margin (5 Yr. Avg) 10.27 302% 3.40 259% 8.80 117%Effective Tax Rate 33.78 295% 11.44 271% 30.95 109%Effective Tax Rate (5 Yr. Avg) 38.00 117% 32.59 105% 34.26 111%EfficiencyRevenue/Employee $ 361,708 3% $11,580,092 3% $ 293,184 123%Net Income/Employee $ 13,191 3% $404,449 8% $ 32,026 41%Receivable Turnover 41.67 513% 8.13 228% 18.54 225%Inventory Turnover 2.75 102% 2.69 136% 3.66 75%Asset Turnover 1.14 633% 0.18 639% 1.15 99%Management EffectivenessReturn on Assets 4.17 673% 0.62 2032% 12.60 33%Return on Assets (5 Yr. Avg) 14.40 429% 3.36 312% 10.47 138%Return on Investment 5.08 564% 0.90 1667% 15.00 34%Return on Investment (5 Yr. Avg) 18.24 308% 5.92 220% 13.02 140%Return on Equity 6.55 372% 1.76 1065% 18.75 35%Return on Equity (5 Yr. Avg) 23.39 254% 9.20 184% 16.92 138%

155%121%

122%

119%288%

108%

302%

225%

117%

133%SAME

138%

138%

296%

286%

302%

140%

797% 740%

169%207%-357%

230%277%

-1029%309% 259%

-169%

-1014%-353%

-506%302% 259%

2032%312%

184%

639%136%228%

1667%

254%372%308%564%429%673%

633%102%513%

1065%220%

2001 2002 2003 2004 2005 2006 2007 2008 2009 20100%

10%

20%

30%

40%

50%

60%

70%

Polo Ralph Lauren: Gross Margin

2001 2002 2003 2004 2005 2006 2007 2008 2009 20100%

5%

10%

15%

20%

25%

ROA (%)ROE (%)ROS (%)

2001 2002 2003 2004 2005 2006 2007 2008 2009 20100%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

ROA (%)ROE (%)ROS (%)

2001 2002 2003 2004 2005 2006 2007 2008 2009 20100%

10%

20%

30%

40%

50%

60%

70%

Abercrombie & Fitch: Gross Margin

10-Year Profitability

10-Year Financial Health

2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

0.5

1

1.5

2

2.5

3

Current Ratio

Quick Ra-tio

2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

0.5

1

1.5

2

2.5

3

3.5

Current Ratio

Quick Ra-tio

2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

0.5

1

1.5

2

2.5

Financial Leverage

Debt/Equity

2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

0.5

1

1.5

2

2.5

Financial Leverage

Debt/Equity

-36% -23%-24% +21%

-36%

-21%

-42%-22%

+87%

+45% -44% +74%

-53% +97%+96%

2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

20

40

60

80

100

120

140

160

Days Inventory DSO Payable Period CCC

2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

20

40

60

80

100

120

140

Days Inventory DSO Payable Period CCC

10-Year Efficiency

Pre-crisis

Post-crisis

10-Year Efficiency (Cont’d)

2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

1

2

3

4

5

6

7

8

0

20

40

60

80

100

120

140

160

180

200

Inventory Turnover

Asset Turnover

Receivables Turnover

2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

2

4

6

8

10

12

14

Receivables TurnoverInventory TurnoverAsset Turnover

Dupont Equation ($ Millions)

Abercrombie & Fitch2009 2008

Net Income 0.25 272.26Sales 2,928.63 3,484.06Total Assets 2,821.87 2,848.18

Owner's Equity 1,827.92 1,845.58

ROS x TAT x EM = ROE

NI/SALES   SALES/TA   TA/Stockholders' Equity   NI/Stockholders' Equity

ANF

2008 7,81  1,22  1,54  14,8

2009 0  1,04  1,54  0,0

Change -100%  -15%  0%  -100%

RL

2008 8,09  1,15  1,59  14,8

2009 9,63  1,07  1,49  15,4

Change 19%  -7%  -6%  4%

($ Millions)Polo Ralph Lauren2009 2008

Net Income 479.50 406.00Sales 4,978.90 5,018.90Total Assets 4,648.90 4,356.50

Owner's Equity 3,116.60 2,735.10

Polo Ralph Lauren

Ratios Variations Status

ROS Better

TAT Worse

EM Better

ROE Better

DuPont Equation Analysis

Abercrombie & Fitch

Ratios Variations Status

ROS Worse

TAT Worse

EM Worse

ROE Worse

NI : -100% Sales : -15.9%

TAT : -15% TA : -1%

ROE : - 100%

EM : 1.54 => 0%

NI : +19%

TAT : -7%

ROE : +4%

OE : +13.95%EM : -6%

TA : +7%

Sales : -0.7%

Capital Expenditures

$M (except %) Long-Lived Assets Sales Sales % to Long-Lived Assets Change in Sales % Assets

