Deckers Outdoor (DECK)

Retail Stores Overview

Since spring 2008, we have opened five new concept stores: San Francisco, New York City, Beijing, and two in London; and we opened our sixth retail outlet store in New Jersey.  As of March 31, 2009, we have a total of 13 retail stores worldwide.  Continuing to build on the success of our existing UGG Australia stores, in 2009, we plan to open two additional domestic stores, the first being our seventh retail outlet to be located in the Desert Hills Premium Outlets in Cabazon, California.  Internationally, our stores in the UK and China were successful in their first holiday season.  For 2009, we plan to continue to expand by opening five new stores: one in Japan, one in China, and three in the UK.  In early May 2009, we took over the Japan store from our Japanese distributor and reopened it as a company-owned store.

In July 2008, we entered into a joint venture agreement with an affiliate of Stella International Holdings Limited, or Stella International, for the opening of retail stores and wholesale distribution for the UGG brand in China.  Under this agreement, we opened our first UGG Australia concept store in Beijing in December 2008.  The joint venture is owned 51% by Deckers and 49% by Stella International.

Our retail stores enable us to directly impact our customers’ experience, meet the growing demand for these products, sell the products at retail prices and provide us with incremental annual operating income.   In addition, our UGG Australia concept stores allow us to showcase our entire line, whereas a retailer may not carry the whole line.

Retail Stores Overview

        Based upon the success of our existing UGG Australia concept stores in Chicago and the SoHo area of New York City, we opened our first West Coast UGG Australia concept store in August 2008 in San Francisco near Union Square. In November 2008, we opened our second New York City UGG Australia concept store near Lincoln Square as well as our sixth retail outlet store in New Jersey.

        During 2008, we opened our first Company-owned stores internationally. In the United Kingdom, we opened two UGG Australia concept stores, the first in the new Westfield Mall in White City in October and the second in Covent Garden in London in November.

        In July 2008, we entered into a joint venture agreement with an affiliate of Stella International Holdings Limited ("Stella International") for the opening of retail stores and wholesale distribution for the UGG brand in China. Under this agreement, we opened our first UGG Australia concept store in Beijing in December. The joint venture is owned 51% by Deckers and 49% by Stella International. The total initial investment in the joint venture was $1,000 contributed by both parties in proportion to their respective ownership in the joint venture. The estimated total investment by Deckers and Stella International, including contributed capital and loans, for the joint venture is expected to be approximately $5,000.

        Our retail stores enable us to directly impact our customers' experience, meet the growing demand for these products, sell the products at retail prices and provide us with incremental annual operating income. In addition, our UGG Australia concept stores allow us to showcase our entire line, where a retailer may not carry the whole line. Net sales of the retail store business increased 109.2% in the year ended December 31, 2008, compared to the same period in 2007. We do not expect this growth rate to continue

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because as we increase the number of our stores, each new store will have less proportional impact on our growth rate. For those stores that were open during the full year of 2007 and 2008, same store sales grew by 32.7%. Nevertheless, we cannot assure investors that retail store sales will continue to grow at their recent pace or that revenue from our retail store business will not at some point decline.

Retail Stores Overview

        Based upon the success of our existing UGG Australia concept stores in Chicago and the SoHo area of New York City, we opened our first West Coast UGG Australia concept store in August 2008 in San Francisco near Union Square. In November 2008, we opened our second New York City UGG Australia concept store near Lincoln Square as well as our sixth retail outlet store in New Jersey.

        During 2008, we opened our first Company-owned stores internationally. In the United Kingdom, we opened two UGG Australia concept stores, the first in the new Westfield Mall in White City in October and the second in Covent Garden in London in November.

        In July 2008, we entered into a joint venture agreement with an affiliate of Stella International Holdings Limited ("Stella International") for the opening of retail stores and wholesale distribution for the UGG brand in China. Under this agreement, we opened our first UGG Australia concept store in Beijing in December. The joint venture is owned 51% by Deckers and 49% by Stella International. The total initial investment in the joint venture was $1,000 contributed by both parties in proportion to their respective ownership in the joint venture. The estimated total investment by Deckers and Stella International, including contributed capital and loans, for the joint venture is expected to be approximately $5,000.

        Our retail stores enable us to directly impact our customers' experience, meet the growing demand for these products, sell the products at retail prices and provide us with incremental annual operating income. In addition, our UGG Australia concept stores allow us to showcase our entire line, where a retailer may not carry the whole line. Net sales of the retail store business increased 109.2% in the year ended December 31, 2008, compared to the same period in 2007. We do not expect this growth rate to continue

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because as we increase the number of our stores, each new store will have less proportional impact on our growth rate. For those stores that were open during the full year of 2007 and 2008, same store sales grew by 32.7%. Nevertheless, we cannot assure investors that retail store sales will continue to grow at their recent pace or that revenue from our retail store business will not at some point decline.

