Bell

Bell Sport, Inc.
Specialty Retail Western Office
160 Knowles Drive
Los Gatos, CA 95030
(408) 370-1010-Voice
(800) 776-5677-Voice
(408) 370-7542-FAX

June 5, 1995

BELL SPORTS ANNOUNCES $8 MILLION TELEVISION ADVERTISING AND MARKETING CAMPAIGN TO PROMOTE BELL BRAND

Dear Valued Dealer,

Bell is pleased to announce that it will be spending over $8 million in the coming fiscal year on the most aggressive helmet marketing campaign ever seen. The campaign will include television advertising -a first for the helmet industry.

By promoting Bell on a national basis we will raise consumer awareness for premium quality branded helmets. as market leader, we believe it is our responsibility to grow the helmet category profitability. Failure to act now will certanly lead to helmets being regarded, like water bottles, as commodity items.

To achieve this goal, Specialty dealers will have exclusive access to the most exciting helmet line-up ever seen in Bell's 40 year history. The new Bell Pro Series line will only be available to Specialty dealers and will include state-of-the-art model adn feature advances. This new 13 model line-up targets youth, adult and enthusiast riders with price points from $30 to $300. In order to provide and other Bell Sports manufactured bicycle helmets at our best prices!

A seperate and distinct line of non-Pro Series Bell branded helmets will be marketed through Mass retailers. These helmets will primarily focus on the infant, child and youth market segments. These segments account for approximately 80% of all helmet sales in Mass retailers. Currently up to 60% of all helmets sold in this channel retail under $20. The non-Pro Series Bell branded helmets will have unprecedented suggested retail price points of $30 and above. Bell Sports will continue to market its BSI brand of helmets.

The $8 million marketing campaign will speak to all potential helmet consumers but with an enthusiast rider bias. Goodby, Silverstein and Partners, Bell's new advertising agency, has created some of the most innovative television and print advertising ever seen - hardly a superise from the agency that recently won the prestigious Agency of the Year awars! The television campaign will run on major networks as wll as on cable television networks such as MTV and ESPN.

Advertising will begin in the fall of 1995 and run through 1996. In addition to television advertising, Specialty dealers will also see a blitz of print advertising in bike and general interest magazines, including dealer listings.

Actions speak louder than words. We are therefore prepared to make a written commitment to the Specialty dealer.

- Bell will reserve its new line of youth, adult and enthusiast Pro Series helmets ($30 to $300) exclusively for Specialty dealers.
- Bell will spend a minimum of $8 MILLION promoting the Bell brand.
- Bell will offer any Bell Sports manufactured helmets to Specialty dealers at our best prices.
- Bell will offer helmet discount incentives to Specialty dealers who grow their annual business by 20%.
- Bell will offer additional dating incentives to helmet program dealers.

In mid-July we will outline the details of these and other profit generating programs. At the same time, we will present the new 1996 Bell Pro Series product line and complete marketing campaign.

We look forward to your support promoting the Bell Pro Series product line, educating consumers about helmet usage, and growing the helmet category profitability. In turn, we commit to driving consumers into your Specialty stores.

Thank you for your continued support. Do not hesitate to call us or your local representative with any questions.

Sincerely,

Mark Williams Jay Romasco
Senior Vice President & General Manager Vice President of Sales
Specialty Retail Division Specialty Retail Division

QUESTIONS & ANSWERS

What are the current pricing trends in the Specialty retail channel?
In the Specialty channel, average retail helmet prices have plummeted from the approximately $41 in 1991 to an estimated $28 in 1996. In the total helmet market-place this picture is far worse. In 1991, the total average retail selling price was approximately $30, in 1996, the average retail price is expected to be $15.
(Source BMRI, Management estimates)

What has prompted Bell to market the Bell brand across all trade channels?
Bell, as a market leader, has decided to take the leadership role in growing the helmet category profitability. Failure to act now will lead to the demise of this product segment and to helmets being regarded, like water bottles, as commodity items. By promoting the brand on a national scale we will raise consumer awareness of premium quality branded helmets and create significant added-value for the Bell helmet product line and the helmet market general.

How are you going to differentiate the Specialty helmet product line?
Specialty helmet dealers will have exclusive access to the most exciting helmet line-up ever seen in Bell's 40 year history. The new Bell Pro Series line which includes state-of-the-art model and feature advances will be availabel only to Specialty dealers. The ner line-up has 13 models targeted at youth, adults and enthusiasts, with price points from $30 to $300. In order to provide maximum choice, Specialty dealers can purchase any other Bell Sports manufactured bicycle helmets at our best prices.

A seperate and distinct line of non-Pro Series Bell branded helmets will be marketed through Mass retailers. These helmets will primarily be focused on the infant, child and youth market segments. These segments account for approximately 80% of all helmet sales in Mass retailers. Currently up to 60% of helmets sold in the Mass channel retail under $20. Bell branded non-Pro Series helmets will have unprecedented suggested retail price points of $30 and above.

How will the $8 million marketing campaign directly impact the Specialty dealer?
The $8 million marketing campaign will speak to all potential helmet consumers but with an enthusiast rider bias. The cornerstone of the campaign is national television advertising - a first for the helmet industry. Goodby, Silverstein and Partners, Bell's new advertising agency, has created some of the most innovative television and print advertising seen in the bike industry. Goodbu recently won the prestigioud Agency of the Year award.

The television commercials will run on major networks as well as on cable networks such as MTV and ESPN. In addition to television advertising, Specialty dealers will see major print advertising in bike and general intersest magazines promoting the exclusive dealer listings program. Advertising will begin in the fall of 1995 and run through 1996.

How will Bell ensure that this multi-channel strategy will build my Specialty business?
We are prepared to make a written commitment to the Specialty dealer.

- Bell will reserve its new 13 model product line of youth, adult and enthusiast Pro Series helmets ($30 to $300) exclusively for Specialty dealers.
- Bell will spend a minimum of $8 million promoting the Bell brand.
- Bell will offer the Specialty dealer any bell Sports manufactured helmet at our best prices.
- Bell will offer helmet discount incentives to Specialty dealers who grow their annual business by just 20%.
- Bell will offer additional dating incentives to helmet program dealers.
(Full details of these and other profit generating programs available July 17,1995.)

Do you plan to market Blackburn, VistaLite, and Rhode Gear accessory brands within this multi-channel stretegy?
No. Blackburn, VistaLite and Rhode Gear will continue to be marketed exclusively as Specialty brands and sold exclusively in the Specialty channel. These premium accessory brands in no way face the same dramatic market conditions as helmets.

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