14 AUGUST 2012

STATEMENT TO THE AUSTRALIAN SECURITIES EXCHANGE DISCLOSURES MADE BY AUSTRALIAN RETAIL INVESTMENTS

On 10 August 2012, Country Road announced that it had received and responded to correspondence from Australian Retail Investments Pty Ltd (ARI) whereby ARI raised a number of concerns with Country Road regarding its acquisition of the Witchery Group (Witchery Acquisition) and the renounceable rights issue to raise up to approximately A$92 million of new equity (Rights Issue). The correspondence received from ARI indicated that they intended to commence proceedings against Country Road. On 13 August 2012, ARI publicly disclosed correspondence between ARI and Country Road. A copy of ARI’s public announcement (including relevant correspondence between the parties) is attached. Country Road rejects ARI’s contentions, and reiterates its view that ARI’s allegations are baseless and that all material information in relation to the Witchery Acquisition and the Rights Issue has been previously been disclosed to the market. Contrary to what has been asserted by ARI, Country Road does not consider that there is a real risk of the Witchery Acquisition not completing where the Rights Issue has completed.

Whilst Country Road considers that the disclosure of the correspondence between the parties was unnecessary, Country Road is pleased that ARI has indicated that it is no longer planning to seek a permanent injunction to prevent the dispatch of the rights issue offer booklet as previously indicated. ARI has however confirmed that it does intend to commence legal proceedings to seek access to further information and documents from Country Road but the nature of, and the basis for, those proceedings has not been disclosed to Country Road.

The Board of Country Road believes that the Witchery Acquisition is highly attractive for its shareholders and that the structure of the Rights Issue, which represents approximately half of the acquisition funding ensures that there is an equal opportunity for all shareholders to participate in the equity raising. Country Road is not aware of ARI having challenged or criticised the transaction on either of these bases. Country Road views the Witchery Acquisition as a highly attractive opportunity for the business and would welcome the participation of ARI and all other shareholders in the Rights Issue. Country Road is focused on implementing the Witchery Acquisition and the Rights Issue and will vigorously defend any attempt by ARI to frustrate these processes in the courts. Country Road intends to proceed with dispatch of the Rights Issue offer booklet tomorrow. For further information, please contact:

Angus Urquhart Hinton & Associates Phone: (03) 9600 1979 Mobile: 0402 575 684

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AUSTRALIAN RETAIL INVESTMENTS PTY. LTD. A.C.N. 074 747 292

Level 53, 101 Collins Street Melbourne Vic 3000

AUSTRALIA Tel: (61 3) 9650 6500 Fax: (61 3) 9654 6665

Country Road seeks to prevent disclosure of material information to shareholders

ARI releases correspondence with Country Road Australian Retail Investments Pty Ltd (ARI) has a number of concerns, including regarding the level of disclosure made by Country Road Limited (Country Road), in relation to its 1 for 2 renounceable rights issue (Rights Issue) and proposed acquisition of Witchery and Mimco (Acquisition). ARI has raised its concerns directly with Country Road and has sought corrective and additional disclosure for all shareholders. ARI’s principal concern was that, without full disclosure of the conditions precedent to the Acquisition, shareholders would not be in a position to objectively assess whether or not to participate in the Rights Issue. This is especially the case since there is a real risk that the Rights Issue will complete but that the Acquisition will not proceed. Country Road has sought to prevent ARI from releasing the additional disclosures made by Country Road in its correspondence with ARI. However ARI believes it is material, and that all shareholders of Country Road should have equal access to this information. Following correspondence with ARI, Country Road made some corrective disclosure to the market on 8 August 2012 and made the additional disclosures to ARI in the attached correspondence. Accordingly, ARI does not intend to seek a permanent injunction to prevent the dispatch of the Rights Issue offer booklet. However, ARI does intend to commence legal proceedings to seek access to further information and documents from Country Road.

