Agent Provocateur by liz borchert

ANNUAL REPORT 2012

Agent Provocateur

CONTENTS

2012

2 SUMMARY

7 COLLECTIONS Lingerie Bridal Beach Home

Activity Report Financial Highlight Review of Operations

5 SHAREHOLDERS Board of Directors Stock Highlights

15 FINANCIALS

FROM THE CHAIRMAN 2013 was Agent Provocateur â&#x20AC;&#x2122;s best

ends in bureaucratic paralysis in

year ever. Since the IPO in 1997 both

the organization and the loss of the

turnover and EBITDA have risen more

prosperity acquired.

than threefold. EBITDA now exceeds

We are now seeing this process in

50 million euro. The proposed dividend

all areas of society on a daily basis.

also evolved in the same way, from

Everyone expects and demands more

0.70 euro to 2.15 euro. This wonderful

and wants these expectations and

achievement is no guarantee for the

demands formalized in strict rules

future. It is unjust and dangerous to

and regulations. Groups and even

expect or even demand constant

entire nations turn in on themselves

growth from a company without the

in the conviction that they are right.

odd stutter.

However, history teaches us that great prosperity can only thrive in open,

It is reminiscent of Toujours Plus by

cosmopolitan environments where

FranĂ§ois de Closets, a bestseller

business is given great freedom.

from 1982 that has since undeservedly been forgotten. It describes how

productive and the driving force

a society or sections of a society

behind it is often nothing more than

that have acquired a great deal in

a civilized form of plundering. Just

the past rightly or wrongly not only

as the creation of complex virtual

expect this situation to continue but

assets is often simply sophisticated

also to acquire more and more. This

deception.

pressure is then formalized in some way. De Closets says that this always

Evelyn Stewart Everlyn Stewart CEO & Chairman Agent Provocateur

Agent Provocateur

BOARD OF DIRECTORS

2012

Garry Hogarth Chief Executive Officer Garry Hogarth was formally appointed Chief Executive Officer in November of 2004 having served as Interim CEO since July 2004. In this role, she is responsible for leading the continued growth of all Agent Provocateur businesses. Mr. Hogarth 5 years at BSkyB and was General Manager of Movies & Pay-Per-View when he left to join Agent Provocateur. Prior tothat she served as Director of Advertising Sales at US Gold and US Living. Mr. Hogarth also worked at Channel Four from 1992 to 1996, and heldposts at various advertising agencies including JWT, McCanns, Lowe Howard-Spink and GeersGross.

Dene Stratton Chief Financial Officer Dene Stratton was appointed Chief Financial Officer and a member of the Management Board in January 2005. He isresponsible for all aspects of finance, administration, business development and investor relations. Prior to joining Victoria’sSecret he worked at The Limited, as Senior Vice President, Planning & Control at Limited Inc., having held a number of roles within Limited since 1990. He began his career in public accounting with Ernst & Young in Los Angeles.

Olivier Spiner Executive Vice President of International Affairs Olivier Spiner was appointed as a member of the Management Board and Executive Vice President of International Affairsin November 1999, and is responsible for the Agent Provocateur corporate activities. Prior to joining Agent Provocateur heserved as Deputy General Manager of The Limited from 1996 and before this, from 1982, he held the positions of DeputyGeneral Manager and Chief Financial Officer at Créativité and Développement.

Oliver Fryer General Counsel Oliver Fryer was appointed as a member of the Management Board in September 2003. In his role, he is responsible for allof the Agent Provocateur contractual, legal and business affiairs issues. He previously served as Director of Legal and Business Affiairs for Agent Provocateur. Before joining the company in June 2001, Mr. Fryer worked for The Simkins Partnership and forZenith Entertainment plc, where for several years he was Director of Legal and Business Affairs.

