TRUWORTHS PROFIT WARNING

TRUWORTHS INTERNATIONAL LIMITED
(REGISTRATION NUMBER 05/17491/06)
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
("IT" OR "THE COMPANY")
PROFIT WARNING

IT'S INTERIM RESULTS FOR THE 26 WEEKS TO 31 DECEMBER 1998 STATED THAT

"MANAGEMENT IS CONFIDENT THAT REAL GROWTH IN EARNINGS AND PROFITS WILL CONTINUE
TO THE END OF THE FINANCIAL YEAR". IT WAS FURTHER NOTED THAT "SPORTSGIRL IS
EXPECTED TO IMPROVE PERFORMANCE OVER THE REMAINING SIX MONTHS". SPORTSGIRL IS
THE COMPANY'S AUSTRALIAN SUBSIDIARY AND THE SMALLER ASSOCIATE OF THE SOUTH
AFRICAN BASED TRUWORTHS.

FORECASTS PROVIDED TO TI AND TO THE BOARD OF SPORTSGIRL HAVE, UNTIL RECENTLY,
SUGGESTED THAT SPORTSGIRL WOULD GENERATE A MODEST PROFIT FOR THE YEAR BEFORE
INTEREST AND TAX, NOTWITHSTANDING VERY POOR SALES DURING THE WINTER SEASON DUE
TO MERCHANDISING PROBLEMS. HOWEVER, THE SPORTSGIRL EXECUTIVE TEAM HAS WITHIN
THE LAST FEW DAYS REPORTED TO TI MANAGEMENT A NUMBER OF FINANCIAL DIFFERENCES,
WHICH ARE CURRENTLY IN THE PROCESS OF BEING EVALUATED.

AS A CONSEQUENCE, SPORTSGIRL IS LIKELY TO MAKE A MATERIAL LOSS FOR THE
FINANCIAL YEAR ENDED 30 JUNE 1999, CONTRARY TO EARLIER EXPECTATIONS.

TRUWORTHS, THE GROUP'S CORE BUSINESS, NEVERTHELESS EXPECTS TO DELIVER RESULTS
IN LINE WITH POSITIVE EXPECTATIONS, DESPITE THE MOST DIFFICULT TRADING
CONDITIONS EXPERIENCED FOR MANY YEARS AND A DIFFICULT WINTER SEASON.

HOWEVER, AS A RESULT OF THE SPORTSGIRL PERFORMANCE, TI, THE HOLDING COMPANY, IS
LIKELY TO SHOW A REDUCTION IN PROFITS FOR THE YEAR.

THE MANAGEMENT OF TI ANTICIPATES THAT THE SIGNIFICANT CHANGES IMPLEMENTED
WITHIN SPORTSGIRL OVER THE PAST TWO MONTHS AND PLANNED FOR FORTHCOMING MONTHS
WILL MAKE A MEANINGFUL DIFFERENCE TO ITS PERFORMANCE DURING THE FINANCIAL YEAR
TO JUNE 2000. FURTHER DETAILS WILL BE ANNOUNCED WITH THE RELEASE OF THE
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 1999 ON 19 AUGUST 1999 AND LATER
WHEN THE ANNUAL FINANCIAL STATEMENTS ARE ISSUED.
CAPE TOWN
12 JULY 1999
NEWS RELEASE BY TRUWORTHS INTERNATIONAL

IN SPITE OF AN EXPECTED STALWART PERFORMANCE FROM ITS SOUTH AFRICAN CORE
OPERATION, TRUWORTHS INTERNATIONAL THE FASHION RETAILER ANNOUNCED TODAY THAT A
LOSS FROM ITS AUSTRALIAN OPERATION, SPORTSGIRL, IS LIKELY TO REDUCE ITS PROFITS
FOR THE FINANCIAL YEAR ENDING JUNE 1999 TO BELOW THAT OF LAST YEAR.