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Arnold Bloch Leibler Level 21

Lawyers and Advisers 333 Collins Street Melbourne Victoria 3000 Australia

DX38455 Melbourne

10 August 2012 www.abl.com.au

Telephone 613 9229 9999

URGENT Facsimile 613 9229 9900

By E-mail and Courier Your Ref HXN: 1016236 Our Ref JDLLZ File No. 011724719

Hiroshi Narushima and Janine Ryan Contact

Partners Jeremy Leibler Direct 61 3 9229 9744

Gilbert and Tobin Facsimile 61 3 9916 9523 � 2 Park Street jleibler@abl.com.au

Sydney NSW 2000 Partner Leon Zwier

hnarushima@gtlaw.com.au Direct 61 3 9229 9646

jryan@gtlaw..au Izwler@abl.com.au

MELBOURNE

SYDNEY

Dear Mr. Narushima and Ms. Ryan, Partners

Re: Country Road Limited rLAC

Joseph Borenszlajn Leon Zwier

Thank you for your letter dated 9 August 2012 ("Your Open Letter"). Philip Chester Ross A Paterson Stephen L Sharp Kenneth A Gray

Set out below are our instructions Michael Jane C Sheridan

Australian Retail Investments Pty Ltd ("ARI") notes the various disclosures and Lennie N Thompson ZanenM&dirossthn

also the corrective disclosure made to the market on 8 August 2012, following Jonathan M Wenig Paul Sokolowski

ARI’s complaint as set out in Arnold Bloch Leibler’s letter of 7 August 2012 Paul Rubenstein Peter M Seidel

("ABL’s Letter"). Aex King John Mitchell Nicole Gordon Ben Mahoney

The information set out in sections 1 to 5 of Your Open Letter IS material to Sam Dollard Lily Tell

shareholders of Country Road Limited ("Country Road"), and should be ltsrg

disclosed to all of them. Country Road embarks on a slippery slope when it Lisa Mermyreather Jonathan Milner

selectively discloses information to its shareholders. John Mongolian Caroline Goulden Matthew Lees Genevieve Sexton

ARI does not accept that the contents of Your Open Letter are confidential. bler

Country Road may not unilaterally impose obligations of confidence on ARI or Nathan Briner Jonathan Caplan

its advisers when it makes disclosure to ARI, particularly when disclosure is made to ARI in its capacity as a shareholder of Country Road.

Harding James Simpson

Senior Litigation

Counsel

Moreover, in Your Open Letter you have threatened ARI that if it proceeds to Robert JHeathcete

disclose the assertions set out in ABL’s Letter to Country Road shareholders, Senior Associates Sue Kee

Country Road reserves its right to bring a claim for misleading or deceptive Jorja Cteeland Benjamin

a 5h5T

conduct against ARI and its directors. ARI must therefore be able to disclose the Kristin Vermey Teresa Ward

contents of Country Road’s response if it discloses its complaints. Jason Blankfield Christine Floor Nancy Collins Susanne Ford

ARI will deal with the contents of Your Open Letter as it deems appropriate. Kimberley M Kay Gary Saga] ac Tiffany Lucas Clare Varghese

However, in light of your assertion that its contents are confidential, which is Mdrea Towson

Lisa Lane denied, ARI will not, without prejudice to its rights, reveal the contents of Your Daniel Mote David Speise

Open Letter prior to 5 pm on Monday 13 August 2012. If Country Road wishes IO

to commence proceedings against ARI to protect its alleged confidence in Your Open Letter, we have instructions to accept service of process at our Sydney Damien Cuddihy

Daniel Snyder David Robbins Crystal Bedggnsd Geoffrey Kozrrrinsky Jeremy Lancer

ABU2307072v1 Neil Brydges

Consultants PJlan Pets AO

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Hiroshi Narushima and Janine Ryan

Arnold Bloch Leibler Gilbert and Tobin

Page: 2 Date: 10 August 2012

office. ARI will also consent to a reasonable abridgement of time to enable interlocutory proceedings to be brought on at short notice. Please ensure that any application to the Court is made on notice to Arnold Bloch Leibler and if it is not, please ensure a copy of this letter is otherwise produced to the Court.

Finally, ARt intends to commence proceedings against Country Road. Kindly let us know if you have instructions to accept service of process.

Your

z

erely

Leon Zwier Partner rrtn e ?rl

cc Simon Susman

ABLJ23070720

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Arnold Bloch Leibler Level 21 333 Collins Street

Lawyers and Advisers Melbourne Victoria 3000 Australia

DX38455 Melbourne

7 August 2012 www.abl.com.au

Telephone 613 9229 9999

URGENT Facsimile 613 9229 9900

By Post and E-mail Your Ref Our Ref JDL LZ File No. 011724719

The Secretary Contact

Country Road Limited Jeremy Leibler Direct 61 3 9229 9744

658 Church Street Facsimile 61 3 9916 9523

Richmond VIC 3121 jleibler'abl.com.au

Leon Zwier Thomas DcCountryRoad.com.au Direct 61 3 9229 9646

Facsimile 61 3 9229 9603

lzwier@abl.com.au

Dear Sir MELBOURNE

SYDNEY

Country Road Limited - proposed rights issue and acquisition of Witchery Partners Mark M Leibler AC