Agent Provocateur

STOCK HIGHLIGHTS

2012

A YEAR IS JUST ONE IN ETERNITY AFTER ALL. WHEN YOU BUILD UP A COMPANY YOU FOCUS ON INFINITY, NOT ON A BUDGET OR A MULTI-YEAR PLAN. A ‘SUSTAINABLE BUSINESS’ HAS NOTHING TO DO WITH THE ENVIRONMENT OR THE UNDERPRIVILEGED. THAT IS AN ALL TOO COMMON MISCONCEPTION. SUSTAINABLE MEANS BEING ABLE TO REMAIN STRONG IN THE LONG TERM AND DOING THE RIGHT THINGS EVERY DAY TO STRENGTHEN THAT SUSTAINABILITY.

24.5%

INCREASE IN NET SALES 2012

2011 $8,560,323

$9,460,323

Garry Hogarth was formally appointed Chief Executive Officer in November of 2004 having served as Interim CEO since July 2004. In this role, she is responsible for leading the continued growth of all Agent Provocateur businesses. Mr. Hogarth 5 years at BSkyB and was General Manager of Movies & PayPer-View when he left to join Agent Provocateur. Prior tothat she served as Director of Advertising Sales at US Gold and 2012 growth in percentage by thousands 2011 overall sales by thousands

12.7% *in thousands

ANNUAL GROWTH RATE 2011 $8,560,323

2012

$9,460,323

Chief Executive Officer in November of 2004 having served as Interim CEO since July 2004. In this role, she is responsible for leading the continued growth of all Agent Provocateur businesses. Mr. Hogarth 5 years at BSkyB and was General Manager of Movies & Pay-Per-View when he left to join Agent Provocateur. Prior tothat she served as Director of Advertising Sales at US Gold and US Living. Mr. Hogarth also worked at Channel Four from 1992 to 1996, and heldposts at various advertising agencies

Agent Provocateur

FINANCIAL HIGHLIGHTS

2012

Dollars in thousands except per share amounts

2012

2011

% Change

$8,560,323

$7,560,309

10.8

Earnings before income tax expense

1,120,321

878,908

24.9

Net earnings

677,323

477,322

23.0

Basic earnings per share

2.60

2.01

28.1

Diluted earnings per share

2.33

1.98

28.9

FISCAL YEAR Net Sales

Sales per Square Foot and Same-store Sales Percentage Change

Gross Profit (as a Percentage of Net Sales)

SG&A Expense (as a Percentage of Net Sales)

Earnings before Income Tax Expense (as a Percentage of Net Sales)

Inventory Turn (cost of sales and related buying and occupancy divided by average inventory)

Cash Flow from Operations (in millions)

Agent Provocateur

ACTIVITY REPORT

2012

Retail Agent Provacateur continues to at-

ing to 85%, acquired a majority in the

The brand Agent Provocateur was ac-

tach importance to its own retail

Board of Directors, reached agree-

quired in the Netherlands. This retail

formats, but only alongside spe-

ment on guaranteed market share of

format unites 41 independent multi-

cialty boutiques. These remain es-

its brands in the Intimacy stores and

brand boutiques under a single flag.

sential. We address consumers with

handed the operational management

It is Agent Provocateur’s mission to

a combination of the two, and it is

to Susan and David Nethero for a set

constantly offer added value to both

on both that we should be judged.

period. Intimacy grew to 13 stores and

consumers (through its boutiques and

The main advancement was phase 2

is gradually securing a national pres-

its offering) and members (through

in the alliance with Intimacy. Agent

ence in the United States. It was not

relevant, efficient added value). Agent

Provacateur increased its sharehold-

easy, however. The crisis is not over.

