Financial News

GLOBAL OFFER OF BURBERRY - ANNOUNCEMENT OF PRICE RANGE

24 JUNE 2002

(Not for distribution in the United States, Canada, Australia or Japan)

GUS plc (GUS) confirms today its intention to seek a listing for shares in Burberry Group plc (Burberry) on the London Stock Exchange by way of a global offer to institutions.

Highlights

• Indicative price range of 230p to 290p per share, valuing the equity of Burberry at �1.15bn to �1.45bn.

• Free float of up to 25% of issued share capital.

• Net proceeds of �282m at the mid-point of the price range.

• Conditional dealings expected to commence on 12 July 2002.

• Burberry has strong business momentum with multiple growth opportunities by product, channel and region.

• Double-digit revenue growth in retail stores in the first 11 weeks of the current financial year. As previously announced, Wholesale order book for the Autumn/Winter 2002 season broadly unchanged compared to the prior year.

Rose Marie Bravo, Chief Executive of Burberry, commented:

�Burberry is a distinctive luxury brand with international recognition and broad appeal. We have a rich heritage and uniquely British image. Burberry has strong business momentum with multiple growth opportunities. We look forward to sharing our success with a wider group of investors.�

Enquiries

This announcement does not constitute an invitation to underwrite, subscribe for or otherwise acquire or dispose of any GUS plc or Burberry Group plc shares. Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.

These materials are not for distribution in the United States, Canada, Australia or Japan. They are not an offer of securities for sale in the United States, Canada, Australia or Japan.

Shares in Burberry Group plc are not being registered under the US Securities Act of 1933 and have not and will not be offered or sold in the United States absent registration or an exemption from registration. No public offering of securities is being made in the United States.

Merrill Lynch International and Morgan Stanley & Co. International Limited are the Joint Sponsors and Merrill Lynch International and Morgan Stanley Securities Limited are the Joint Global Co-ordinators and Joint Bookrunners for the Global Offer. Each of Merrill Lynch International, Morgan Stanley & Co. International Limited and Morgan Stanley Securities Limited are advising Burberry Group plc and GUS plc in relation to the Global Offer and no one else and will not be responsible to anyone other than Burberry Group plc or GUS plc for providing the protections afforded to their respective clients, nor for providing any advice in relation to the Global Offer, the contents of this document or any transaction or arrangement referred to herein.

Certain statements made in this announcement are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results, performance or achievements to differ materially from any expected future results, performance or achievements in forward looking statements. Factors that might cause forward looking statements to differ materially from actual results, performance or achievements include, among other things, transactional and economic factors, and specifically our ability to generate revenues from our recent and planned acquisitions. Neither GUS plc nor Burberry Group plc assume any responsibility to update any of the forward looking statements contained herein.

Burberry
Burberry is a distinctive luxury brand with international recognition and broad appeal. The company designs, sources, manufactures and distributes high-quality apparel and accessories. Founded in Basingstoke, England, in 1856, Burberry has a unique heritage associated with Great Britain and positions itself as the authentic British lifestyle brand.

Since the arrival of a new management team commencing in 1997, it has been repositioning the Burberry brand in line with its luxury heritage. The brand was positioned to broaden its appeal to new customers whilst aiming to retain its traditional clientele, building on widely recognised icons, such as the signature trench coat, trademark check and Prorsum Equestrian Knight.

Burberry�s competitive strengths and attributes are as follows:

• distinctive luxury brand with international recognition and broad appeal;
  
• unique history and positioning as the authentic British lifestyle brand;
  
• highly successful merchandising and marketing strategy across both apparel and accessories;
  
• diversified distribution channels and geographic profile;
  
• proven international management team; and
  
• strong business momentum with multiple growth opportunities by product, channel and region.

Burberry�s strategy for continued growth is to:

• nurture and evolve the Burberry brand;
  
• promote the Burberry brand and image;
  
• continue to develop and expand its product portfolio,
  
• expand its directly operated store network;
  
• selectively build wholesale distribution;
  
• support growth in Japan; and
  
• enhance operational capabilities.

In the year to March 2002, sales were �499m and EBITA was �90.3m, an increase of 17% and 31% respectively over the prior year.

Current trading and prospects
Burberry�s retail operations have enjoyed double-digit revenue growth in the first 11 weeks of the current financial year, excluding the benefit of the Asian acquisitions completed in January 2002. Continued progress is anticipated over the full year, resulting from growth in existing stores, the directly operated store opening programme and the impact of the Asian acquisitions as well as the Korean transaction, which is expected to be completed on 1 July 2002.