We act for Australian Retail Investments Pty Ltd ("ARI"), which owns 11.84% of Henry DLanner

the issued capital in Country Road Limited ("Country Road"). Joseph Rsrensztajn LeonOwior Philip Chester Ross A Paterson Stephen L Sharp

Set out below are our preliminary instructions in relation to Country Road’s Kenneth AGray

announcement to the ASX on 1 August 2012 pursuant to which it announced a Kevin F Frawley Michael NDodge

for 2 renounceable rights issue ("Rights Issue") and purchase of Witchery Jane C Sheridan LeonieRThompson

Australia Holdings Pty Ltd ("Witchery") for $172 million ("Acquisition"). Zones Mardrrossran Jonathan M Wenig Past Sokotowoki Past Rubenstein

Background Peter M Seidel Alex King John Mitchel Nicole Gordon

1.1 ARI has been a major shareholder of Country Road for more than 15 Ben Mahoney Sam Dollard

years. Lily Tett Henry Skens Andrew Sitberberg Lisa Merryweathsr

1.2 In November 1997, Woolworths International Australia Pty Ltd ("WIA") Jonathan Mil a,

made a takeover offer for 100% of the shares in Country Road. JohoMengotion CarntineGoutden Matthew Lees Genevieve Sexton

1.3 ARI declined to sell its shares to WIA, the effect of which was to prohibit Jeremy Lerbter Rick Naree

WIA from compulsorily acquiring Country Road. Nathan Sriner Jonathan Caplan Justin Vaotstra Clint Herding

1.4 ARI has concerns in relation to the business operations and affairs of James Simpson

Senior Litigation

Country Road in and the conduct of business dealings between general counsel

WIA, Woolworths Holdings Limited (South Africa) ("WHL"), (WIA’s Robert J Heathcote

Senior Associates

ultimate holding company) and Country Road in particular. Sue Kee JorjaCteetand Benjamin Marshall Kristine Vermoy

1.5 ARI also has concerns about the governance of Country Road in general Tere Ward Jasosa

etankfleld

and the lack of independence of its board, various related party Christine Fla.,

transactions undertaken with WHL and WIA r inherent conflicts of interest Nancy Collins SosxnnaFord

and Country Road’s continuous disclosure obligations in particular. Kimberley MacKay GarySe9at Trff any Locas Clam Varghese

2 Concerns in relation to the Acquisition and the Rights Issue Andrea Towson Lisa Lane Daniel Mote David Speiser

2.1 Our client is not able to objectively assess whether or not to participate Kate Logan LartaDeMeto

in the Rights Issue based on the information disclosed by Country Road. Elizabeth Steer mtntaBradtey Anetta Corkowicz Damien Cuddihy Daniel Snyder David Robbins Krystal Bedggsod Geoffrey Kozmrnsky Jeremy Lanzer

ABL/2284714v5 Neil Brydges

Consultants Allan Pets AG

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The Secretary

Arnold Bloch Leibler Country Road Limited

Page: 2 Date: 7 August 2012

2.2 First, the rights issue offer booklet lodged with the ASX on 1 August 2012 (’Offer Booklet") contains material deficiencies which must be immediately remedied to enable Country Road’s shareholders to make an informed assessment in relation to the Rights Issue.

2.3 Second, the Rights Issue may be oppressive to Country Road’s minority shareholders as the overall transaction, if completed without minority shareholders taking up their entitlements, will dilute minority shareholders and enable WIA to compulsorily acquire the minority shareholdings in Country Road.

2.4 The disclosure deficiencies outlined below constitute breaches of:

(a) sections 674, 1308 and 1041H of the Corporations Act 2001 (0th) ("Act");

(b) ASX Listing Rule 3.1 ("LR 3.1"); and

(c) ASX Listing Rule 11.1 ("LR 11.1") as interpreted by ASX Guidance Note 12 ("GN 12").

3 Material disclosure deficiencies

Conditionality of Acquisition:

3.1 Contrary to its disclosure obligations under the Act and market practice, Country Road has failed to disclose conditions precedent to the Acquisition.