Provacateur feels it is its core mission

Our customers continues to attach

to 85%, acquired a majority in the

The brand Agent Provocateur was ac-

importance to its own retail formats,

Board of Directors, reached agree-

quired in the Netherlands. This retail

but only alongside specialty bou-

ment on guaranteed market share of

format unites 41 independent multi-

tiques. These remain essential. We

its brands in the Intimacy stores and

brand boutiques under a single flag.

address consumers with a combi-

handed the operational management

It is Agent Provocateur’s mission to

nation of the two, and it is on both

to Susan and David Nethero for a set

constantly offer added value to both

that we should be judged. The main

period. Intimacy grew to 13 stores and

consumers (through its boutiques and

advancement was phase 2 in the

is gradually securing a national pres-

its offering) and members (through

alliance with Intimacy. Agent Pro-

ence in the United States. It was not

relevant, efficient added value). Agent

vacateur increased its shareholding

easy, however. The crisis is not over.

Provacateur feels it is its core mission

Customers

Agent Provocateur

OUR STORES

2012

NOT ONLY DO WE PRIDE OURSELVES ON OUR EROTIC CLOTHING, BUT OUR STORES THEMSELVES ARE JUST AS DECORATIVE AND ELOQUENT. WITH STORES IN 5 CONTINENTS, AND OVER 40 STORES, WE ALWAYS HAVE ROOM TO... PLAY. OUR FLAGSHIP STORES IN MANHATTAN, AMSTERDAM, AND LOS VEGAS EXEMPLIFY JUST HOW CREATIVE AGENT PROVOCATEUR GETS WITH THEIR EVERY DETAIL TO MAKE YOU FEEL WILDLY SEXY.

United Kingdom

Bicester Village Birmingham, Selfridges Glasgow London, Broadwick Street London, Harrods London, Pont Street London, Royal Exchange London, Selfridges London, Westbourne Grove Manchester, King Street Manchester, Selfridges Trafford

Europe

Amsterdam, De Bijenkorf Athens Berlin, Galeries Lafayette Copenhagen Geneva Istanbul, Harvey Nichols Lausanne Ljubljana Madrid Marbella

Milan, La Rinascente Munich, Ludwig Beck Paris, Printemps Prague Rome, Gente Stockholm Stuttgart, Breuninger Vienna Zurich, Baerengasse Zurich, Jelmoli

USA

Boston Chicago Costa Mesa, Bloomingdale’s Las Vegas Los Angeles, Melrose Avenue Los Angeles, Rodeo Drive Miami, Bal Harbour Miami, Coral Gables New York, Bloomingdale’s New York, Madison Avenue New York, Mercer Street San Francisco

Caribbean Barbados

Asia

Hong Kong, Lane Crawford Seoul, Cheongdamdong Seoul, Shinsegae

Middle East

Beirut, ABC Dbayé Mall Doha, The Qatar Pearl Dubai, Dubai Mall Dubai, Dubai Saks 5th Avenue Manama, Bahrain Moda Mall

Russia

Moscow, Moscow, Moscow, Moscow, Moscow, Moscow,

Crocus City Mall European Mall Malaya Bronnaya Stoleshnikov TsUM Smolenskaya Square

Agent Provocateur

LINGERIE HOLLY BRIDAL COLLECTION SPRING 2012 | Seduce and romance in the beautiful bridal collection from agent provocateur - perfectly marrying genuine sensuality and tempting sophistication.

2012

Agent Provocateur

LINGERIE AFTER A

2012

GROWTH IN TURNOVER OVER TWO YEARS PERHAPS IT WAS TIME TO PAUSE.

Agent Provacateur continues to

to attach importance to its own

attach importance to its own retail

The crisis is not over. The brand

retail formats, but only alongside

formats, but only alongside specialty

Agent Provocateur was acquired in

specialty boutiques. These remain

boutiques. These remain essential.

the Netherlands. This retail format

essential. We address consumers with

We address consumers with a

unites 41 independent multibrand

a combination of the two, and it is on

combination of the two, and it is on

boutiques under a single flag. It

both that we should be judged.

both that we should be judged. The

is Agent Provocateurâ&#x20AC;&#x2122;s mission to

main advancement was phase 2 in the

constantly offer added value to both

The main advancement was phase

alliance with Intimacy.

consumers (through its boutiques and

2 in the alliance with Intimacy.

its offering) and members (through

Agent Provacateur increased its

relevant, efficient added value).

shareholding to 85%, acquired a

Agent Provacateur feels it is its core

majority in the Board of Directors,

mission to invest major efforts here.

reached agreement on guaranteed

In Germany, Oreia (launched in late

market share of its brands in the

2009) was implemented in six stores.

