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PD to expand HOTJ jewelry catalogs & web portals biz

14
Dec '07

House of Taylor Jewelry Inc and PD Financial Corp ("PD"), which operates under the trade name PeachDirect, announced that the two companies have signed a Letter of Intent (LOI) to establish exclusive consumer jewelry catalogs and web portals for branded jewelry created by HOTJ.

The parties expect to establish a jointly owned marketing entity that will focus on this growing segment of the jewelry business.

The direct marketing entity will serve all of HOTJ's consumer segments and will cover a wide range of exclusive product categories under the House of Taylor Jewelry and Kathy Ireland Jewelry brands.

As proposed, PD will be responsible for marketing as well as the design and development of the entity's catalogs and websites, while HOTJ will oversee design, development, manufacturing and sourcing of all diamonds and jewelry to be marketed under the brands.

Under the LOI, HOTJ will issue a three-year warrant to PD to purchase 5 million shares of HOTJ's stock at $1.00 if the warrant is exercised during its first year, $1.50 if it is exercised during the second year and $2.00 if it is exercised during its third year.

Jack Abramov, president and chief executive officer of House of Taylor Jewelry, commented, "This agreement with PD Financial is a significant, exciting milestone in broadening our brand strategy and expanding our distribution through an exclusive direct marketing channel for our jewelry.

While the independent retail channel will remain our primary focus, we believe the catalogs and web portals will create new global opportunities to expand our consumer product selection and drive traffic to the independent retail stores carrying HOTJ's branded jewelry.

We expect this new marketing entity will allow us to generate new revenue streams by accessing PD's customers and leveraging its database mining capabilities and credit financing solutions.

Together, we are committed to setting very aggressive financial targets because of the consumer metrics that both companies believe exist for these catalogs and web portals. We believe that the direct marketing channel will become a significant driver of our revenue growth, while enhancing shareholder value."

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