Truworths International Limited - Business update Truworths International Limited (Incorporated in the Republic of South Africa) (Registration number 1944/017491/06) JSE Code: TRUNSX Code: TRW ISIN: ZAE000028296 BUSINESS UPDATE Truworths International Limited (`the Group") announces that sale of merchandise for the 19 weeks to 5 November 2006 increased to R 1 597 million, 27% above the corresponding period in 2005. This amount includes the non-comparable merchandise sales attributable to the Group"s newly acquired controlling interest in the Uzzi menswear chain. Uzzi is trading above expectation, and the integration of systems and administrative structures is progressing well. If merchandise sales of Uzzi were to be excluded, Group sale of merchandise would reflect an increase of 25% above that of the prior period. Group comparable store retail sales grew by 17% and product inflation was 1%. Identity sales increased by 49% to R156 million with comparable store sales growth of 22%. The Group opened five Identity stores, three Truworths stores and a YDE store, relocated three stores and renovated and extended nine stores during the period. A further six new Identity, seven new Truworths, two new YDE stores and three store refurbishments are planned for the 2007 financial period. The Group is expecting to increase overall trading space by 11% and to spend R 119 million on store development during this period. By June 2007, it is expected that the Group will operate ninety seven Identity stores. While continuing to apply strict criteria for credit granting, the Group, has managed to achieve solid growth in new customer accounts and in the active account base. The quality of the debtors" book remains high and compares well with sector benchmarks, notwithstanding marginally deteriorating delinquency and net bad debt. These indicators are in line with management expectations and have been adequately provided for. The tightening of monetary policy in response to rising inflation and higher levels of consumer debt may soften consumer sentiment in the retail environment. However with the further expansion of trading space, market share gains and the continued emphasis on the fashionability of merchandise, management is confident that trading for the festive season and the remainder of the 2007 financial period will yield positive growth. The Group is proud of its support for and relationship with the local clothing manufacturing industry and its association with the Cape Clothing Cluster, which aims at enabling local manufacturers to become internationally competitive. The board estimates that locally produced units delivered to the Group will have increased by approximately 15% for the 26 week period to December 2006 relative to the prior corresponding period. This increase is due to the current positive trading levels, combined with the benefits arising from the proximity of local suppliers which enables them to respond rapidly to the Group"s needs for fashion merchandise on a timeous basis. The board expresses its reservations about the quota system applicable to clothing and textile imports from China scheduled to be introduced with effect from 1 January 2007. The board believes that the negative impact on clothing prices and other unintended consequences have not been adequately considered prior to the promulgation of these measures. The Group is pleased to be one of the four foundation members of the newly formed National Clothing Retail Association of South Africa (NCRF) which it believes will play a key role in facilitating the contribution to South Africa of the clothing retail sector. The interim results of the Group for the 26 week period to 24 December 2006 are scheduled for release on or about 22 February 2007. 9 November 2006 Cape Town Lead Sponsor: Barnard Jacobs Mellet Corporate Finance (Pty) Ltd Joint Sponsor: Standard Bank Date: 09/11/2006 04:19:07 PM Supplied by www.sharenet.co.za Produced by the JSE SENS Department