Woolworths

From 08/09/04

(Updates with more detail, background on store refits)
LONDON (AFX) - Woolworths Group PLC pared first-half losses as it cut costs
and grew sales via a series of store revamps, and said it is well placed to
deliver a strong performance over the key Christmas period.
The UK variety retailer, which traditionally loses money in the first six
months of its financial year, said pretax losses, before exceptional items and
goodwill, fell to 32.9 mln stg in the six months to July 31, from 34.9 mln the
year earlier.
Analysts had expected a 34.2 mln stg loss.
Group sales rose 5.9 pct to 1.11 bln stg, while the company hiked its
interim dividend 8.3 pct to 0.39 pence per share.
"The group has continued to make progress... We are well placed to continue
to deliver an improved performance over the key Christmas trading period," chief
executive Trevor Bish-Jones said.
Woolworths said it will start stocking new toys and other Christmas goods
such as fairy lights, three weeks earlier than usual.
Bish-Jones is anticipating DVDs such as Shrek 2 and Harry Potter and a new
doll called Bratz -- "a sort of a Barbie with attitude" -- made by UK toy
manufacturer Vivid Imaginations, will be flying off its shelves.
The reduction in losses occurred despite a 67 pct surge in capital
expenditure to 39.8 mln stg driven by the refitting of 30 stores into the
so-called 10/10 format and a new till system.
Woolworths, which now has 40 stores trading in the new format, representing
approximately 8 pct of its retail floor space, aims to have 60 such outlets by
the end of the year.
Bish-Jones said it is ultimately aiming to convert up to 400 of its 800
high-street sites.
The company says the refits, which encompass new fascias, brighter interiors
and improved layouts, have provided an immediate 9 pct uplift in sales, though
at an initial cost of 325,000 stg per shop.
Woolworths is to press ahead with the downsizing of its 'big W' out-of-town
stores, and will sell others.
But Bish-Jones failed to say how many of the 21 shops would be sold or how
much the sale was expected to fetch.
"There's been a lot of interest in the estate... At this moment we're
mid-ship, in site-by-site negotiations," he said.
When asked to say if the retailer had seen any evidence of a slowdown in
sales owing to a succession of UK interest rate rises, Bish-Jones sidestepped
the question.
He refused to say if sales had held up in August.
"We're not releasing that. The reason is that we wouldn't want to mislead
the market. You can't read anything out of four or five weeks," Bish-Jones said.
Yesterday the British Retail Consortium said UK sales growth had slowed for
the third month in a row in August to its slowest pace since December.