FAQ

AREZZO&CO shares are traded in BM&FBovespa under the ticker “ARZZ3”. The Company has entered into an agreement with the BM&FBovespa to list its shares in the “Novo Mercado”, the highest level of the differentiated Corporate Governance practices. AREZZO&CO share price can be monitored on our Investors Relations website (http://www.arezzoco.com.br/EN/) and also on BM&FBovespa website (www.bovespa.com.br).

AREZZO&CO common shares provide its shareholders with the following rights:

• Each common share entitles its owner one vote in Arezzo&Co General and Special Shareholders’ Meetings;
• Right to receive dividends or other distributions made to shareholders in proportion to their participation in the total number of AREZZO&CO outstanding shares;
• In the event of the Company’s liquidation, its shareholders have the right to receive reimbursements proportional to their ownership interest in the Company’s capital share, after the settlement of all of its obligations
• Tag-along rights in case of shareholding control alienation. The major shareholder will be required to make a tender offer within 90 days of such acquisition for all of the remaining publicly traded shares at a price per common share equivalent to not less than the price paid per share by such person for the controlling stake. – All the other rights assured to the shares, in accordance with Novo Mercado listing rules, with the Company’s Bylaws and with Brazilian Corporate Laws (for more information, see section 1.4 below).

Corporate Governance is a set of practices aimed to optimize the performance of a company, protecting all the stakeholders, including investors, employees and creditors, facilitating access to capital. Corporate Governance practices applied to capital market involves transparency, equal shareholders treatment and accountability, contributing to the continuity of the Company.

Novo Mercado is a special segment of BM&FBovespa stock market, exclusively destined to companies which voluntarily undertake to abide by differentiated Corporate Governance practices. The following items sum the main points of Novo Mercado and are applicable to the Company:

• Issue voting shares only;
• Ensure that shares representing 25% of its total capital are effectively available for trading;
• Tag-along rights – ensure that the same conditions provided to controlling shareholders in the transfer of its company’s control are extended to all shareholders; adopt offering procedures that favor widespread ownership of shares whenever making a public offering..
• Board of Directors with at least five members, all of whom with a two-year term (reelection permitted). At least 20% of the Company’s board of directors must be independent members;
• Comply with minimum disclosure standards and improvements in the financial statements, including consolidated financial statements and limited audit revision translated to English.
• A schedule of corporate events must be disclosed until December 10th of each year;
• If the Company ever decide to delist from Novo Mercado, conduct a tender offer based on economic valuation criteria made by a specialized institution or company; and
• Accept the Bovespa arbitration panel for conflict resolution between investors, management and Novo Mercado companies.

Investors residing outside Brazil, including institutional investors, are authorized to acquire securities, including AREZZO&CO shares, at the Brazilian stock exchange, as long as they comply with the register requirements under Resolution nº 2,689 and CVM Instruction nº 325, of January 27, 2000, and amendments.

The investors registered under Resolution nº 2,689, except for certain circumstances, may carry out any type of transaction in the Brazilian capital market involving a security traded in the stock exchange, futures market or organized over-the-counter market. The investments in and remittances of, outside Brazil, earnings, dividends, profits or other payments related to AREZZO&CO shares are carried out through the foreign exchange market.

To become an investor registered under the provisions of Resolution nº 2,689, an investor residing outside Brazil shall:

• Appoint representative in Brazil, with powers to perform actions relating to its investment;
• Appoint an authorized custodian in Brazil for its investment under Resolution nº 2,689, which must be a financial institution duly authorized by the BACEN and CVM; and
• Through its representative, register as a non-Brazilian investor with the CVM and register the investment with the BACEN.

Securities and other financial assets held by non-Brazilian investors pursuant to CVM Resolution no 2,689 must be registered or maintained in deposit accounts or under the custody of an entity duly licensed by the BACEN or the CVM. In addition, securities trading are restricted to transactions carried out in the stock exchange or through organized over-the-counter markets licensed by the CVM.

Earnings may be paid-out in two ways: dividends or interest on equity capital.

Dividends consist of a cash distribution of the participation in the profits of a company (publicly traded company) to the shareholders. The value of the dividends received by shareholders is proportional to the quantity of shares in their possession and the profits obtained by the company during the previous fiscal year. According to Brazilian Corporate Law, shareholders are entitled to a minimum pay-out rate of 25% for each fiscal year if the balance of the accumulated profit / loss account is positive.

Interest on equity capital can be disbursed in lesser intervals than an annual basis and it doesn’t depend on Company’s performance in the year, but on the retained profit reserves of the previous years. As the shareholders’ equity disbursement reduces the income tax payment basis, the shareholders will be required to pay income tax and social contribution tax.

The Brazilian Corporate Law and the Company’s bylaws require AREZZO&CO to promote General Meeting in the fourth month following the end of the year in which shareholders will decide for the annual dividend payment. In accordance with Brazilian Corporate Law, dividends must be paid within 60 days following the date on which dividends has been declared, unless the shareholders resolution establishes another payment date which, in any event, must occur in the year when divided is declared.

AREZZO&CO shares are registered under Banco Itaú S.A., the custodian bank. It is important for shareholders to keep their registration data up to date on Banco Itaú, in order to guarantee their rights, receiving changes in equity position, dividend payment receipt as well as income tax reports. Dividend payment is made by Banco Itaú through a credit deposit in the shareholder’s bank account. If the shareholder does not have an account with Banco Itaú, the remuneration will be paid within approximately 2 days after the dividends payment. In case the investors has no bank account, the dividends will be available starting from the initial payment date, according to the Company’s decision, and the investor will have to look for a Itaú specialized agency. Identification documents are needed. Earnings will be available for a period of 3 (three) years as of the initial date of payment. After this term, dividends are reverted back to the Company. For more information: INVESTPHONE (ITAÚ S.A.) – (11) 5029-7780.

