2002/01/18
WOOLWORTHS HOLDINGS LIMITED - STATEMENT ON COUNTRY ROAD [JSE Securities Exchange - SENS]
 
Country Road today announced that it has completed a strategic review of its
US operation and after considering all options, has decided to exit the US
market.
Country Road has operated in the US since 1988.  Whilst it has had some
successful periods, it proved difficult to sustain a profitable operation in
such a tough and volatile market.  Over recent months trading conditions in
the US have been exacerbated by the recession and worsening economic
picture, and the loss of consumer confidence after the events of September
11.
Country Road's US business will be placed in the hands of a trustee from
today.  Full entitlements will be paid to all US employees and we thank them
for their contribution and co-operation during this difficult time.  The
closure of the US business will result in an approximate A$21.8million one-
off exceptional charge, together with a charge of A$1.5million relating to
severance and restructuring costs incurred prior to closure.  This equates
to a charge on consolidation in Woolworths Holdings Limited of approximately
R104million and R7million, respectively, after minority interests and
foreign currency translation adjustments.  The R104million will have no
effect on headline earnings.
The closure of the US operation will allow Country Road to focus on
countries with similar climates and in particular their core Australian
markets and franchise. Only one range will be produced allowing significant
cost savings but importantly ensuring greater focus on the design and
delivery of that range. The move will ensure that Country Road is better
placed to return to profitability.
Future international expansion will be under a new business model of
franchising.  In addition to the recent franchise agreement for the Gulf
States, new agreements are being considered in a number of countries in
markets with climates similar to their own. Country Road will maintain
control of the brand and work with franchisees that meet its strict
retailing requirements.
As stated in the announcement of 14 December 2001, Country Road expected to
report a trading loss, attributed to the US operation, of between A$3million
and A$4million for the six months ended December 2001.  That expectation
remains and no revision is necessary.  The company is cautiously optimistic
about the remainder of the financial year and has already experienced
increased wholesale orders for the men's and women's ranges for 2002.
"The Board of Woolworths strongly endorses Country Road's decision to exit
the US market.   We are confident that the strategic decision to focus on
the Australasian business and to produce a single range will result in
significant cost benefits and improved ranges.  We continue to believe
management are taking the necessary steps in ensuring the business returns
to sustained profitability.",  said Simon Susman, the Chief executive
officer of Woolworths Holdings Limited.
END
Contact : Simon Susman  :  Chief Executive Officer  -  083 252 5696
          Norman Thomson  :  Acting Financial Director  -  083 251 6354
          Cherrie Lowe  :  Head of Corporate Governance  -  +27 21 407-3160
Date: 18/01/2002 08:30:00 AM Produced by the JSE SENS Department
Source: JSE Securities Exchange - SENS
 
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