PART VI

INFORMATION ON THE GROUP

1. INTRODUCTION

The Group is the world's largest speciality retail jeweller and operates leading operations in both the US and UK. The US market accounts for approximately 50 per cent of worldwide jewellery sales and the UK market for around 7 per cent.

The Group is the largest US speciality retail jeweller by sales having an approximate 4.2 per cent share of the $65.5 billion total jewellery market from 1,399 stores in 50 states at 2 February 2008. The Group's mall stores trade nationwide as Kay Jewelers, and regionally under a number of well-established and recognised names. Destination superstores trade as Jared The Galleria Of Jewelry.

In the UK, the Group is the largest speciality retailer of fine jewellery with 563 stores at 2 February 2008 and an approximate 12 per cent share of the £4.5 billion total jewellery market. Primarily situated in shopping malls or prime "High Street" locations (main shopping thoroughfares with high pedestrian traffic), the stores trade as "H.Samuel", "Ernest Jones" and "Leslie Davis".

The Group aims to build long term value through focussing on the customer by providing a superior merchandise selection in high quality real estate locations. Effective advertising draws consumers into the stores, where they are provided with outstanding service. The operating philosophies that help the Group achieve these aims are:

• excellence in execution;
• test before we invest;
• continuous improvement; and
• disciplined investment.

The Group's strategy to deliver shareholder value is to:

• continue to achieve sector leading performance standards on both sides of the Atlantic;
• increase store productivity in the US and the UK;
• grow new store space in the US; and
• maintain a strong balance sheet.