Aussie Apparel Adds U.K. Licensee for Hot Tuna

Aussie Apparel Group Ltd. announced that on May 15 it signed an agreement with Revo (UK) Ltd. to be the exclusive licensee for the Company’s Hot Tuna brand in the United Kingdom and Ireland. The agreement with Revo calls for minimum sales of US$14.1 million (UK 8.7 million pounds) over the next five years based on exchange rate as of 5/15/03 of UK 1.00 pound per US$1.617.

This announcement comes one month after the company announced its first licensing agreement with Frontier International Holdings for Australia/New Zealand in a agreement that requires minimum sales of AUS$53.8 million over five years. Bruce MacGregor, President & CEO of Aussie Apparel Group said, “We will continue to pursue the licensing side on the international front. Not only does it build brand awareness for our various labels, it also has a very positive impact on both our cash flow and bottom line. The licensees fund the inventory and sales/marketing efforts, and any additional cost to support them beyond what we already spend on our domestic efforts is relatively insignificant.”

Added MacGregor, “We are very excited to have Revo as our UK licensee for our Hot Tuna brand. Revo has received tremendous interest from UK retailers as they seek old school surf brands such as Hot Tuna and there is evidence that the demand for extreme sports apparel, including surf-related clothing, is growing worldwide.”

Gregory McCarry, Managing Director at Revo said, ” We are extremely pleased to finalize this agreement with Aussie Apparel and we look forward to working with them in growing the Hot Tuna brand within the UK. The UK and European markets are constantly developing in respect to the global surf market and brands such as Hot Tuna enjoy tremendous brand awareness and support.”

Terms of the license agreement with Revo state that it is for a minimum of ten years, with an option to extend for an additional ten years. Both parties have agreed to minimum sales and royalties for the first five years. According to the agreement, minimum royalty payments to Aussie Apparel over the next five years will total US$846,500.