Retail Stores Overview

        Based upon the success of our existing UGG Australia concept stores in Chicago and the SoHo area of New York City, we opened our first
West Coast UGG Australia concept store in August 2008 in San Francisco near Union Square. In November 2008, we opened our second New York City UGG Australia concept store near Lincoln Square as well
as our sixth retail outlet store in New Jersey.

        During
2008, we opened our first Company-owned stores internationally. In the United Kingdom, we opened two UGG Australia concept stores, the first in the new Westfield Mall in White
City in October and the second in Covent Garden in London in November.

        In
July 2008, we entered into a joint venture agreement with an affiliate of Stella International Holdings Limited ("Stella International") for the opening of retail stores and wholesale
distribution for
the UGG brand in China. Under this agreement, we opened our first UGG Australia concept store in Beijing in December. The joint venture is owned 51% by Deckers and 49% by Stella International. The
total initial investment in the joint venture was $1,000 contributed by both parties in proportion to their respective ownership in the joint venture. The estimated total investment by Deckers and
Stella International, including contributed capital and loans, for the joint venture is expected to be approximately $5,000.

        Our
retail stores enable us to directly impact our customers' experience, meet the growing demand for these products, sell the products at retail prices and provide us with incremental
annual operating income. In addition, our UGG Australia concept stores allow us to showcase our entire line, where a retailer may not carry the whole line. Net sales of the retail store business
increased 109.2% in the year ended December 31, 2008, compared to the same period in 2007. We do not expect this growth rate to continue

42

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because
as we increase the number of our stores, each new store will have less proportional impact on our growth rate. For those stores that were open during the full year of 2007 and 2008, same store
sales grew by 32.7%. Nevertheless, we cannot assure investors that retail store sales will continue to grow at their recent pace or that revenue from our retail store business will not at some point
decline.

Retail Stores Overview

        Based upon the success of our existing UGG Australia concept stores in Chicago and the SoHo area of New York City, we opened our first
West Coast UGG Australia concept store in August 2008 in San Francisco near Union Square. In November 2008, we opened our second New York City UGG Australia concept store near Lincoln Square as well
as our sixth retail outlet store in New Jersey.

        During
2008, we opened our first Company-owned stores internationally. In the United Kingdom, we opened two UGG Australia concept stores, the first in the new Westfield Mall in White
City in October and the second in Covent Garden in London in November.

        In
July 2008, we entered into a joint venture agreement with an affiliate of Stella International Holdings Limited ("Stella International") for the opening of retail stores and wholesale
distribution for
the UGG brand in China. Under this agreement, we opened our first UGG Australia concept store in Beijing in December. The joint venture is owned 51% by Deckers and 49% by Stella International. The
total initial investment in the joint venture was $1,000 contributed by both parties in proportion to their respective ownership in the joint venture. The estimated total investment by Deckers and
Stella International, including contributed capital and loans, for the joint venture is expected to be approximately $5,000.

        Our
retail stores enable us to directly impact our customers' experience, meet the growing demand for these products, sell the products at retail prices and provide us with incremental
annual operating income. In addition, our UGG Australia concept stores allow us to showcase our entire line, where a retailer may not carry the whole line. Net sales of the retail store business
increased 109.2% in the year ended December 31, 2008, compared to the same period in 2007. We do not expect this growth rate to continue

42

HREF="#bg42801a_main_toc">Table of Contents

because
as we increase the number of our stores, each new store will have less proportional impact on our growth rate. For those stores that were open during the full year of 2007 and 2008, same store
sales grew by 32.7%. Nevertheless, we cannot assure investors that retail store sales will continue to grow at their recent pace or that revenue from our retail store business will not at some point
decline.

Retail Stores Overview

Based upon the success of our existing concept stores in Chicago and the SoHo area of New York City, we opened our first west coast UGG brand concept store in August 2008 in San Francisco near Union Square. We plan to open our second New York City UGG brand concept store near Lincoln Square as well as our sixth retail outlet store in New Jersey in November 2008. In the United Kingdom, we plan to open two Deckers’ owned UGG brand stores in London in the fourth quarter of 2008.

In July 2008, we entered into a joint venture agreement with an affiliate of Stella International Holdings Limited for the opening of retail stores and wholesale distribution for the UGG brand in China. Initial plans call for the opening of one new store in Beijing, China in 2008. The joint venture is owned 51% by Deckers and 49% by Stella International. The total initial investment in the joint venture is $1,000 contributed by both parties in proportion to their respective ownership in the joint venture. The estimated total investment by Deckers and Stella International, including contributed capital and loans, for the joint venture is expected to be approximately $5,000.