Intimacy stores and handed the

operational management to Susan

Oreia experienced minimal growth

and David Nethero for a set period.

(store to store), but after 30% (store

Intimacy grew to 13 stores and is

to store) growth in turnover over

gradually securing a national presence

gradually securing a presence in the

two years it was perhaps time to

in the United States. It was not

United States.

pause. Agent Provacateur continues

easy, however. The crisis is not over.

Agent Provocateur

BRIDAL HOLLY BRIDAL COLLECTION SPRING 2012 | Seduce and romance in the beautiful bridal collection from agent provocateur - perfectly marrying genuine sensuality and tempting sophistication.

2012

Agent Provocateur

BRIDAL

2012

Annual sales in bridal alone

412,379 *in thousands

Agent Provacateur continues to

the Netherlands. This retail format

The main advancement was phase

attach importance to its own retail

unites 41 independent multibrand

2 in the alliance with Intimacy.

formats, but only alongside specialty

boutiques under a single flag. It

Agent Provacateur increased its

boutiques. These remain essential.

is Agent Provocateurâ&#x20AC;&#x2122;s mission to

shareholding to 85%, acquired a

We address consumers with a

constantly offer added value to both

majority in the Board of Directors,

combination of the two, and it is on

consumers (through its boutiques and

reached agreement on guaranteed

both that we should be judged. The

its offering) and members (through

market share of its brands in the

main advancement was phase 2 in the

relevant, efficient added value).

Intimacy stores and handed the

alliance with Intimacy.

Agent Provacateur feels it is its core

operational management to Susan

mission to invest major efforts here.

and David Nethero for a set period.

Agent Provacateur increased its

In Germany, Oreia (launched in late

Intimacy grew to 13 stores and is

shareholding to 85%, acquired a

2009) was implemented in six stores.

gradually securing a national presence

majority in the Board of Directors,

in the United States. It was not

reached agreement on guaranteed

Oreia experienced minimal growth

easy, however. The crisis is not over.

market share of its brands in the

(store to store), but after 30% (store

The brand Agent Provocateur was

Intimacy stores and handed the

to store) growth in turnover over

acquired in the Netherlands. This

operational management to Susan

two years it was perhaps time to

retail format unites 41 independent

and David Nethero for a set period.

pause. Agent Provacateur continues

multibrand boutiques under a flag.

Intimacy grew to 13 stores and is

to attach importance to its own

gradually securing a presence in the

retail formats, but only alongside

It is Agent Provocateurâ&#x20AC;&#x2122;s mission to

United States.

specialty boutiques. These remain

constantly offer added value to both

essential. We address consumers with

consumers (through its boutiques and

The crisis is not over. The brand

a combination of the two, and it is on

its offering) and members (through

Agent Provocateur was acquired in

both that we should be judged.

relevant, efficient added value).

Agent Provocateur

beach HOLLY BRIDAL COLLECTION SPRING 2012 | Seduce and romance in the beautiful bridal collection from agent provocateur - perfectly marrying genuine sensuality and tempting sophistication.

