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Annual Shareholder’s Meeting

April 23, 2008

Executives:

Cierra Crowder

Kesha Haley

Justin Hearon

Vien Nqyuen

Andre Pardue

DESIGNER FOOTWEAR

Mission Statement

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Designer Footwear strives to focus on the needs of

the modern day consumer when selecting materials,

introducing designs, and manufacturing its quality

footwear.

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Designer Footwear Overall Goals

• Maintain credit rating of A-– Debt payoffs with each debt issuance

– Year 12: Borrowed $100,000K, Paid off Y7 $112,000K loan and Y9 $24,000K loan

– Year 13: Borrowed $130,000K, Paid off Y12 $100,000K loan

• EPS 20% higher than investor expectation every year

• ROE 5% higher than investor expectation every year

• Reach and maintain at least 80 image rating– Price

– Branded Distribution

– Revenues

– Private Label

• Steadily gain market share while maintaining a positive profit margin per shoe

• Maintain celebrity appeal of at least 100 in each region

• Higher S/Q rating than industry average– Implement Plant Upgrade Option C

– Right combination of:• Superior Materials

• TQM / Six Sigma Quality Program

• Enhanced Styling Features

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S/Q Rating:Designer Footwear vs. Industry

Average

0

1

2

3

4

5

6

7

8

9

10S

/Q R

atin

g

Designer Footwear

Industry Average

Y11 Y13Y12 Y14 Y15 Y16 Y18Y17 Y19

Proj.

Y20

Proj.

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Implementation Strategies

• Focus on direct competitors

– Best Brand Footwear

– Innovative Footwear

• Indirect competitors

– Happy Feet Footwear

– Gains Shoe Footwear

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Strategic Group Maps

YEAR 11 YEAR 18

FewProduct Line Breadth

ManyModels Models

Low

End

Pri

ce a

nd

S/Q

Rat

ing

Strategic Group Map

High

WHOLESALE SEGMENT

End

FewProduct Line Breadth

ManyModels Models

Low

End

Pri

ce a

nd

S/Q

Rat

ing

Strategic Group Map

High

WHOLESALE SEGMENT

End

Year 11 “The Beginning”

• Differentiation

Strategy

• Designer Footwear

value-chain activities

– HR Management

– Inbound/Outbound

logistics

• Designer footwear

focused on

– Pricing

– Quality

– Advertising/Celebrity

Endorsement

– S/Q rating

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Year 12

• Goal: Build Capacity for use in Year 14

• Actions

– Implemented Plant Upgrade option A in North

America and Asia-Pacific

– Issued $.10 dividend

– Took advantage of exchange rates

• NAFTA

• Shift production to L.A

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Year 12

• Took out a loan $100 million

– Took advantage of lower interest rates

• Consolidated debt

– Opened plant in L.A

• 1,000,000 pairs self-construction

• Inventory clearance 50%

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Year 13 Initiatives• Increased S/Q rating by 1 star in each region

– 10 Star S/Q rating/Competitive Advantage

• Reduced Asia-Pacific production run set-up cost

by 50%

• Additional Construction L.A. and A.P.

– Increased capacity by 700K to meet demand

• 130 Million to Finance Construction and pay off

existing loan

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Year 14 Initiatives

• Reduced production set-up costs by 50%

– $8 Million capital outlay to Latin America

• Significant celebrity endorsement

– Highest market share in each region

– 13.1% N.A, E.A., A.P. and 13.9% in L.A.

– Highest celebrity appeal in each region

12

0

20

40

60

80

100

120

140

160

180

N.A. E.A. A.P. L.A.

DesignerFootwear

IndustryAverage

Y14 Celebrity AppealDesigner Footwear vs. Industry Average

• North America– Designer Footwear: 155

– Industry Average: 71

• Europe-Africa– Designer Footwear: 130

– Industry Average: 73

• Asia-Pacific– Designer Footwear: 160

– Industry Average: 67

• Latin America– Designer Footwear: 165

– Industry Average: 73

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Year 15 Strategies

• Constructed additional 1.2 million capacity- 700,000 in Latin America

- 500,000 in Asia Pacific

• Increase superior materials to 90 percent

- Achieve 9 S/Q rating

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Year 16

• Huge increase in spending for celebrity

endorsements

• First in Industry to achieve 10 S/Q rating

• Increase models available from 250 to 350

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Year 17 – Building More Capacity• Past Results and Goals Met/Achieved.

– Increase in product demand.

– Meeting demand.

• Goal – Building and buying capacity at a discount. – Based on 13-15% market share of wholesale segment in year

16• Increased capacity in AP (800,000 pairs) and LA (1,000,000 pairs)

• Result - Competitive Intelligence Report for Y17 showed loss of sales for all regions (as expected).– Bought 2,000,000 pairs in LA at a discount.

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Year 18 – Continue to Reduce

Production Cost• Main goal

– to stay competitive in our strategic group

– gain back some market share lost in Year 17 due to lack of capacity.

• To reduce cost – sold NA plant (2,000,000 pairs) and produce solely

out of LA and AP (total capacity including overtime = 13,080 pairs)

• Stock Repurchase of 1,900,000 shares.

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Pro Forma Income Statement

• Refer to Shareholder’s guide

• Expect Net Sales – Year 19: $607,000,000

– Year 20: $634,000,000

– Year 21: $656,000,000

• Estimated net profit will be $86,000, $92,000, and

$96,000 in years 19, 20, and 21 respectively

• Net profit Margin – 14% in years 19-21

Projected Income StatementProjected Income Statement

Year 19 Year 20 Year 21

Net

Revenues $ 608,238 $ 637,545 $ 661,759

Operating

Expenses $ 479,376 $ 499,494 $ 516,461

Operating

Profit $ 128,862 $ 138,051 $ 145,298

Taxes and

Interests. $ 41,294 $ 43,639 $ 45,400

Net Profit $ 87,568 $ 94,412 $ 99,898

Outstanding

Stocks 7900 7900 7900

Earnings Per

Share $ 11.08 $ 11.95 $ 12.65

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Going Forward

“In the future, we plan to continually implement

our differentiated strategy through TQM,

enhanced styling and features, S/Q rating and

reduced production costs.”

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THANK YOU.

Questions?