TRUWORTHS INTERNATIONAL CHIEF EXECUTIVE MICHAEL MARK SAID DESPITE THE MOST
DIFFICULT TRADING CONDITIONS EXPERIENCED IN MANY YEARS, AND A DIFFICULT WINTER
SEASON FOR MOST FASHION RETAILERS, THE SOUTH AFRICAN BASED TRUWORTHS WOULD
DELIVER POSITIVE RESULTS IN LINE WITH ITS STATUS AS A HIGHLY RATED FASHION
RETAILER. HOWEVER, CONTRARY TO EARLIER EXPECTATIONS, SPORTSGIRL WILL MAKE A
MATERIAL LOSS FOR THE YEAR.

WHEN ANNOUNCING TRUWORTHS INTERNATIONAL'S INTERIM RESULTS FOR THE SIX MONTHS
ENDED DECEMBER 1998, THE GROUP HAD PREDICTED THAT A "REAL GROWTH IN EARNINGS
AND PROFITS WILL CONTINUE TO THE END OF THE FINANCIAL YEAR". AS PART OF THIS
PREDICTION IT HAD EXPECTED SPORTSGIRL TO "IMPROVE PERFORMANCE OVER THE
REMAINING SIX MONTHS", PRIMARILY AS A RESULT OF ITS ENTRY INTO A LARGE NUMBER
OF MYER DEPARTMENT STORES. HOWEVER, DESPITE THE LAUNCH INTO MYER STORES,
SPORTSGIRL'S WINTER SALES WERE EXTREMELY DISAPPOINTING DUE TO MERCHANDISING
PROBLEMS.

FORECASTS FOR THE YEAR PROVIDED TO TRUWORTHS INTERNATIONAL AND TO THE

SPORTSGIRL BOARD HAD BEEN REASONABLE UNTIL RECENTLY, APPEARING ADEQUATELY TO
TAKE INTO ACCOUNT THE DECLINE IN SALES. LAST WEEK HOWEVER THE SPORTSGIRL
EXECUTIVE TEAM REPORTED A NUMBER OF SIGNIFICANT FINANCIAL DIFFERENCES.
MR MARK SAID DUE TO THE SIGNIFICANT CHANGES IMPLEMENTED OVER THE PAST TWO
MONTHS AND PLANNED IN FORTHCOMING MONTHS, THE MANAGEMENT OF TRUWORTHS

INTERNATIONAL ANTICIPATES A MEANINGFUL IMPROVEMENT IN THE SPORTSGIRL RESULTS
DURING THE 1999/2000 FINANCIAL YEAR. A TEAM OF TRUWORTHS EXECUTIVES IS
CURRENTLY IN AUSTRALIA TO CONTINUE TO ASSESS AND IMPROVE THE SITUATION.
RECENTLY THERE HAVE BEEN SIGNIFICANT CHANGES IN THE SPORTSGIRL MANAGEMENT TEAM,
WHICH IS STILL IN THE PROCESS OF BEING STRENGTHENED.
SOME OF THE RECENT CHANGES INTRODUCED ARE:
* NEW KEY EXECUTIVE APPOINTMENTS

* SIGNIFICANT CHANGES TO THE BUYING AND MARKETING TEAMS

* EXTENSION OF THE PRODUCT RANGE TO INCORPORATE APPROPRIATE ELEMENTS OF THE
TRUWORTHS RANGE FROM NOVEMBER THIS YEAR.

* A SIGNIFICANT REDESIGN OF THE SUMMER RANGE BY THE NEW BUYING TEAM PRIMARILY
AFFECTING STOCK FROM LATE SEPTEMBER ONWARDS.

* COMPLETE ASSIMILATION (WHICH WILL TAKE A FEW MONTHS TO COMPLETE) OF TRUWORTHS
SYSTEMS AND PROCEDURES WHICH WERE PRESENT IN SPORTSGIRL BUT NOT IMPLEMENTED TO
TRUWORTHS STANDARDS.

FURTHER DETAILS WILL BE ANNOUNCED WITH THE RELEASE OF PRELIMINARY RESULTS ON
AUGUST 19 AND LATER WHEN THE ANNUAL FINANCIAL STATEMENTS ARE ISSUED.
ENDS