Sourcing and Supply Chain Management Solutions for the Consumer Product Industry

Chong Luen Hing Garments (CLH), Ltd – Hong Kong

Shunde Mao Nian Garments, Ltd - China

Shunde Chong Luen Hing Trading Co., Ltd – China

Chong Luen Hing Garments (CLH), Ltd – USA

Beverly Hills New York Hong Kong ChinaBeverly Hills New York Hong Kong China

The CLH GroupThe CLH Group

8383 Wilshire Blvd8383 Wilshire BlvdSuite 614Suite 614Beverly Hills, CA Beverly Hills, CA 9021190211323-782-9640323-782-9640

171 Madison Ave.171 Madison Ave.Suite 1201Suite 1201New York, NY 10016New York, NY 10016212-679-7803212-679-7803

Unit A, 3/F, Mackenny CentreUnit A, 3/F, Mackenny Centre660-662 Castle Peak Road660-662 Castle Peak RoadKowloon, Hong KongKowloon, Hong Kong011-852-2741-7338011-852-2741-7338

Xintang Industrial AreaXintang Industrial AreaLunjiao Shunde,Lunjiao Shunde,Guandong ChinaGuandong China0765-77202000765-7720200

The CLH Group

The CLH GroupThe CLH Group The CLH Group – An Overview The Apparel Industry and Its Challenges The CLH Group Concept The CLH Group Solution The CLH Group Customer Value Proposition The CLH Group Proof of Concept Conclusions….. Our Team

The CLH Group

We allow consumer product companies to outsource the coordination of all the individual supply chain elements that they now either do themselves or outsource one by one – sourcing, production monitoring, EDI, inbound logistics, customer allocations, etc. We assume control over product specific supply chains, domestic and international fulfillment and deliver significant economic advantages to our customers. We are currently provided warehousing and distribution services both in the United States and in China. Our warehousing and distribution facilities in China serve as a consolidation facility for merchandise targeted in the China market, as well as merchandise slated for the United States market. In addition, in China, we offer pick and pack services for the China market as well as merchandise for the United States Retail market.

Definitions:

Sourcing and Manufacturing: The functions involved in identifying and contracting with suppliers, factories, and other points of manufacture primarily in off-shore labor markets.

Supply Chain Management: The process of management needed to move finished goods from the point of manufacture to the sales floors of domestic retailers and wholesalers.

The CLH Group – An OverviewThe CLH Group – An Overview

The CLH Group

The CLH Group has been a market leader for over 25 Years, whose management has collectively over 200 years experience

Over 2,000 employees Capacity per month –1,000,000 pieces per month. Beginning in July 2003, our

capacity will double as we are in the process of completing our second stage of expansion, adding an additional 200,000 square feet of production space.

Fabric Specialty –

– Brushed Knits – textured, interlock, jersey, pointelle, jacquards, micro yarns, sherpas, fleece, ribs.

– Wovens – Flannels, light weight wovens, stretch wovens, textures, multiple printing processes, yarn-dyed.

Quality Control – 7 step Process According to WRAP Program – WRAP Certified factory. Lead times – Landed Door to Door – 60-90 days after all production details

are confirmed Member of the Customs Trade Partnership Against Terrorism (C-PAT)

Our Facilities in China:Our Facilities in China:Factory SpecificationsFactory Specifications

The CLH Group – An OverviewThe CLH Group – An Overview

China Corporate Offices and Manufacturing FacilitiesChina Corporate Offices and Manufacturing Facilities

The CLH Group – An OverviewThe CLH Group – An Overview

The CLH Group

China Corporate Offices and Manufacturing FacilitiesChina Corporate Offices and Manufacturing Facilities

Fabric Storage

Dormitory for EmployeesManufacturing Facility

Production Line

The CLH Group – An OverviewThe CLH Group – An Overview

The CLH Group

China Corporate Offices and Manufacturing China Corporate Offices and Manufacturing FacilitiesFacilities

Cafeteria – Accommodates 600 Employees Inspection Department

The CLH Group – An OverviewThe CLH Group – An Overview

The CLH Group

Ground Breaking Ceremony for New Facility –additional 150,000 square feet complete in July 2003 Success!

CLH Distribution Center for Jockey International

WRAP CertificateWRAP CertificateThe CLH Group – An OverviewThe CLH Group – An Overview

The CLH Group

•Supply Chain has become too complex for traditional management techniques

•Managers and staff are creative…not operational

•Seasonal business with a fixed overhead model

•Difficulty fully exploiting trends

•Profits based on creative sourcing and supply chain management

•Difficulty in accessing a full range of overseas factories and suppliers

•Resistance to change.

The Apparel Industry and Its ChallengesThe Apparel Industry and Its Challenges

The CLH Group

Global, Fragmented, Geographically Diverse, Inefficient 1999, Wholesale import value of apparel products into the U.S. - $127

billion Estimated cost of direct Supply Chain Management (SCM) costs - $80

billion Manufacturers are highly fragmented in size and specialty. Cultural characteristics mitigate against wide scale use of information

technologies. Every company has warehousing and permanent overhead tasked to

SCM and production. The supply chain is complex. Profit margins are low and getting lower because of supply chain costs

and dynamic competition. Retailers are becoming more dictatorial.

