Bloomberg News

Woolworths Floor-Space Growth to Accelerate in Second Half

February 17, 2012

(Updates with closing share price in sixth paragraph.)

Feb. 16 (Bloomberg) -- Woolworths Holdings Ltd. plans a “big” acceleration in floor-space growth in the second half of the fiscal year as the South African food and clothing retailer opens its first supermarkets.

“Bringing in the offering of glasses, spoons and clothes along with our food is a no-brainer,” Chief Executive Officer Ian Moir said in a presentation in Johannesburg today. “It breaks my heart when I see a shopping trolley outside our store, while customers are shopping with baskets inside. We plan to change that.” Woolworths will open its first full-line supermarket on April 26 in Johannesburg.

Net income rose to 1.03 billion rand ($131 million) in the six months through Dec. 26 from 775 million rand a year earlier, Cape-Town based Woolworths said in a stock exchange filing today. Sales gained 11 percent to 14.2 billion rand.

The retailer reported a 12 percent increase in food sales in the first half as it raised prices an average of 4.8 percent. Sales of clothing and general merchandise rose 10 percent, as prices increased 7 percent.

The company has converted 50 franchise stores, with a further nine to be converted in the second half. The move has “simplified business in addition to giving more revenue and profit,” Moir said.

Woolworths fell 1.9 percent to 41.70 at the close in Johannesburg, paring the gain this year to 6.9 percent. Shoprite Holdings Ltd., South Africa’s largest supermarket chain, fell 0.5 percent to 132.78 rand, while Truworths International Holdings Ltd., the country’s largest listed clothing retailer, lost 0.9 percent to 78.76 rand.

Woolworths Holdings isn’t related to London-based Woolworths Group Plc, which collapsed in 2008, or Woolworths Ltd., located in Sydney.

--Editors: Tom Lavell, Marthe Fourcade

To contact the reporter on this story: Janice Kew in Johannesburg at jkew4@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net


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