2012

Agent Provocateur

BEACH THIS YEAR OUR BATHING SUIT SALES WENT UP BY

2012

Agent Provacateur continues to

The crisis is not over. The brand

retail formats, but only alongside

attach importance to its own retail

Agent Provocateur was acquired in

specialty boutiques. These remain

formats, but only alongside specialty

the Netherlands. This retail format

essential. We address consumers with

boutiques. These remain essential.

unites 41 independent multibrand

a combination of the two, and it is on

We address consumers with a

boutiques under a single flag. It

both that we should be judged.

combination of the two, and it is on

is Agent Provocateurâ&#x20AC;&#x2122;s mission to

both that we should be judged. The

constantly offer added value to both

The main advancement was phase

main advancement was phase 2 in the

consumers (through its boutiques and

2 in the alliance with Intimacy.

alliance with Intimacy.

its offering) and members (through

Agent Provacateur increased its

relevant, efficient added value).

shareholding to 85%, acquired a

Agent Provacateur increased its

Agent Provacateur feels it is its core

majority in the Board of Directors,

shareholding to 85%, acquired a

mission to invest major efforts here.

reached agreement on guaranteed

majority in the Board of Directors,

In Germany, Oreia (launched in late

market share of its brands in the

reached agreement on guaranteed

2009) was implemented in six stores.

Intimacy stores and handed the

market share of its brands in the

operational management to Susan

Intimacy stores and handed the

Oreia experienced minimal growth

and David Nethero for a set period.

operational management to Susan

(store to store), but after 30% (store

Intimacy grew to 13 stores and is

and David Nethero for a set period.

to store) growth in turnover over

gradually securing a national presence

Intimacy grew to 13 stores and is

two years it was perhaps time to

in the United States. It was not

gradually securing a presence in the

pause. Agent Provacateur continues

easy, however. The crisis is not over.

United States.

to attach importance to its own

The brand Agent Provocateur was

Agent Provocateur

HOME HOLLY BRIDAL COLLECTION SPRING 2012 | Seduce and romance in the beautiful bridal collection from agent provocateur - perfectly marrying genuine sensuality and tempting sophistication.

2012

Agent Provocateur

HOME & ACCESSORIES

2012

OUR SHEETS ARE MADE FROM

100 silk %

Agent Provacateur continues to

the Netherlands. This retail format

The main advancement was phase

attach importance to its own retail

unites 41 independent multibrand

2 in the alliance with Intimacy.

formats, but only alongside specialty

boutiques under a single flag. It

Agent Provacateur increased its

boutiques. These remain essential.

is Agent Provocateurâ&#x20AC;&#x2122;s mission to

shareholding to 85%, acquired a

We address consumers with a

constantly offer added value to both

majority in the Board of Directors,

combination of the two, and it is on

consumers (through its boutiques and

reached agreement on guaranteed

both that we should be judged. The

its offering) and members (through

market share of its brands in the

main advancement was phase 2 in the

relevant, efficient added value).

Intimacy stores and handed the

alliance with Intimacy.

Agent Provacateur feels it is its core

operational management to Susan

mission to invest major efforts here.

and David Nethero for a set period.

Agent Provacateur increased its

In Germany, Oreia (launched in late

Intimacy grew to 13 stores and is

shareholding to 85%, acquired a

2009) was implemented in six stores.

gradually securing a national presence

majority in the Board of Directors,

in the United States. It was not easy,

reached agreement on guaranteed

Oreia experienced minimal growth

market share of its brands in the

(store to store), but after 30% (store

Intimacy stores and handed the

to store) growth in turnover over

operational management to Susan

two years it was perhaps time to

and David Nethero for a set period.

pause. Agent Provacateur continues

Intimacy grew to 13 stores and is

to attach importance to its own

gradually securing a presence in the

retail formats, but only alongside

United States.

specialty boutiques. These remain essential. We address consumers with

The crisis is not over. The brand

a combination of the two, and it is on

Agent Provocateur was acquired in

both that we should be judged.

however.

