The new business model



Legal grounds:
Art. 17 Section 1 of MAR – confidential information

In connection with entering into force on 24 March 2017 direct licensing agreements and agency agreement concluded with IIC-INTERSPORT International Corporation GmbH (INTERSPORT License Agreement, own brands license agreement and agency agreement in terms of purchases, referred to collectively as "the Agreement with the IIC" - described in current reports No. 18 of 9 March 2017 and No. 24 of 22 March 2017) and in connection with the adoption by the Extraordinary General Meeting of INTERSPORT Poland SA on 15 March 2017 a resolution No. 4 on the share capital increase by issuing new shares of series F, which allows the Company for additional funding through the issuance of new shares, the Management Board of INTERSPORT Poland SA with its registered office in Cholerzyn ("IPL", the "Company") on 22 March 2017 adopted a resolution on the implementation of the "New IPL Business model” which, in the opinion of the IPL Management will have a positive impact on he improvement of the market position and the Company’s financial results.

"The new business model of IPL" assumes:
I. Obtaining an independent license for INTERSPORT brand, direct access to the purchase of own brands:
1. From 2005 IPL operated basing on a sub license of INTERSPORT brand and purchased own INTERSPORT brands through INTERSPORT Deutschland eG, at the purchase prices valid in that German cooperative. In connection with obtaining from IPL independent license since 24.03.2007 IPL may buy its own brands directly in factories in Asia and Europe, at prices negotiated by IICINTERSPORT International Corporation GmbH, the largest worldwide player in the retail market of sports goods.
2. Access to favourable purchase prices of INTERSPORT own brands creates new business opportunities:
a. IPL can offer to customers lower retail prices of products offered so far, which should result in an increase in sales, due to the improvement of their competitiveness.
b. IPL will also gain access to the product at a lower price level, which was not previously not offered by the German agent. This creates additional opportunities to offer our customers products with better pricing structure tailored to the realities of the Polish market.
c. Thanks to lower purchase prices, IPL will have the opportunity to realize higher than previously margins, as well as be able to react more flexibly to current sales trends. This should also result in improved turnover of own brands
d. Given the above, IPL intends ultimately to double the share of INTERSPORT own brands in its offer - to a level of about 25% of sales.
3. New products ordered directly by IPL, will appear in IPL stores at the end of 2017.

II. Strategic brands: access to discounts, better selectivity.
Due to the new share issue carried out in March 2017 the Company raises additional funds that will allow her to realize faster payments to suppliers and therefore she can receive additional discounts. In addition,
increasing the share of private labels in sales, will allow a more selective approach to the selection of collection of goods ordered from strategic brands. Both of these factors (additional discounts and greater
selectivity) should improve the margin on sales of strategic brands.

III. Launching a new Internet platform in the second quarter of 2017, integrated with the sale in retail shops.
Implementation of this modern solution, in conjunction with access to products with a lower price level, will significantly increase the turnover of e-shop. We assume that the target share of online sales may
reach 10% of total sales.

IV. Completion of the shops chains optimization process:
In 2016, IPL closed 3 unprofitable stores. In the first quarter of 2017, in connection with scheduled termination of contracts, IPL closed two stores and by the end of the year it intends to close one more
store. One-time costs of closing these stores are charged to current results, but in the long run, the fact of the resignation of unprofitable outlets will positively affect the Company's results.

V. Development:
IIC - INTERSPORT International Corporation GmbH - INTERSPORT brand licensor - developed a model of the development of new formats, sports shops, which are being tested in many countries. In addition to the
model concept of general sport store INTERSPORT proposed the implementation of specialty shops formats such as for example fitness-running, team sports, outdoor and budget. IPL analyses the possibility
of introducing new concepts on the Polish market and plans to return to the development of the sales network after the successful completion of the restructuring and implementation of a new business model.


Załączniki
sport to the people