Segments 2009 2008 2009 2008 2009 2008 % Millions of $

United States 1,138 1,372 2,566 3,220 225.5% 234.7% -3.9% -44.7

International 194 80 363 264 187.1% 330.0% -43.3% -84.0

Total 1,332 1,452 2,929 3,484 219.9% 239.9% -8.4% -111.3

$M (except %) Long-Lived Assets Sales Sales % to Long-Lives Assets Change in Sales % Assets

Segments 2009 2008 2009 2008 2009 2008 % Millions of $

United States & Canada 441.6 452.8 3,462.3 3,589.3 784.0% 792.7% -1.1% -4.8

Europe 166.4 132.7 1,052.6 1,028.4 632.6% 775.0% -18.4% -30.6

Asia 84.1 60.9 459.7 392.6 546.6% 644.7% -15.2% -12.8

Other regions 5.1 5.2 4.3 8.6 84.3% 165.4% -49.0% -2.5

Total 697.2 651.6 4,978.9 5,018.9 714.1% 770.2% -7.3% -50.8

187.1% 330.0%

-1429 bps

-43.3%

+38.0%

60.984.1

26436380194

+37.5%+142.5%

132.7166.4

+25.4%

+29.4%

ONCE UPON A TIME ON THE STOCK MARKET…

Comparative Stock PricesOver 1 Year

S&P500 DrivenRL: $250M Buyback

Correlation Coefficients Over 2 Years

S&P500 ANF RL AEO Gap

S&P 500 100%

ANF 75.58% 100%

RL 68.82% 56.85% 100%

AEO 54.51% 39.85% 59.79% 100%

Gap 59.46% 71.83% 62.02% 47.69% 100%

0 0.5 1 1.5 2 2.50.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

ERR1

ERR2

ERR3

ERR4

ERR1

ERR2

ERR3

ERR4

The Security Market Line (SML)

SMLANFRL

Required Rate of Return (%)

Risk, β

BUY

SELL

BUY

SELL

HOL

D

ERR / RRR

Growth 42% to 36% P0= $ 57Div. $0.70

Growth 22% to 13% P0= $ 124

Div.: $0.125

Analyst Estimates(Yahoo)

Current Month

Last Month

Two Months Ago

Three Months Ago

Strong Buy 11 11 11 9Buy 9 8 7 8Hold 14 15 15 14Underperform 0 0 0 0Sell 0 0 0 1

Current Month

Last Month

Two Months Ago

Three Months Ago

Strong Buy 1 1 0 1Buy 6 6 6 6Hold 7 7 8 8Underperform 1 2 2 2Sell 0 0 0 0

35 analysts

15 analysts

11

6

914

7

Analyst Estimates (Cont’d)(Morningstar)

ANF Industry RL5 Y Growth 20.3% 15.4 9%Forward P/E 14.3 - 19.0

30-Year T-Bond Yield

S&P500 Dividen Yield

S&P500 Earning Yield

Cash Return

Dividend Yield

Earning Yield

0 2 4 6 8

4.6

2.1

6.2

3.5

1.2

2.3

30-Year T-Bond Yield

S&P500 Dividen Yield

S&P500 Earning Yield

Cash Return

Dividend Yield

Earning Yield

0 2 4 6 8

4.6

2.1

6.2

3.9

0.3

4.9

2.3%

4.9%

20.3%14.3

9%19

Dividend History

“A quarterly dividend of $0.175 per share, was paid in March, June, September and December of Fiscal 2007, Fiscal 2008 and Fiscal 2009. A&F expects to continue to pay a dividend, subject to the Board of Directors’ review of the Company’s cash position and results of operations.”

“Since 2003, the Company has maintained a regular quarterly cash dividend program on its common stock. On November 4, 2009,the Company’s Board of Directors approved an increase to the Company’s quarterly cash dividend on its common stock from $0.05 pershare to $0.10 per share. Approximately $30 million was recorded as a reduction to retained earnings during Fiscal 2010 in connectionwith the Company’s dividends.”

