NEW CLICKS HOLDINGS LIMITED
Reg. No. 1996/000645/06
GENERAL UPDATE FROM NEW CLICKS HOLDINGS LIMITED
Heritage Collection
New Clicks Holdings announced the acquisition of Heritage Collection (Hercol)
on 8 December 2000, subject to due diligence. New Clicks Holdings has withdrawn
from the transaction after a comprehensive due diligence investigation as
Hercol did not meet the due diligence criteria as stipulated in the Deed of
Sale. Hercol has disputed our decision to withdraw although they have not
disclosed to us on what basis. We are confident of our case and in order to
expedite the matter we have agreed to an arbitration in May of this year.
Acquiring a catalogue retailer such as Hercol would give a boost to New Clicks'
direct marketing capability by combining its technology and powerful database
with the existing fulfillment capability of another party. This strategy
remains a major objective of the group.
Modisons
On 15 January 2001, New Clicks announced the acquisition of Modisons, a
fledgling discount retailer of branded health and beauty products. Due
diligence has been successfully completed, and we expect Competition Commission
approval by the end of the month. The group will benefit from Modisons'
marketing skills and experience in franchising.
Distribution
We commissioned our new distribution facilities in Johannesburg and Cape Town
in the middle of 2000. We have been increasing the volume that is moving
through these facilities. While the facilities have resulted in increases in
costs and interest during the implementation phase, our results going forward
will reflect significant improvements in efficiencies and lower stock levels.
Some of these benefits are starting to be experienced.
House
On 8 December 2000 we announced the acquisition of House, a 65-store Australian
homeware franchise chain. The integration process is proceeding well and we
are planning rapid expansion of the chain, with store numbers expected to be in
excess of 200 by 2005.
Trading
Trading conditions have been very tough in South Africa as well as in
Australia. This has been reflected in the recent company results in both
countries. New Clicks' current trading performance has been encouraging and if
continued, we would expect relative to the sector, to perform well for the year
to August 2001.
New Clicks Holdings is confident it has the right vision, culture and
strategies in place for continued long-term growth and international expansion
within its core competencies of health, home and beauty.
Results
Results for the half-year to 28 February will be published on 24 April 2001.
Company Secretary
New Clicks Holdings Limited
12 March 2001
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