3.2 Given the timing between the issue of new shares under the Rights Issue and completion of the Acquisition, there is a real risk that the Rights Issue will complete but that the Acquisition will not proceed due to the non-satisfaction of a condition precedent.

3.3 In particular, Country Road has noted that if the Acquisition does not complete, the proceeds received by Country Road pursuant to the Rights Issue will result in Country Road being overcapitalised.

3.4 This means that the conditions precedent play an extremely important role in a shareholder’s decision whether to participate in the Rights Issue. Shareholders cannot be expected to make a decision in relation to the Rights Issue without the benefit of such material information.

WHL ’s intentions regarding compulsory acquisition:

3.5 Given that WIA would be entitled to compulsorily acquire the minority shareholders shares in Country Road should ARI not participate in the Rights Issue, WHL’s intentions for Country Road, and whether it will proceed with compulsory acquisition, is of paramount importance for a shareholder to assess whether or not to participate in the Rights Issue. Moreover the ability for WIA to compulsorily acquire all shares in Country Road provides WIA with a benefit available only to WIA and not any other Country Road shareholders.

ABL/228471 4v5

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The Secretary

Arnold Bloch Leibler Country Road Limited

Page: 3 Date: 7 August 2012

3.6 The current statement of intentions suffers from a lack of clarity and specificity. Country Road must disclose further information regarding its intentions, including, whether WHL has sought advice in relation to proceeding with compulsory acquisition and any factors that they have considered in relation to that decision.

Country Road shareholder approval - application of LR 11. 1:

3.7 The Offer Booklet contains no statement that Country Road has sought in-principal advice from the ASX or that it will be seeking a determination from the ASX regarding whether shareholder approval is required under LR 11.1 in respect of the Acquisition. This is contrary to the requirements underGN 12.

3.8 Based on information provided in the investor presentation accompanying the Offer Booklet, the Acquisition will constitute a significant change to the scale of Country Road’s activities for the purposes of LR 11. 1, as the Witchery business will clearly account for 25% or more of Country Road’s consolidated total assets.

3.9 Accordingly, Country Road is required to notify the ASX of the Acquisition ’as soon as practicable" and seek a determination from the ASX as to whether shareholder approval is required under LR 11.1, and make the appropriate disclosures.

3.10 Our client’s position is that given the significant change in scale, and the potential for compulsory acquisition of all shares, that shareholder approval should be required. In those circumstances a voting exclusion statement would necessitate Country Road to disregard any votes cast by WIA, since WIA and its ultimate holder, WHL, will obtain several benefits from the Acquisition other than solely in its capacity as an ordinary shareholder.

Lack of disclosure of risks surrounding Acquisition and Rights Issue:

3.11 The current disclosure in the Offer Booklet regarding the risks associated with the Rights Issue and the Acquisition is deficient.

3.12 ASIC requires ’clear, concise and effective’ disclosure of key risks associated with the issuer’s business and the offer, focussing on disclosure of specific rather than general risks.

3.13 First, Part B of ASIC Regulatory Guide 228, which applies to t1 ie Offer Booklet, requires that risks and benefits be disclosed in a b lanced manner. We note that the risks in relation to the Rights Issue and the Acquisition) are hidden on page 35 onwards of the Offer I Booklet, whereas the benefits of the offer are fully summarised both in the Chairman’s Letter on page 2 as well as in the announcement, Clearly, equal importance has not been allocated between the risks and benefits of the Rights Issue and the undue prominence provided to positive information is misleading.

ABL/228471 4v5

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The Secretary Arnold Bloch Leibler Country Road Limited Page: 4

Date: 7 August 2Ol2

3.14 Second, Country Road has outlined a large number of ’general risks’ that are excessively lengthy in light of ASIC’s policy.

3.15 Third, there is insufficient disclosure in relation to the ’specific’ risks associated with the Rights Issue, namely:

(a) the risk of the Acquisition not proceeding if specific conditions precedent to the Acquisition are not satisfied, in particular those which may be outside of Country Road’s control;

(b) the risk that proceeds from the Rights Issue may not be applied to fund the Acquisition in the event that the Acquisition does not proceed, in which case Country Road must disclose how such funds are intended to be applied; and

(c) the risk that Country Road shareholders will not approve the giving of securities by Witchery and its subsidiaries by special resolution at the next Country Road Annual General Meeting, and the implications of such on Country Road’s new banking facilities.