As previously announced, Burberry anticipates that its wholesale order book for the Autumn/Winter 2002 season will be broadly unchanged compared to the prior year. This expectation primarily reflects the effect of the current difficult macro-economic environment on the luxury goods sector, and soft domestic demand in Spain together with discussions between Burberry and its key trading partner regarding the repositioning of Burberry�s business in Spain. These factors have been offset by continued strong growth in the United States.

Japanese licence income in the current financial year should benefit from further increases in volume and royalty rates, although this will be largely offset by the depreciation of the Yen/Pound Sterling exchange rate. Other licence income will be reduced as a result of the Asian acquisitions and by the termination or absorption into Burberry�s wholesale operation of certain product licences.

Burberry anticipates that its operating margin in the current financial year will be broadly stable.

Board structure
The Board of Directors of Burberry is:

Use of proceeds
The expected net proceeds of the Global Offer will be used by Burberry to repay inter-company borrowings from GUS, leaving Burberry with a net cash balance of approximately �10m. GUS will use the proceeds from Burberry to repay short-term bank borrowings.

Structure of the Offer
The key Global Offer statistics are as below:

Timetable for the Offer
The expected timetable of principal events, subject to market conditions, is as below:

Each of the times and dates in the above timetable is subject to change without further notice.

Advisors to the Offer
Joint Sponsors, Global Co-ordinators and Bookrunners to the Offer are Merrill Lynch International and Morgan Stanley & Co. International Limited. Co-lead managers are Cazenove and UBS Warburg.

Board of Directors � biographies

John Peace � Non-Executive Chairman
John Peace was appointed Non-Executive Chairman of Burberry on 7 June 2002. Mr Peace was appointed to the board of GUS plc in 1997 and became Group Chief Executive in January 2000. He served as Chief Executive of Experian from 1996 to 2000 and currently serves as Chairman of the Board of Governors of Nottingham Trent University.

Rose Marie Bravo � Chief Executive
Rose Marie Bravo was appointed Chief Executive of Burberry in 1997. Prior to her appointment at Burberry, Ms Bravo served as President of Saks Fifth Avenue from 1992 to 1997, with responsibility for merchandising, marketing and product development. She also served as a member of the board of Saks Holding Inc. From 1974 to 1992, Ms Bravo held positions of increasing responsibility at RH Macy & Co, culminating with her 1987 to 1992 tenure as Chairman and Chief Executive Officer of the I. Magnin Specialty Division. Ms Bravo serves on the board of Tiffany & Co.

Michael Metcalf � Chief Financial Officer and Chief Operating Officer
Michael Metcalf was appointed Chief Financial Officer and Chief Operating Officer of Burberry in 1998. Prior to this appointment, he held the position of Chief Executive Officer of Thorn plc from 1996 to 1998. He previously served as Finance Director of Thorn EMI Home Electronics Division, Deputy Finance Director and Group Finance Director of Thorn EMI plc and Chief Executive Officer of Thorn EMI Rentals Division, between 1985 and 1996. He is a qualified chartered accountant.

Thomas O'Neill � President Worldwide
Thomas O'Neill was appointed President Worldwide of Burberry in November 2001. Prior to this, he had served as President and Chief Executive Officer of LVMH's Jewellery Division based in Paris since August 2000. He served as President and Chief Executive Officer of LVMH Fashion Group, Americas. From June 1997 to August 2000 and as Chief Executive Officer of Marc Jacobs International from June 1997 to February 2001. From 1984 to 1992, he held various positions at Tiffany & Co, ultimately serving as Executive Vice President, International Division, from February 1990 to May 1992.

Philip Bowman � Non-Executive Director
Philip Bowman was appointed Non-Executive Director of Burberry in June 2002. Mr Bowman was appointed Chief Executive of Allied Domecq in 1999 and between 1998 and 2000 he served as chairman of Liberty plc. He also serves as a director of British Sky Broadcasting Group plc.

Guy Peyrelongue � Non-Executive Director
Guy Peyrelongue was appointed Non-Executive Director of Burberry in June 2002. Between 1987 and 2001 he served as President and Chief Executive Officer at L�Oreal United States. From 1973 to 1987 he held various positions at L�Oreal including President, Latin America.

David Tyler � Non-Executive Director
David Tyler was appointed Non-Executive Director of Burberry on 7 June 2002, having been a director since late 1997. He is currently Group Finance Director of GUS plc, a position he has held since 1997. He served as Group Finance Director of Christie's International plc from 1989 to 1996.