Our retail stores enable us to directly impact our customers’ experience, meet the growing demand for these products, sell the products at retail prices and provide us with incremental annual operating income. Net sales of our retail store business increased 145.4%, 143.2% and 92.3% in the first, second, and third quarters of 2008, respectively, compared to the same periods in 2007. For

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Retail Stores Overview

Based upon the success of our existing concept stores in Chicago and the SoHo area of New York City, we plan to open two additional UGG brand concept stores in 2008.  Our first west coast UGG brand concept store is expected to open in August in San Francisco near Union Square and our second New York City UGG brand concept store is expected to open near Lincoln Square in October.  In addition, we intend to open our sixth retail outlet store in New Jersey in November. In the United Kingdom, we plan to open two Deckers’ owned UGG brand stores in London in the fourth quarter of 2008.

In July 2008, we entered into a joint venture agreement with an affiliate of Stella International Holdings Limited for the opening of retail stores and wholesale distribution for the UGG brand in China.  Initial plans call for the opening of one to two stores in 2008. The joint venture is owned 51% by Deckers and 49% by Stella International. The total initial investment in the joint venture is $1,000

16

Retail Stores Overview

In 2007, we opened our fifth retail outlet store, in Woodbury, New York, to add to our existing retail outlet stores in Ventura, California; Camarillo, California; Wrentham, Massachusetts and Riverhead, New York.  In 2007, we also opened our second UGG brand concept store in Chicago, Illinois, to add to our existing concept store in New York, New York.  Based on the success of the existing stores, we plan to open two additional UGG brand concept stores in 2008, one in San Francisco, California and another in New York City.  We also plan to open an outlet store in New Jersey by the end of 2008.

Our Teva and Simple China distributor plans to open two stand-alone Teva stores during the second quarter of fiscal 2008 as well as additional shop-in-shops later in the year.  In April 2008, our Taiwanese distributor opened the first ever Simple stand-alone store for the brand in Taipei.  In the United Kingdom, we plan to open at least one and potentially two UGG brand stores in London later in 2008.

Our retail stores enable us to directly impact our customers’ experience, meet the growing demand for these products, sell the products at retail prices and provide us with incremental operating income. Net sales of the retail store business increased 145.4% in the first quarter of 2008, compared to the same period in 2007.  For those stores that were open during the first quarter of last year, same store sales grew by 46.1% when compared to the same period last year. We do not expect these growth rates to continue because as we increase the number of our stores, each new store is likely to have a reduced impact on our growth rate.

Retail Stores Overview

        In 2007 we opened our fifth retail outlet store, in Woodbury, New York, to add to our existing retail outlet stores in Ventura, California; Camarillo, California; Wrentham, Massachusetts and Riverhead, New York. In 2007, we also opened our second UGG brand concept store in Chicago, Illinois, to add to our existing concept store in New York, New York. Based on the success of the existing stores, we currently plan to open one additional outlet store and two additional UGG brand concept stores in major metropolitan areas by the end of 2008.

        Our retail stores enable us to directly impact our customers' experience, meet the growing demand for these products, to sell the products at retail prices and to provide us with incremental operating income. From the time we opened our first retail store through the end of 2007, we have had significant revenue growth, much of which occurred as we opened new stores and the UGG brand gained popularity. Net sales of the retail store business increased 163.3% in the year ended December 31, 2007, compared to the same period in 2006. We do not expect this growth rate to continue because as we increase the number of our stores, each new store will have less proportional impact on our growth rate.

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Retail Stores Overview

        In 2007 we opened our fifth retail outlet store, in Woodbury, New York, to add to our existing retail outlet stores in Ventura, California; Camarillo, California;
Wrentham, Massachusetts and Riverhead, New York. In 2007, we also opened our second UGG brand concept store in Chicago, Illinois, to add to our existing concept store in New York, New York. Based on
the success of the existing stores, we currently plan to open one additional outlet store and two additional UGG brand concept stores in major metropolitan areas by the end of 2008.

        Our
retail stores enable us to directly impact our customers' experience, meet the growing demand for these products, to sell the products at retail prices and to provide us with
incremental operating income. From the time we opened our first retail store through the end of 2007, we have had significant revenue growth, much of which occurred as we opened new stores and the UGG
brand gained popularity. Net sales of the retail store business increased 163.3% in the year ended December 31, 2007, compared to the same period in 2006. We do not expect this growth rate to
continue because as we increase the number of our stores, each new store will have less proportional impact on our growth rate.

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