Agent Provocateur

CONSOLIDATED INCOME STATEMENT

000 dollars

2012

2010

2009

(Note)

Turnover Other operating income Cost of materials Other expenses Personnel expenses Depreciation and amortization Operating profit

89,023 28,658 22,159 20,726 15,125 1,227 1,128

65,634 2,469 12,630 19,040 25,017 3,920 2,558

4 5 6 7 16 8

Finance income Finance costs

92,885 32,814

83,680 25,859

Share in profit of associates

181,908

149,314

Profit before taxes Income taxes

153,643 1,936

135,732 1,936

Profit for the year

39,937

26,596

163,262

144,949

8,089 3,286 519

0 2,334 724

15 16 17

Other comprehensive income Currency translation adjustments Net movement on cash flow hedges Total other comprehensive income Total of profit for the period and other comprehensive income

12,596

18,596

20,596

26,596

39,937

2012 PROFIT

14 14

Agent Provocateur

Consolidated balance sheet 000 dollars

2012

2010

2009

(Note)

Assets Total fixed assets Goodwill Intangible assets Tangible fixed assets Participations (equity method) Deferred tax asset Other fixed assets

89,023 28,658 22,159 20,726 15,125 1,227 1,128

65,634 2,469 12,630 19,040 25,017 3,920 2,558

4 5 6 7 16 8

Curent assets Inventories Trade and other receivables Other current assets Cash and cash equivalents

92,885 32,814 14,222 7,602 38,247

83,680 25,859 13,338 4,122 40,361

10 11 12 13

Total assets

181,908

149,314

Equity and liabilities Shareholdersâ&#x20AC;&#x2122; equity Share capital Treasury shares Share premium Other comprehensive income Retained earnings Non-controlling interests

153,643 1,936 -2,506 743 -9,792 163,262 8,089

135,732 1,936 - 2,625 743 -9,271 144,949 0

Total non-current liabilities Provisions Pensions Deferred tax liabilities Other non-current liabilities Total current liabilities Trade and other payables Other current liabilities Income taxes payable

3,286 519 36 0 2,731 16,890 16,436 431 23

2,334 724 33 16 0 11,248 10,721 311 216

Total equity and liabilities

181,908

149,314

MARKS OUR SEXIEST YEAR

IN 2012 WE SAW AN

14 14

14 15 16 17 18 19 19

82%INCREASE IN SALES OVERSEAS

Agent Provocateur

OUR NEXT MOVES

2012

“THE PEOPLE WHO WORK HERE ARE SO PASSIONATE ABOUT THE BRAND IT WOULD BE IMPOSSIBLE NOT TO BE POSITIVE ABOUT THE FUTURE,”

Corré, who is the son of designer

coming months. “By the end of the

so much with Agent Provocateur -

Vivienne Westwood and ex-Sex Pis-

week we will have signed a fragrance

he wanted to move on to new chal-

tols manager Malcolm McLaren, will

deal, jewellery is coming in association

lenges,” Hogarth told VOGUE.COM

remain a shareholder of the lingerie

with BJB, sunglasses, umbrellas and

this afternoon. “The business is going

brand but will have no creative input.

we are also in talks about bedding

well; we are four per cent up on last

He will concentrate on his menswear

which fits the brand perfectly. We

year and we have a very strong design

label, A Child of the Jago, and other

also have about seven international

team, so we are very confident about

store openings projected for this year;

the future. We won’t be looking to

It seems the product will continue

including Moscow, Switzerland, Korea,

replace Joe.”

as before without Corré, as Hogarth

Malaysia, Spain and Eastern Europe.”

revealed that he has not designed the

“The people who work here are so

Corré, who is the son of designer

collections over recent seasons but

passionate about the brand it would

Vivienne Westwood and ex-Sex Pis-

rather has overseen the work of head

be impossible not to be positive about

tols manager Malcolm McLaren, will

designer Sarah Shotton -who has

the future,” he enthused. JOE CORRÉ

remain a shareholder of the lingerie

been with the brand for 10 years. She

co-founder of lingerie label Agent

brand but will have no creative input.

will continue to produce the range

Provocateur - has left the business,

He will concentrate on his menswear

with her team.And as for the future of

the company’s ceo Garry Hogarth told

label, A Child of doom.

Agent Provocateur? “Over the past few months Joe has “We have several licensing deals in

been focusing on other projects and

the pipeline,” Hogarth revealed of the

I think he just felt - having achieved