WOOLWORTHS HOLDINGS LIMITED
Country Road today announced that it expected to report a trading loss of
between A$3m and A$4m for the six months to end December 2001. This
compares to a profit before tax of some A$0.258m for the same period last
The loss comprises a broadly break even result for the first half in
Australasia (a turnaround from a loss of $1.1m for the same period last
year), and a trading loss of between A$3m and A$4m in the US (compared to a
profit of A$1.4m last year).
According to the Chairman of Country Road, Mac Drysdale, the company made
considerable improvements in the quality, design and value of its
merchandise. The current ranges reflect this and it is even more evident in
its future ranges. This has impacted sales in the following manner:
1. Within the retail business (excluding warehouse stores) it is anticipated
that sales to end December will be 2.5% up on the same period last year.
2. The forward orders from its wholesale customers for January to June next
year are 15% up on the previous year.
3. The warehouse business, which sells the company's marked down product,
has seen a 20% reduction in stock levels and a 20% reduction in sales.
Overall retail sales (firsts and warehouse) are 2% down on last year.
Country Road has made further progress in reducing expenses with
Australasian overhead costs for the half being 2% below the same period last
year, and some 7% lower than two years ago. The company will continue to
progress cost reduction within the business.
As stated in the announcement of 25 October 2001, the events of September 11
were significant in the short term. The market remains depressed and
volatile. Country Road has responded to the environment with commercially
appropriate discounting and merchandise offers.
Although the initial response to its promotional activity has been strong,
the company anticipates that sales for the half will be 9% down on last
Significant reductions in the overheads of the US operations have been made
but despite this the company anticipates a trading loss of between A$3m and
A$4m for the half.
It has previously been indicated that the company was undertaking a
strategic review of its US operations. That review is ongoing and it is
anticipated that Country Road will be able to advise the market of the
result in mid January.
Country Road has met all of the covenants agreed to with its principal
bankers since new financing facilities were established in August 2001. The
company has continued discussions with its principal bankers and has
agreement in principle to an extension of facilities for the next 12 months.
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CONTACT : Simon Susman : Chief executive officer - 083 252 5696
Cherrie Lowe : Head of Corporate Governance - + 27 21 407-3160
Date: 14/12/2001 10:31:00 AM Produced by the SENS Department