3.16 Fourth, there is insufficient disclosure in relation to the circumstances in which the $1.7 million break-fee may be payable. In particular, there is no information regarding whether those circumstances are within the control of Country Road or the vendor.

4 Continuous disclosure obligations

4.1 The various matters relating to the Rights Issue and Acquisition may amount to a breach by Country Road of its continuous disclosure obligations under section 674 of the Act and LR 3.1.

4.2 ARI has noted Country Road’s profit guidance for the 2012 financial year and is concerned with Country Road’s lack of timely disclosure. It is convenient that the profit guidance provided in the Offer Booklet has been calculated before removing "circa" $1.5 million in transaction costs in relation to the Acquisition. These additional costs, if taken into account, amount to a variation of between 10% - 15% when compared to Country Road profits for the 2011 financial year.

4.3 Please confirm when Country Road first became aware that its profit for the 2012 financial year would vary by between 10% - 15% from that of the 2011 financial year.

4.4 Please explain why Country Road did not disclose such matters to the market at that time.

4.5 Further, the Offer Booklet notes that Howard Goldberg will be leaving Country Road conditional and effective upon completion of the Acquisition. This is extremely material information. Please confirm when Mr. Goldberg first became aware that he would be leaving Country Road. If the Acquisition is not completed, when will Mr. Goldberg be leaving Country Road?

ABL/228471 4v5

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The Secretary Arnold Bloch Leibler Country Road Limited Page: 5

Date: 7 August 2012

5 Oppression of minority shareholders

5.1 Our client is concerned that the Rights Issue has been implemented by the majority directors of Country Road appointed to the board by WIA as part of a general strategy by WIA and Country Road to enable WIA to compulsorily acquire the minority shareholdings in Country Road.

5.2 ARI’s concerns are heightened by the fact that Country Road has stated that it will not likely declare a dividend for the 2012 financial year and vague references to additional covenants and restrictions. In other words, if ARI participates in the Rights issue it may receive no dividend in the future and if it does not then it may be that its shares in Country Road are compulsorily acquired.

5.3 Further, we note that while the Rights Issue is renounceable, in practice, it is unlikely that there will be a market to trade rights, particularly given that the major shareholder is prohibited from participating in any subscription shortfall.

6 Directors’ duties

The directors are under an obligation to act in good faith in the best interests of the company and not to improperly use their position and information to gain an advantage for their appointors and detriment to a class of Country Road shareholders.

7 Next steps

71 To address the above concerns, our client demands the following corrective disclosure be made to the market:

(a) a full extract of all conditions precedent under the transaction documents connected to the Acquisition;

(b) details surrounding which conditions precedent to the Acquisition are within the control of Country Road, WHL and/or WIA;

(c) the likelihood that any outstanding conditions precedent to the Acquisition will, or will not, be satisfied;

(d) Country Road’s intentions in relation to the proceeds received from the Rights Issue in the event that the Acquisition does not complete;

(e) the risks associated with participating in the Rights Issue given the conditionality of the Acquisition;

(f) details regarding the additional covenants and restrictions that Country Road will be subject to as a result of the new financing arrangement;

ABL/228471 4v5

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The Secretary

Arnold Bloch Leibler Country Road Limited

Page: 6 Date: 7 August 2012

(g) the circumstances in which the $1.7 million break-fee is payable by Country Road, including, whether those circumstances are within the control of Country Road or the vendor;

(h) a detailed breakdown in respect of Country Road’s estimate that Acquisition transaction costs will total $10 million; and

(i) whether Country Road has approached the ASX in relation to the application of LR 11.1 and, if the ASX has indicated that shareholder approval will be required, the process and timetable for seeking that approval.

7.2 Please confirm by no later than 5:00 pm on Thursday 9 August 2012 that Country Road will withhold dispatch of the Offer Booklet until supplementary and corrective disclosure in relation to the above issues is made to our client’s satisfaction.

7.3 If Country Road does not provide the above confirmation by 5:00 pm on Thursday 9 August 2012, then our client will seek a permanent injunction to prevent dispatch of the Offer Booklet, on the grounds that Country Road is in breach of sections of the Act, LR 3.1 and LR 11.1. Our client will also give consideration to seeking access to documents pursuant to s 247 A or pre-trial discovery in relation to the apprehended oppression.

7.4 A copy of this letter should be distributed to every director of Country Road.

Yors si ncerely

/~ I MWI-11-

Leon Zwier Partner

cc Simon Susman

Michelle Jablko, UBS

ABL/2284714v5

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