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Woolworths Holdings Limited - Statement On Country Road

Release Date: 14/12/2001 10:29
Code(s): WHL
Wrap Text
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 year.
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). Australasia
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. USA
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 year.
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. Financing Facilities
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. - END -
CONTACT : Simon Susman : Chief executive officer - 083 252 5696 Cherrie Lowe : Head of Corporate Governance - + 27 21 407-3160

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