For the interest of all our customers and the general public, the following letter gives a comprehensive look at how we make our products. We hope it provides you with a far more complete perspective on Roots and how we do business. We welcome your comments.

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Toronto, Summer 2009

Dear Roots Customer,

Global outsourcing is unquestionably a highly complex issue. To help you better understand this subject as it relates to Roots, we would like to share with you aspects about our company, our products and how we make them. This information relates to who we are, how we do business, the core values that guide us and our concern for the communities in which we operate.

Based on the principles and leadership of our two Co-Founders Michael Budman and Don Green, Roots has always been committed to highly ethical standards — whether it be in our stores, our offices, our own production facilities in Canada or with our suppliers, both domestic and foreign, of raw materials and finished goods. We take pride in who we are and what we do, from our product design to our customer service to our charitable contributions and sponsorships of cultural and sports-related groups and events. We also take pride in our success and take very seriously the social responsibility that goes with it.

In all aspects of our manufacturing process, we require that working conditions meet our stringent health, safety and labour standards. We insist that the rights, dignity and well-being of all workers making Roots products be respected. Roots suppliers, whether in Canada or abroad, operate according to the Roots Workplace Code of Conduct. It sets forth the high standards Roots will accept in compliance with industry guidelines and environmental requirements.

We are constantly examining everything we do and looking to see how we can do even better. This helps explain why Roots is still so successful today, 36 years since it was founded in Toronto. This also applies to our outsourcing program.

Over the years, we have made our Code of Conduct more stringent, more explicit, adding amendments to it that we feel ensure even higher standards. You are welcome to consult it on our website.

The Roots Workplace Code of Conduct is aimed at ensuring that our suppliers uphold the standards of ethical business practice consistent with the core values of Roots and our own demands for just, fair practices. The Code is the result of consultation with experts in the field and is based on our concern for the health, safety and dignity of those who make Roots products.

To ensure that suppliers meet our standards, they must commit themselves to our Code of Conduct before we will work with them. To ensure compliance, a third-party organization conducts a thorough audit of our suppliers. This is not a casual process as itís conducted by an independent, internationally recognized organization devoted to monitoring labour and safety conditions worldwide.

Through both announced and unannounced visits, the auditors inspect the workplace conditions where products are made. If a factory is found to be in violation of any of the provisions in our Code, we work with the factory to remedy the situation and conduct follow-up visits to monitor improvements.

We also provide training for all our production and sourcing staff to ensure that our own employees understand and comply with Roots standards and guidelines. When looking at our manufacturing and supplier systems, we must always balance four factors: Quality, compliance, price and delivery. Together, they are vital to our success.

The names of the suppliers with whom we contract are confidential proprietary information of Roots. Given the highly competitive nature of this industry and the risk of counterfeit products, we, like most other companies including our many competitors, do not publish the names and addresses of the factories we work with. We also do this out of respect for the privacy of these facilities. In the case of our own exemplary, state-of-the-art factory in Toronto, we have often hosted journalists, school groups and NGO members there. Thatís how proud we are of the conditions we maintain in our own factory.

For the longest while, we made most Roots products in Canada but in recent years we have shifted some of our manufacturing abroad as a result of technical, economic and capacity challenges.

In early 2004, with great reluctance and much disappointment, we closed one of our own manufacturing facilities in Toronto where we made much of the Roots apparel line. For seven years, we tried to compete with offshore manufacturing companies. Unfortunately, it proved a largely unprofitable and unrealistic exercise.

The sad reality today is that there are increasingly fewer suitable suppliers in Canada, and certain products can no longer be made in Canada. Itís a shame that free trade, globalization and the saturation of the Canadian market by major US and European companies manufacturing overseas have made this situation worse. The result: the technical capacity no longer exists in Canada to make certain categories of merchandise.

As much as itís possible and feasible, we still strive to make many Roots products in Canada, reflecting our commitment to our Canadian heritage. Itís a major part of what Roots is all about and what we are as a company and what our customers appreciate. In our stores and in our actions, we have always tried to showcase and celebrate Canada, which is a major inspiration behind Roots. We are proud of the strong link between Roots and Canada and are thankful for the support Canadians have long demonstrated for Roots.

We are proud of the international acclaim and recognition that Roots, as a Toronto-based Canadian company, has attracted to Canada.

Roots still directly employs nearly 2,000 people in Canada, including more than 200 at our leather goods factory in Toronto. Canadian designers design all Roots products in Toronto. Indirectly, through our work with various suppliers, we help contribute to the employment of thousands more people in Canada.

Roots constantly tries to stay informed about all its activities. In the past, we have met with representatives of Oxfam and the Maquila Solidarity Network who operate on behalf of factory workers around the world. We wanted to take what we learned from such meetings to lend insight and perspective as we continually endeavour to upgrade our processes.

Itís not by chance that Roots has always had such a progressive reputation. People who have long been familiar with our company know of the core values of integrity and quality that have governed Roots since its inception. On a practical level, it translates into protecting the rights and dignity of all those involved in the making of Roots products and ensuring that anything sporting the Roots name on it is made in decent, humane and professional conditions.

No brand can guarantee that every factory complies with every regulation every day of the year. But we can guarantee the firm commitment and vigilance of the Roots Co-Founders and senior team to uphold these standards. Itís an on-going process that demands diligence, patience and understanding of local cultures, customs and laws. As such, Roots is actively involved in several programs that help us find solutions that benefit everyone.

Roots is dedicated to our obligations and responsibilities and we will do whatever it takes to continue to provide the highest quality products in a manner consistent with our companyís principles and our customersí high expectations of Roots. This commitment is central and of paramount importance to our staff, our customers and the public at large. We never lose sight of this.

You may also be interested in knowing that over the years Roots has responded positively to literally hundreds of requests for charitable support. Itís part of our commitment to community support and social responsibility. Check the Who We Support section on our website for a comprehensive list of the organizations and causes we have supported in recent years.

Since Roots began, many of our products and styles have changed, but some things have not. These include the core principles that have guided Roots since its inception. They are based on a genuine respect and appreciation of people Ė those we work with and those who shop in our stores. But this sense of respect and appreciation extends much further. It also applies to how we make our products and to the communities where we do business. These values are as valid today as they were back in 1973. Perhaps even more so.

I hope this letter provides you with a better, more informed understanding of what Roots is all about and how we do business. Please feel free to write me with your comments.

Yours truly,

ROBERT SARNER
Director of Communication and Public Affairs
rsarner@roots.com

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