Click here to know about our Shareholder Remuneration Policy

On February 2nd, 2011, AREZZO&CO issued 26,470,589 common shares (primary of 10,294,118 and secondary of 16,176,471) raising R$ 502.9 million (primary of R$ 195.5 million and secondary of R$ 307.4 million) for a price of R$ 19.00 each share. After the offer, the controlling group had 53.6% of the company’s common shares. Currently, the company holds 110.186.077 shares and the controlling shareholders own 41.24%.

More info: Ownership Breakdown

All the material facts, earnings results and others Notice to the Market are disclosed simultaneously on CVM/BM&FBovespa and on AREZZO&CO’s Investor Relations website (http://www.arezzoco.com.br/EN/). The information can also be received by email, through registration on website.

The financial statements are published annually on the newspapers Diário Oficial de Minas Gerais (MG) and Jornal Hoje em Dia (MG). Quarterly financial statements, press releases, presentations, material facts and notices to shareholders are available in the investor relations website (http://www.arezzoco.com.br). Other information about the Company also may be obtained on BM&FBOVESPA’s website (www.bmfbovespa.com.br) and at the Securities and Exchange Commission of Brazil – CVM (www.cvm.gov.br).

AREZZO&CO

Av. Engenheiro Carlos Berrini, 105, 3rd floor

Itaim Bibi – São Paulo – SP – CEP: 04571-010

Telephone: (+55 11) 2132-4300

E-mail: ri@arezzoco.com.br

The AREZZO&CO platform currently features eleven key brands: AREZZO, SCHUTZ, ALEXANDRE BIRMAN, ANACAPRI, ALME, VANS, RESERVA, TROC, ZZ MALL, BAW AND CAROL BASSI. The products are distinguished by their constant innovation, design, comfort and excellent cost benefits.

AREZZO, the main brand. With a modern and eclectic positioning, the brand covers a wide target market, reaching women from 16 up to 60 years of age.

SCHUTZ, is bold and provocative, targeting younger public, wich variates between women aged 18 to 40 years.

ALEXANDRE BIRMAN develops products for an exclusive target market, bringing concepts of luxury, unique design and quality.

ANACAPRI offers a casual style, with comfortable, colorful products. It’s affordable products target clients from 20 to 60 years old.

ALME has a premise of refined design and comfort technologies. Alme develops all its products with raw materials with less environmental impact and maximum comfort for the feet.

VANS®, since 1966 creates action-focused footwear, apparel and accessories for skateboarders, surfers, BMX riders and snowboarders across the world. A leading action sports brand, continues its rise to become the world’s largest youth culture brand.

The AR&CO group combines the brands Reserva, the main brand, Reserva Mini, Oficina, Reserva Ink, Reserva Go, Reversa and Simples.

TROC, acquired by Arezzo&Co in November 2020, is specialized in quality second-hand pieces from premium and luxury fashion brands.

ZZ MALL is the first 100% digital platform of Arezzo&Co. The marketplace sells all brands of the group as well as greatest premium brands in the fashion and beauty market.

BAW, a DNVB (digitally native vertical brand) with a 100% digital and D2C (direct to consumer), is one of the most well-known streetwear brands in Brazil and is positioned to democratize fashion and create trends with attitude, authenticity and irreverence.

CAROL BASSI was founded in 2014 by Anna Carolina Bassi, a businesswoman who grew up around fashion. The stylist then created her own label, which unites her DNA, her spirit, her joy of living and her personal style.

AREZZO&CO has an experienced Research & Development team that focuses on trend anticipation and adjustment to customer needs while taking into consideration each product cost structure. They travel, participate in the main international fairs, perform in loco research, as well as magazine and fashion trend website studies. The R&D team develops, together with Arezzo&Co’s sample factory, about 1,500 pairs of shoes for each collection, 500 of which are launched in the showroom, and about 430 models are finally ordered to be produced. A key point of the Company is the development of 7 to 9 collections per year, minimizing the collection risk, while improving customers’ loyalty and attracting new ones, since the Company maintains its stores constantly renewed, with innovative products and up to date with the most recent fashion concepts.

The production process is flexible, combining outsourcing and in-house manufacturing, mainly at Vale dos Sinos region, in Rio Grande do Sul. The advantages involved in this process are characterized by three variables: i) Expertise/focus: some factories are 100% focused on one specific type of shoe, eg: boot. Such production structure will always have cost advantage when compared to a non-specialized factory. On the other hand, dedicated-plants have two challenges: i) require large amount of production per model and ii) have limited flexibility to adjust to new fashion trends or weather (summer – boots versus winter – open sandals). ii) Volume: Most of the developed models have a restricted number of produced pairs, especially some Schutz brand SKU’s which have very limited edition. Thus, non-specialized factories as our owned factory can become more efficient for limited editions. iii) Capacity Utilization: The Brazilian cluster produces twelve months a year, serving customers in all Brazilian states and also several countries in southern and northern hemispheres. Arezzo&Co collection cycle requires large volumes in September and October, for example, and almost no production in December and January. Therefore, dilution of fixed costs of an outsourced factory is in most of the cases more efficient than a 100% vertically integrated company.

The distribution of the products is made through five main channels: owned stores, franchises, multibrand stores, web commerce and export. AREZZO&CO’s main distribution channel is franchising, which advantage is the low capital requirements and capillarity. Multibrand points of sale, in turn, provide access to several cities where investment in the opening of monobrand stores would not be resonable. The owned stores give visibility and reinforce the brand’s identity, besides being important marketing tools. Internationally, the brand products are also sold in franchises, multibrand stores, e-commerce, department stores, and in our two flagship stores in the United States.