The New Mashbir LazarchanPresentation

Group Profile

Retail Activity Tourism Fashion

Group Profile

Retail Activity

Only department store chain in Israel Operating 26 department stores 5 additional branches within the next two years Total commercial space: 88,000 sqm in shopping malls and

in prime locations (including new department stores 95,000)

Hamashbir’s payroll employs: 3,000 employees 1,500 vendors’ sales assistants

2,000,000 visitors a month 500,000 cash slips

Company Profile

Public company held by the Shavit group (85%) & public (15%)

Annual revenue is 1,040 M. Nis (incl. vat) Main categories

Fashion Cosmetics Jewelry & accessories Lingerie Home textiles

The customer club ‘club365’ has an active membership of: 390,000 households 525,000 card holders Representing 18% of the households in Israel

Company Profile

Over 300 of the company’s suppliers are engaged in partnership and ‘consignment’ contracts

Branch Network

Stand-AloneStores in PrimeLocations

KIRYAT SHMONA TIBERIAS NAHARIYA NAZARETH HAIFA JERUSALEM RISHON-LE-ZION ASHKELON EILAT

Leading Malls KIRION, HAKRAYOT LEV CARMEL, HAIFA GRAND KANION, HAIFA HADERA RENANIM – RA’ANANA AVNAT – PETACH-TIKVA AVIV – RAMAT AVIV AYALON – RAMAT GAN AZRIELI – TEL-AVIV DIZENGOFF CENTER – TEL AVIV MALCHA - JERUSALEM REHOVOT LEV ASHDOD HANEGEV – BEER-SHEBA BIG – NETANYA SHOPPING – BNEI-BRAQ DEAD SEA BEER-SHEVA ASHDOD KIRYAT ONO MODIIN AFULLA

N.I.S (In thousands)

P&L

P&L

The New Mashbir has a market share of 11% in the total Israeli fashion market (man &women-2006)

N.I.S (In thousands)

P&L

The New Mashbir has a market share of 11% in the total Israeli fashion market (man &women-2006)

N.I.S (In thousands)

Club 365 Club strategy:

create a high commitment to the chain whilst granting added value to the customer(rational and emotional)

Club purchases comprise over 60% of total revenue Annual membership fees: 22 us $ per couple

(11 us $ usually refunded at registration point) About 390,000 households and 525,000 valid card

holders. Advanced I.T. systems support the club’s activities, enabling

complete analysis of members’ shopping habits Profitability Frequencies shopping baskets etc.

Club 365 The club serves as a marketing platform to extend the

chain’s services and activities Unique ‘customer days’ for club members held twice a

year generate sales reaching almost 6.6 million us $ in one event

Wide data base enabling customer follow-up, consumer habits and direct mailing

Up to 30% discounts in Unique sales Average discount is 7% - 10%

Total of 16 million in discounts annually. Hamashbir will be launching a new loyalty program based

on "cash-back”

Israeli Shopping Habits

Israeli Shopping Habits

The Israeli EconomyOverview & Outlook

The Israeli Economy Main Indicator:

Population:Country Size:Urban:Ethnic CompositionJ ewish and Others:Arab:Age BreakdownUnder 15:65 and Over:

7.1 mill.22,145 sq.km91%

81.0%19.0%

28.4%9.9%

The Israeli Economy Main Indicator:

The Israeli Economy

1.97 million Households – Dec, 2005 2.1% Inflation rate – 2006 1$ : NIS 4.22 – Dec 2006 1€ : NIS 5.56 – Dec 2006 Average household monthly spending during 2006 was

$1970

Competition

Fashion DIY & Household stores NON-Food Cosmetics

Department stores

Revenue – Net (`ooo) & No. of Stores

Financial Information

Financial Information

Hamashbir’s revenue net in 2006 was 238 M$ (Inc. V.A.T). Fashion revenue net in Hamashbir was 113 M$ (Inc. V.A.T),

47% of Hamashbir total revenues in 2006.

Market Data

Shift from formal to casual wear - less suits, more jackets 3600 private clothing stores 60 brand chain stores with over 1000 branches Mainly shopping malls and large shopping centers Expected to grow during 2007, adding 20% to its revenues Chain store share expected to grow over the independent

stores.

Market Data

Market dominated by a majority of local brands: Castro Golf Polgat H&O Renuar Zip.

Leading local brands with branches overseas: Castro Fox

International brands: Celio Mango Zara

Market Data

Average retail price range for selected items (INCL. V.A.T.)

Market Data

Hamashbir Data

Dominant season - summer - 60% of sales (Revenue, however, is almost identical for both seasons (

Typical 25 years and up Conservative Not brand conscious Best value for money Quality goods at reasonable prices

Business Opportunity

Customers Club Economics of Scale Space for Additional Revenues Broad Floor Operational Platform for New

Businesses Increasing Gross Profit Ratio Only Department Store in Israel Comprehensive Geographical Coverage

See You at HAMASHBIRThank You