Free Record Shop Tunes High-Fidelity Retail Operations with SAP

May 30, 2006

Dutch Multi-Channel Entertainment Retailer to Roll out SAP for Retail for 90 Percent of Its Employees to Drive Efficiency, Adaptability and Real-Time Processes Across the Enterprise

PARIS - SAP AG (NYSE: SAP) today announced that Free Record Shop, a Dutch entertainment products retailer with nearly 400 stores in five European countries, is empowering 90 percent of its more than 2,000 employees with retail industry-specific software from SAP. Following a steady surge of organic growth, the company is gearing up for further expansion and business model innovation with the SAP for Retail solution portfolio to enable real-time transactions across purchasing, sales, finance and logistics. With the aim of enhancing its agility and responsiveness, the company is rolling out SAP software to replace legacy systems that have reached their functional limits in keeping pace with the fast-moving consumer goods market. The announcement was made at SAPPHIRE® ’06, SAP’s international customer conference, being held in Paris, France, May 30 – June 1.

What started in the early 1970s as a two-meter by nine-meter shop in Holland has grown into an international multi-channel retailer boasting a total annual revenue of approximately EUR 400 million and specializing in retail and online sales of entertainment products such as movies, music, games and books. While growing organically and evolving with the dramatic shifts in purchasing, logistics and consumer buying habits in the retail and entertainment sectors, Free Record Shop’s existing software environment did not provide sufficient functionality to accommodate further changes cost-effectively. The cost of software maintenance and customization simply outweighed the potential business benefit.

Recognizing that the retail market of tomorrow is already advancing rapidly today, the company needed an IT and business platform that allows real-time transactions, puts integrated processes at employees’ fingertips and helps manage the increasing complexity of changing corporate structures.

“We needed to integrate purchasing, logistics, sales and financial processes to boost employee efficiency and enable the real-time business transactions and market insight that more and more define who has the edge in the retail and entertainment sectors,” said Marvin Kuivenhoven, project manager, Free Record Shop Holding. “We chose SAP for its retail industry expertise and the maturity and comprehensive functionality of its industry solution, which meets our requirements with a minimum of customization. With its strong product development and deep industry functionality, SAP has shown a strong commitment to the retail sector, and we view SAP as a trusted partner and best-suited strategic advisor to help support our future growth strategy.”

The company’s most important consideration in choosing SAP for Retail was the need to ensure a seamless integration of its logistics center into its business processes, improving the alignment between sales and replenishment forecasting and helping ensure timely delivery of fast-moving products to the shops and via online channels. After conducting a thorough review of the offerings of major software vendors, Free Record Shop found SAP for Retail to offer the superior functionality and adaptability.

“For 30 years, Free Record Shop has been at the forefront of innovation as an early adopter of multi-channel retailing, successfully competing in a market that sees constant change,” said Rick Chavie, senior vice president of Industry Solution Management, Trading, SAP. “While underlining SAP’s commitment to the retail industry, Free Record Shop’s choice for SAP stands as a yet another confirmation of our strategy of achieving organic growth by providing customer and industry-driven solutions that meet today’s business demands and plot a secure and innovative road map for tomorrow’s best-run companies.”

About Free Record Shop
Free Record Shop Holding, headquartered in the Netherlands, is a privately held company distributing and selling home entertainment products including audio and video carriers, computer software and games, telecom products and services, books and magazines. The company operates 338 retail outlets, which are visited by 40 million customers annually. Free Record Shop B.V. is the largest company within the Free Record Shop Holding and the market leader in the Netherlands with over 185 shops, working under the brands Free Record Shop and Bravo. The mission of the organization is the multi-channel distribution of entertainment products (music, movies, games, books, tickets, etc.) through shops and through the Internet (bricks & clicks). The company’s website at http://www.freerecordshop.nl/ and its new ways of digital distribution play an important role in the success of the Free Record Shop formula.

For more information, press only:
Charles Paape, CFO, Free Record Shop BV, +31 10 2844777, +31 6 51391626, cpaape@frs.nl

For customers:
http://www.freerecordshop.nl/ http://www.freedigital.nl/

About SAP for Retail®
SAP for Retail® is a solution portfolio that combines mySAP™ Business Suite solutions with a broad set of integrated retail applications to help companies profitably serve consumer demand across multiple channels. With the acquisitions of Triversity and Khimetrics, SAP’s end-to-end solution now includes enhanced point of sale (POS) and demand intelligence capabilities. Today, more than 3,200 retailers worldwide are SAP customers, more than 470 of which are using merchandising-specific applications from the SAP for Retail solution portfolio. Built on the open architecture of the SAP NetWeaver® platform, SAP for Retail includes core capabilities for financial management, human resources, supplier relationship management and customer relationship management, as well as support for industry-specific merchandise management and planning, store and channel management, demand forecasting, replenishment, sophisticated allocation, workforce management, POS data management and RFID. (Additional information at http://www.sap.com/retail/)

About SAP
SAP is the world’s leading provider of business software*. Today, more than 33,200 customers in more than 120 countries run SAP® applications—from distinct solutions addressing the needs of small and midsize enterprises to suite offerings for global organizations. Powered by the SAP NetWeaver® platform to drive innovation and enable business change, SAP software helps enterprises of all sizes around the world improve customer relationships, enhance partner collaboration and create efficiencies across their supply chains and business operations. SAP solution portfolios support the unique business processes of more than 25 industries, including high tech, retail, financial services, healthcare and the public sector. With subsidiaries in more than 50 countries, the company is listed on several exchanges, including the Frankfurt stock exchange and NYSE under the symbol “SAP.” (Additional information at http://www.sap.com/)

(*) SAP defines business software as comprising enterprise resource planning and related applications such as supply chain management, customer relationship management, product life-cycle management and supplier relationship management.

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Copyright © 2006 SAP AG. All rights reserved.
SAP, R/3, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serve informational purposes only. National product specifications may vary.

For customers interested in learning more about SAP products:
Global Customer Center: +49 180 534-34-24
United States Only: 1 (800) 872-1SAP (1-800-872-1727)

For more information, press only:
Evan Welsh, +1 (610) 661-1949, evan.welsh@sap.com, EDT
SAP Press Office, +49 (6227) 7-46315, CET; +1 (610) 661-3200, EDT; press@sap.com
Morgan Mauritz, Burson-Marsteller, +1 (415) 591-4131, morgan.mauritz@bm.com, PDT
Saskia Stolper, Burson-Marsteller, +49 69 238 09-43, saskia_stolper@de.bm.com, CET
Charles Paape, CFO, Free Record Shop BV, +31 10 2844777, +31 6 51391626, cpaape@frs.nl, CET

During SAPPHIRE (from May 30 to June 1), to speak with press contacts on site, please dial the SAP press room at +49 6227 7-74067.

Contact Information

Evan Welsh

SAP

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