DPS vs. Competitors2009

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8

0.4

0.45

0.700000000000001

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8

0.23

0.15

0.20.20.7

2005 2006 2007 2008 2009 20100

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.600000000000001

0.7000000000000010.7000000000000

010.7000000000000

010.7000000000000

010.7000000000000

01

0.2 0.2 0.2 0.2 0.2

0.3

Abercrombie & FitchPolo Ralph Lauren

6-year DPS Evolution

Revenue

Dividend

0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%

8.54%

8.45%

Polo Ralph Lauren 5-year Annual Growth Rates

Correlation Coefficient ≈ 1

8,45%

8,54%

0,3

84.8%

15.2%

85.2%

14.8%

Outstanding SharesTreasury Stocks

2008

2009

Treasury Stocks(2 Years Comparison)

(Millions)2009 2008

# Shares $ % # Shares (Thousands) $ (Millions) %

Outstanding Shares 87.99 90.5 85.2% 87.64 89.0 84.8%

Treasury Stocks 15 687 14.8% 16 706 15.2%

Total 103 100.0% 103 100.0%

Treasury Stocks(2 Years Comparison) (Cont’d)

(Millions)2009 2008

# Shares $ % # Shares (Thousands) $ (Millions) %

Outstanding Shares 98.2 1 83.4% 99.2 1 85.8%

Treasury Stocks 19.6 1.2 16.6% 16.4 1 14.2%

Total 118 100.0% 116 100.0%

85.8%

14.2%

83.4%

16.6%

Outstanding SharesTreasury Stocks

2008

2009

FURTHER INVESTIGATIONS

Abercrombie & Fitch’s Employee Savings Plan

I. The Abercrombie & Fitch Co. Savings & Retirement Plan

Code Section 401(k) feature retirement savings plan

All US associates eligible (low participation rate)

+ ‘’ The Company offers a life insurance benefit for all full-time employees equal to 2-times base salary. For Vice Presidents and above, the death benefit is set at four-times base salary. ‘’

The Company’s contributions are based on a percentage of associates’ eligible annual compensation.

II. The Abercrombie & Fitch Nonqualified Savings and Supplemental Retirement Plan

‘’ Allows executive officers to defer a portion of their compensation over-and-above the Internal Revenue Service ‘’

+ ‘’ For Vice Presidents and above, the Company offers a life insurance benefit set at 4-times base salary. ‘’

Matching and Retirement Contributions

Allows participants the opportunity to save and invest their own money as a percentage of their pay

Abercrombie & Fitch

Chief Executive Officer Supplemental Executive Retirement Plan (SERP)

Additional Retirement Income to Chairman & CEO

50% of final average compensation for life

‘’ The final average compensation used for the calculation is based on actual compensation, base salary and cash incentive

compensation for the past three fiscal years. ‘’

Polo Ralph Lauren

Employee Benefit Plans

Profit Sharing Retirement Savings Plans

Savings plan feature under Section 401(k) of the Internal Revenue Codecorresponds to 50% of the first 6% of the salary earned by the employee

(Non-Qualified) Supplemental Retirement Plan‘’ For certain highly compensated employees whose benefits under the 401(k) profit sharing retirement savings plans are expected to be

constrained by the operation of certain Internal Revenue Code. ‘’ amended for Fiscal 2009 $18M to affected participants during 1st Q. 2010

Employee Benefit Plans (cont’d)

Deferred Compensation Plans•

‘’ For certain key executives which generally provide for payments upon retirement, death or termination of employment. ‘’

$3M Fiscal 2009 + Fiscal 2010

Union Pension Plan

‘’ The Company participates in a multi−employer pension plan and is required to make contributions to the UNITE HERE…for dues based on wages paid to union employees. ‘’

Polo Ralph Lauren

Abercrombie & Fitch

Environmental matters: federal, state, and local regulations / general economic and financial conditions

Consumer spending Bad weather conditions

Changes in credit & lending market conditions (interest rates)

Impact of competition & pricing measures (including raw materials)

Currency & exchange risks / change in tariffs & quotas

Political events / acts of terrorism, threats, or wars

Risks

Risks Polo Ralph Lauren

The loss of the services of Mr. Ralph Lauren or other key personnal

Financial instability of customers

Economic crisis’ effects on major customers and suppliers

‘’ The Company has an exclusive relationship with certain customers for some of its products. The loss or significant decline in business of any of these customers could negatively impact our business. ‘’