The Apparel Industry and Its ChallengesThe Apparel Industry and Its Challenges

The CLH Group

Allows companies to focus on their core competencies – design, sales and merchandising while we focus on product sourcing, and other supply chain management challengesOur Customers can outsource all or part of the supply chain processWe are not a technology company, but a company that uses technology. We use this technology to create a pipeline in the supply chain that is completely transparentConsumer Product Companies design but do not manufacture their productsAddresses the full suite of services consumer product companies can outsource to The CLH Group from sourcing to EDI to shipments to clients customers Unfortunately, in the process, they must worry about a myriad of

Supply Chain Issues:

Sourcing

Manufacturing

Quality Assurance

Pre-shipment packaging

Trans-shipment

Payment Guarantees

Insurance

•Containers

•Customs Entry

•Customs Documents

•Customs Exams

•Customs Advance

•Warehouse Handling In

•Warehouse Handling Out

•Warehouse Storage

•Unloading

•Sort & Segregate

•Labeling

•Financial Analysis

The CLH Group ConceptThe CLH Group Concept

The CLH Group

•There are no infrastructure constraints to exploiting market momentum.

•Specialization

•Reduction or elimination of fixed overhead

•Technology is Delivered…not Developed

•Re-emphasis on core competencies

•Real time status is transparent to our customer and their customer

•Supply Chain Simplicity

•Superior Quality of Product and Information

The CLH Group SolutionThe CLH Group Solution

The CLH Group

Change from a fixed cost to variable cost business model. Access to unattainable economies of scale. They save time, money, and personnel. Renewed focus on core competencies. Trade credit is simplified. Technology gains are delivered by CLH, rather than

developed from within. Simplification of process. Creative talent and marketing

innovation is unshackled. Market momentum can be fully exploited.

The CLH Group Customer Value PropositionThe CLH Group Customer Value Proposition

The CLH Group

The CLH Group team has delivered $300 million in product and SCM services over a six year period.The parent company of CLH USA, The CLH Group has consistently maintained a dominant manufacturing position in China for the last twenty-five years.

Our CustomersBranded and non-branded apparel companies Licensees: Licensees of Large Branded CompaniesSpecial Situations: Entertainment companies, Corporations

The CLH Group Proof of ConceptThe CLH Group Proof of Concept

The CLH Group

Supply chains are inefficient and must be better controlled. Principals are confused as to their solutions. Specialization isn’t a complete solution unless it adds to the

bottom line. The CLH Group offers relief from uncertainty and gives our

customers added control without investment in people or technology.

In shortIn short:: We provide an opportunity for our customers to focus on their core

competencies – design, merchandising and sales, while we do the non-revenue generating back office functions

What we stand for is:Product QualityOn time deliveryIntegrity – Both in our product and our business practices

Conclusions….Conclusions….

The CLH Group

Director and Chairman of the BoardDirector and Chairman of the Board

Mr. Wong has spent the last 30 years in multiple facets of the apparel industry. He owns and operates several factories in Southern China. He was a pioneer in the export business from mainland China, entering that market from Hong Kong over 20 years ago. He has extensive knowledge of managing exports from China and the challenges that come with it – Quota, Quality Control, Consistency and Integrity. Mr. Wong has consistently maintained the highest quality and ethical standards available to the apparel trade. Mr. Wong is currently the largest factory employer in the city of Shunde, China. Due to Mr. Wong’s vision and expertise, The CLH Group has maintained an industry leadership position for over 25 years. His aggressive, yet calculated approach to steady growth will lead The CLH Group to the top of its industry for the next 25 years.

Billy WongBilly Wong

Our Team

The CLH Group

Mr. Vorzimer has been in the Consumer Products market for 17 years, with detailed background in international apparel sourcing and production as well as experience in the financial services industry. Prior to involvement in the apparel industry John was a member of The Geometry Group where he specialized in equity trading, investment banking and analysis of venture capital opportunities.  A part owner John is responsible for all financial aspects of CLH USA business and oversees sourcing and manufacturing operations as well as Customer Relationship Management (CRM) in the United States. Before joining The CLH Group, John created an international sourcing company specializing in procurement, supply chain planning and integration. His worldwide sourcing network extends across 29 countries and over one hundred companies with whom John has developed close personal working relationships. He has extensive experience in developing global trade relationships. Since 1996, John has been responsible for placing over $300 million in consumer apparel products through his network of factories for many leaders in the apparel industry. John has a Bachelor of Arts degree in Economics from California State University, Northridge.

Director – US OperationsDirector – US Operations

John VorzimerJohn Vorzimer

Our Team

The CLH Group

Customer Resource Manager (CRM)Customer Resource Manager (CRM)

Laura brings over 25 years of systems management expertise. She is responsible for all Systems related issues – EDI, Data Integrity, Information Flow to Customers, etc. Laura’s department ensures our customers are fully informed every step of the supply chain process.

Laura Ramos

Design DirectorDesign Director

Marisa brings 25 years of design experience in multiple product categories. She provides our customers with a high degree of comfort due to her extensive technical design knowledge. Her attention to detail and understanding of product execution is invaluable to our clients. Marisa is charged with the responsibility of developing and training our design staff in China. This is a critical initiative as the industry begins to shift its design efforts overseas.

Marisa Fairstein

Our Team

The CLH Group

Customs and Logistics ManagerCustoms and Logistics Manager

Jocelyn Brings a tremendous amount of knowledge in the customs administration and logistics arena. She spent 10 years at one of the most well respected customs clearance firms in the country – Carmichael International Customs Brokers. Jocelyn’s department assures our customers that all import documentation is correct and there are no U.S. Customs delays.

Jocelyn Woo

Our Team

The CLH Group