Strug­gling – for now

Finweek English Edition - - MARKET PLACE -

The Woolies* re­sults were very dis­ap­point­ing, as in­di­cated by its trad­ing up­date from Jan­uary. HEPS was down 4.3% while the div­i­dend was kept at 133c. Coun­try Road con­tin­ues to strug­gle and lo­cally the re­tailer is also be­ing hurt by the new en­trants into our mar­ket. For­tu­nately, un­like other cloth­ing re­tail­ers, it has a strong food divi­sion. Wool­worths also has Aus­tralia, with that divi­sion mak­ing up al­most 40% of sales. Sev­eral peo­ple have asked me whether the great days are over for the re­tailer – and if we should sell. My an­swer is no. I have held the stock for over a decade and was buy­ing late last year as the price fell. More im­por­tantly, while busi­ness is cur­rently very tough for Wool­worths, this will pass and boom times will re­turn. This re­tailer has great brands and man­age­ment – part of be­ing a long-term in­vestor is stay­ing the course even when things are tough. How­ever, there is one pro­viso: you must be­lieve the tough times will pass, and I do.

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