+ ENVIRONMENTAL FACTORS (Natural & Economic (or Fiscal))

Insider/Institutional TradingPercentage and Names

Breakdown% of Shares Held by All Insider and 5% Owners: 5%% of Shares Held by Institutional & Mutual Fund Owners: 100%% of Float Held by Institutional & Mutual Fund Owners: 106%Number of Institutions Holding Shares: 309

Top Institutional Holders % OutFMR LLC 11.05Columbia Wanger Asset Management, L.P. 6.49Vanguard Group, Inc. (The) 4.99Bank of New York Mellon Corporation 4.13Pennant Capital Management, LLC 3.83State Street Corporation 3.83Massachusetts Financial Services Co - Other 3.82Orbis Holdings Ltd 3.33Maverick Capital Ltd. 2.54BlackRock Institutional Trust Company, N.A. 2.46

Breakdown% of Shares Held by All Insider and 5% Owners: 0%% of Shares Held by Institutional & Mutual Fund Owners: 104%% of Float Held by Institutional & Mutual Fund Owners: 104%Number of Institutions Holding Shares: 304

Top Institutional Holders % OutFMR LLC 10.99Jennison Associates LLC 9.19Lone Pine Capital, LLC 5.31Vanguard Group, Inc. (The) 4.98Wells Fargo & Company 4.76State Street Corporation 3.51Artisan Partners Limited Partnership 3.3Goldman Sachs Group Inc 3.02Franklin Resources, Inc 2.56BlackRock Institutional Trust Company, N.A. 2.41

Abercrombie & Fitch Polo Ralph Lauren

+477%+64,74%

Altman Z Score

In Millions ($), except Share PricesANF RL

2009 2008 2009 2008EBIT 119.5 509.6 689.30 587.50Total Assets 2,821.9 2,848.2 4,648.90 4,356.50Net Sales 2,928.6 3,484.1 4,795.50 4,823.70Weighted Shares Outstanding 88.0 87.6 98.20 99.20Share Price $ 30.9 $ 17.1 $ 86.24 $ 43.95Market Capitalization 2,715.2 1,495.1 8,468.77 4,359.84Current Assets 1,235.8 1,072.0 2,275.80 2,056.70Current Liabilities 449.4 449.8 747.30 674.10Long-Term Liabilities 544.6 552.8 785.00 947.30Total Liabilities 993.9 1,002.6 1,532.30 1,621.40Retained Earnings 2,183.7 2,244.9 2,915.30 2,465.50Working Capital 786.5 622.2 1,528.50 1,382.60

Z Score 4.23 4.07 6.11 4.34

Zones of Discrimination:

Z > 2.6 -“Safe” Zone

1.1 < Z < 2.6 -“Grey” Zone

Z < 1.1 -“Distress” Zone

4.07 6.114.23 4.34

+0.27+1.88

8,468.772,715.2

+212% 689.3119.5 509.62,821.9 4,648.9

-76,55%

587.5

+17.33%

Comparative Bankruptcy Balance SheetAbercrombie & Fitch

$Millions, except for Share data Coefficient B/S Value 2009

B/S Value 2008

Bankruptcy 2009

Bankruptcy 2008

Current AssetsCash and Equivalents 1 680.1 522.1 680.1 522.1Receivables 0.8 90.9 53.1 72.7 42.5Marketable Securities 0.8 32.4 0.0 25.9 0.0Inventories 0.3 310.6 372.4 93.2 111.7Other Current Assets 0.8 77.3 80.9 61.8 64.8Total Current Assets 1,235.8 1,028.6 933.7 741.1Property and Equipment 0.5 1,244.0 1,398.7 622.0 699.3Non-Current Marketable Securities 0.5 141.8 229.1 70.9 114.5Other Assets 0.5 200.2 148.4 100.1 74.2Total Fire Sale Assets 2,821.9 2,804.8 1,726.7 1,629.2Total Current Liabilities 1 449.4 449.8Net Cash 1,277.4 1,179.4Total Long-Term Liabilities 1 544.6 552.8Sub Total 732.8 626.6Preferred Stock 0.0 0.0Liquidation Value 732.8 552.8Common Share Outstanding 88.0 87.6Net Liquidation Share $8.33 $7.15

