24 October 2001
At the end of Woolworths Holdings' last financial year (2000/2001) it was
announced that its Australian subsidiary, Country Road, made a loss of R31,5
million as a result of amongst other things the depressed retail trading
conditions in Australia and the USA.
The impact of the events of September 11 on the USA operations was
significant in the short term and the business has experienced a highly
volatile environment since then.
Country Road management is currently reviewing the USA operations from a
strategic perspective and considering how to best move forward.
The market in Australia was also impacted by the events of September 11.
Although some stability is returning to the market, it is likely to remain
difficult in the short term.
Since the announcement of the Woolworths (2000/2001) annual results in
August, the Directors of Woolworths have been working closely with the
management of Country Road. Mr Simon Susman, CEO of Woolworths, said: "We
have been developing strategies and plans to capitalise on the synergies
between the two companies. We are aware of the challenges and opportunities
Country Road is facing and support the necessary action they are taking to
ensure the business is restored to profitability."
According to the Chairman of Country Road, Mac Drysdale, the company has
been focusing on cost reduction across all its operations and will continue
to do so. Substantial gains have been made in this area, and the
restructuring at Country Road last year has left the company well placed in
this financial year. Overhead costs for this financial year will be around
the same level as two years ago and below last year.
He further said: "Our forward ranges (from January to June 2002), have
already been sold to our wholesale customers and we have experienced a
strong reaction with sales being significantly up on last year and above our
"With respect to our retail trading in Australia, we anticipate the second
half will remain difficult and we expect conditions to remain extremely
volatile in the USA", Drysdale concluded.
Contact: Simon Susman, CEO, on 083 252 5696 or
Cherrie Lowe, Head of Corporate Governance, on 083 308 2933
Date: 25/10/2001 08:12:00 AM Produced by the SENS Department