Sterling/Joneve

Although Sterling and Joneve are distinct brands, they employ similar location and merchandising strategies. Sterling and Joneve stores are designed and decorated to appeal to the fashion-conscious consumer seeking the latest styles and hottest trends, with Joneve stores focusing less on the junior fashion market. With aesthetically pleasing merchandising and full-service sales, Sterling and Joneve stores offer a friendly, inviting and fashion oriented consumer experience.

Sterling and Joneve stores are primarily located in major malls and on high streets and average approximately 1,000 square feet in size. Having these two distinct brands has allowed us to expand our presence and market penetration in major malls and other high-density retail locations where there is strong demand for both mid-range and mid-high range fashion-oriented women's footwear products. In three shopping malls, we have both a Sterling and Joneve store. Sterling and Joneve are generally in the top quartile of sales per square foot for shoe stores in shopping mall locations. For example, in 2004 Sterling had the highest sales per square foot among the shoe stores in West Edmonton Mall. With 22 shoe stores, West Edmonton Mall has the largest number of shoe stores of any mall in Canada.

Together, the Sterling and Joneve banners have grown from 28 stores in 2000 to 34 as at April 30, 2005 across British Columbia, Alberta and Manitoba. While we have become constrained in our ability to expand the number of Sterling and Joneve stores in western Canada due to lack of suitable additional locations in shopping malls and on high streets, we intend to open multiple new Sterling and Joneve stores as part of our planned expansion into eastern Canada. We opened our first Sterling store in eastern Canada at Upper Canada Mall in Newmarket, Ontario in May, 2005, and we expect to open a Sterling store in Toronto in August, 2005.

Shoe Warehouse

To appeal to value-conscious family customers, Shoe Warehouse stores are organized on a standardized concept to create a spacious, bright, clean, functional and easy shopping experience. Inventory is stored directly under merchandise displays, minimizing the need for a stockroom and significantly increasing retail floor space. Shoe Warehouse focuses on customer service, product mix and location while delivering products at a value price point.

Shoe Warehouses are generally located in strip malls and average 3,000 to 4,000 square feet in size, with some of the newer stores opening in enclosed malls and averaging 2,000 to 3,000 square feet in size. The Shoe Warehouse concept has been successful in high-density urban retail locations as well as suburban and small town retail settings.

The availability of suitable store locations has made Shoe Warehouse our fastest-growing chain, based on number of locations, having grown from 35 stores in 2000 to 58 as at April 30, 2005 across the four western provinces. Since January 1, 2005 we have opened four Shoe Warehouse stores and management believes that there is a market for approximately 20 additional Shoe Warehouse stores in western Canada and up to 100 stores in eastern Canada. We opened our first Shoe Warehouse in eastern Canada at Dixie Outlet Mall in Mississauga, Ontario in May, 2005

Freedman's

Freedman's stores are designed and organized to create an easy shopping experience for the high-end footwear consumer. Merchandise is arranged according to gender, style and brand, with separate areas for comfort, orthopedic and branded fashion shoes in a wide variety of sizes and widths. With its over 70-year history in Vancouver, Freedman's has a loyal customer base and an established reputation for providing a friendly shopping experience with knowledgeable full-service sales staff.

Freedman's stores are approximately 2,000 to 2,500 square feet in size and are located primarily on high streets. As at April 30, 2005, there were five Freedman's stores in the greater Vancouver and Victoria market in British Columbia, with plans to open additional stores in major urban centres in western Canada.