Share Price:$ 30.9

Share Price:$ 17.1

However Liabilities’ coefficients are one because even if the company

goes bankrupt, all the liabilities, such as accounts payable, all kind of

expenses, lease credits, debt,… will remain the same

10.8

0.30.8

0.8

1

0.5

1

0.50.5

626.6

$8.33

732.8

1,629.21,726.72,804.82,821.9

732.8 626.6

$7.1526.96%

41.82%%

$Millions, except for Share data Coefficient B/S Value 2009 B/S Value 2008 Bankruptcy 2009 Bankruptcy 2008

Current AssetsCash and Equivalents 1 563.1 481.2 563.1 481.2Receivables 0.8 381.9 474.9 305.5 379.9Marketable Securities 0.8 0.0 0.0 0.0 0.0Short-Term Investments 0.8 584.1 338.7 467.3 271.0Inventories 0.3 504.0 525.1 151.2 157.5Deferred Tax Assets 0 103.0 101.8 0.0 0.0Other Current Assets 0.8 139.7 135.0 111.8 108.0Total Current Assets 2,275.8 2,056.7 1,598.9 1,397.6Property and Equipment 0.5 697.2 651.6 348.6 325.8Non-Current Investments 0.5 75.5 29.7 37.8 14.9Deferred Tax Assets 0 101.9 102.8 0.0 0.0Goodwill 1 986.6 966.4 493.3 483.2Intangible Assets 1 363.2 348.9 109.0 104.7Other Assets 0.5 148.7 200.4 74.4 100.2Total Fire Sale Assets 4,648.9 4,356.5 3,409.4 3,153.8Total Current Liabilities 1 747.3 674.1Net Cash 2,662.1 2,479.7Total Long-Term Liabilities 1 785.0 947.3Sub Total 1,877.1 1,532.4Preferred Stock 0.0 0.0Liquidation Value 1,877.1 1,532.4Common Share Outstanding 98.2 99.2Net Liquidation Share $19.11 $15.45

0.8

0.3

0.8

1

0.8

0.5

00.5

0.80

Comparative Bankruptcy Balance SheetPolo Ralph Lauren

Share Price:

$ 86.24

Share Price:

$ 43.95

Both liquidation value per share for 2009 and 2008 are lower than the share prices.

It means that RL will not go out of business and that their stocks prices were

not under evaluate. Liquidation value/share increase by

23.69%, which is a huge increase (7.19% increase more than ANF), however as the

price of share increase by 96.22%, it means that stockholders would have to

put more money inside the company but in case of bankrupt they will receive less.

(35.15% of the share price in 2008 and only 22.16% in 2009) Therefore, less

compensations for the stockholders in case of bankruptcy

0.5

1

1

14,648.9 4,356.5

1,877.1

3,409.4 3,153.8

$19.11 $15.45

1532.4

1,877.1 1532.422.16%

35.15%

Legal• Both of our companies are

involved in legal proceeding and are subject to claims like:

• Those trials could have a negative impact on the Company’s reputation or relations with its employees, customers, licensees or other third parties

Employment issues

Breach of contract

Consummer matters

Intellectual property

Credit card fraud

Employment issues

Breach of contract

Minor share holding issue

ANF AND RL IN THE NEWS

Hot News• Cotton soaring to all-time highs

(tight market fear)

• U.S. apparel retailers to take advantage of eco. recovery

boost prices (1st time in 10 to 15 years) but will cause slowing in consumer spending

A&F to close one Distribution Center (DC) to trim expenditures “hold down costs and raises some prices” (CEO M. Jeffries)

Cotton Futures Prices (Daily)

+400%

+90%

Hot News: Jeffries’ Whims

Or when the CEO is expensive…

HERE I AM!

“The chief executive of Abercrombie & Fitch is being paid $4m (£2.6m) to curb his personal use of the company plane.”

BBC.com

“Mr Jeffries' personal use of the plane averaged about $850,000 a year between 2006 and 2008.”

BBC.com

Hot news

• The long-awaited first Abercrombie & Fitch store has now opened in London

• You'll find 'store models' instead of shop assistants selling preppy all-American college clothes!!!!

• A storm of publicity was generated by their half-naked models and sexed-up Bruce Weber ad campaigns

Hot News

• New RL Gang• 10th Anniversary of the

Pink Pony collection• In support of the 10th

anniversary, four pink limited edition items were created to help mark this momentous occasion

• alligator Ricky 33 bag• alligator Cooper Check

Book Wallet• alligator cuff with

Cooper Lock• Stirrup timepiece in

rose gold

Thank you for your attention