– Clothing	11,2%
– Jewellery	(3,0%)
– Cosmetics	16,9%
– Homewares	18,9%
– Cellphones	(13,4%)

In the current economic climate, the performance of clothing is satisfactory. Whilst the growth in jewellery sales is negative, this performance is acceptable when compared to the market both locally and overseas. Cosmetics has continued to perform well. Homewares has performed adequately in a difficult market. The most disappointing merchandise category is cellphones where we experienced supply issues and remain understocked. With the introduction of a second service provider this stock position should be regularised by mid-November. In addition the procedures relating to RICA (Regulation of Interception of Communications Act) have been challenging to implement.

TRADING DIVISIONS

Notwithstanding the difficult trading environment, all our trading divisions remain in good shape and are well placed to maximise any upturn in the economy.

Retail turnover and growths in the various trading divisions were as follows:

	Number of stores	Retail turnover Rm	% change
@home	78	261,3	18,9
exact!	203	354,4	0,6
Foschini	445	1 629,0	11,0
Jewellery division	359	484,3	(5,0)
Markham	229	644,4	1,4
Sports division	283	699,3	18,7
Total	1 597	4 072,7	7,9

Same store turnover grew by 1,2%, whilst product inflation averaged approximately 8% for the period. Credit sales as a percentage of total sales increased to 63,7% from 63,2%.

Our @home division continued with its expansion, opening seven stores whilst closing one and is now  trading out of 78 stores, 11 of which are the larger @homelivingspace stores. Turnover grew by 18,9% to R261,3 million. Same store turnover reduced by 5,3% in this competitive sector, partly due to planned cannibalisation.

exact! grew its store base by five stores during the period to 203 stores, growing its clothing turnover by 2,3% whilst its cellphone turnover reduced by 6,8%. Clothing same store turnover growth was -4,3% whilst total same store turnover growth was -5,7%. This division is currently being repositioned to provide more fashionable merchandise at more competitive prices.

The Foschini division comprising Foschini, donna-claire, fashíonexpress and Luella increased its store base by 13 stores to 445 stores during the period with turnover of R1 629,0 million. Clothing turnover grew by 13,3% with clothing same store turnover growth of 7,9%. Cosmetics same store turnover grew by 12,8%. Same store turnover of cellphones reduced by 17,4% whilst total same store turnover growth increased by 6,2%. The repositioning and turnaround strategy of Foschini stores itself, which represents 30% of our group’s retail turnover, is proving successful, resulting in far better merchandise selection and store layout. We expect this division to continue improving its performance and to gain market share.

The jewellery division comprising  American Swiss Jewellers, Sterns and Matrix performed above expectation in the current difficult climate. Its store base increased during the period by nine stores to 359 stores with a turnover of R484,3 million. Jewellery merchandise turnover reduced by 3,0% whilst jewellery same store turnover for the period reduced by 6,0%. Cellphone same store turnover reduced by 16,4%. Total same store turnover reduced by 7,6%.

The Markham division increased  its store base by six stores during the period to 229 stores. Clothing turnover for the period grew by 4,0% whilst cellphone turnover reduced by 12,8%. Clothing same store turnover was flat for the period whilst cellphone same store turnover reduced by 16,6%. Total same store turnover reduced by 2,8%. This division was our best performing division last year and is coming off a high base.

The sports division, trading as Totalsports, sportscene and DueSouth traded well in the current climate with turnover growth of 18,7% and same store turnover growth of 7,8%. Its store base was increased by 17 stores during the period to 283 stores with turnover of R699,3 million. This division is actively focused on leveraging World Cup 2010 where we are the partner of choice for several of the major brands.

FG Financial Services – our retail debtors’ book, which amounts to R2,9 billion, increased by 6,4% during the period. The consumer environment remains tough and whilst the contractual performance of the early portion of our book has improved over the previous period, we are experiencing difficulty with collections of the back-end of the book, aggravated by the debt review process. Whilst we had indicated previously that the net bad debt as a percentage of closing debtors’ book would increase to approximately 9,5%, bad debt has been worse than anticipated with this percentage increasing to 9,7%.

RCS GROUP

RCS Group provides a range of broader financial services to both customers of the group, as well as to customers of retailers outside the group. This group consists of two separate business units namely transactional finance and fixed term finance. At present the transactional finance business comprises the RCS general-purpose card and other private label card programmes. The fixed term finance business comprises RCS Personal loans.

The RCS Group which experienced a challenging year last year, performed far better during this period with net profit before tax increasing by 8,8% to R106,0 million. The quality of new business written during the period has improved. Net bad debt as a percentage of the debtors’ book reduced to 12,4% from 12,5% last year.

This division, mainly as a result of the worldwide banking crisis, had to restructure its activities to the level of its funding, as well as consider new sources of funding other than from its shareholders. The availability of new funding is currently being addressed and the expectation is that new funding will be in place during the second half of this financial year, which will allow this division to continue with its growth potential.

Our group’s shareholding in this division is 55% with the balance being held by The Standard Bank of South Africa Limited.

PROSPECTS

Notwithstanding the difficult economic climate, in line with our strategy of investing for long-term growth, we will continue to open new stores in certain of our formats that are under-represented. A further 40 stores are planned to be opened in the second half. Our supply chain initiative which is now well under way will result, over a period of time, in much reduced product lead times, stronger supplier relationships and increased stock turns, ensuring our ability to be first to market with key products.

Retail turnover for the first five weeks of the second half remains difficult with turnover growth of 4,8%. The anticipated pick-up in the economy has not yet started and we expect that the retail environment will continue to be difficult for the remainder of the year. The second half of the year is heavily dependent on Christmas trading which will largely determine the performance of the group in the second half and for the year as a whole.

PREFERENCE DIVIDEND ANNOUNCEMENT

Dividend No. 146 of 3,25% (6,5 cents per share) in respect of the six months ending 31 March 2010 has been declared, payable on Monday, 29 March 2010 to holders of 6,5% preference shares recorded in the books of the company at the close of business on Friday, 26 March 2010.

The last day to trade (“cum” the dividend) in order to participate in the dividend will be Thursday, 18 March 2010. Foschini Limited preference shares will commence trading “ex” the dividend from the commencement of business on Friday, 19 March 2010 and the record date, as indicated, will be Friday, 26 March 2010.

Preference shareholders should take note that share certificates may not be dematerialised or rematerialised during the period Friday, 19 March 2010 to Friday, 26 March 2010, both dates inclusive.

INTERIM ORDINARY DIVIDEND ANNOUNCEMENT

The directors have declared an interim ordinary dividend of 118,0 cents per ordinary share payable on Monday, 11 January 2010 to ordinary shareholders recorded in the books of the company at the close of business on Friday, 8 January 2010.

The last day to trade (“cum” the dividend) in order to participate in the dividend will be Thursday, 31 December 2009. Foschini Limited ordinary shares will commence trading “ex” the dividend from the commencement of business on Monday, 4 January 2010 and the record date, as indicated, will be Friday, 8 January 2010.

Ordinary shareholders should take note that share certificates may not be dematerialised or rematerialised during the period Monday, 4 January 2010 to Friday, 8 January 2010, both dates inclusive.

Certificated ordinary shareholders are reminded that all entitlements to dividends with a value less than R5,00 per certificated shareholder will be aggregated and the proceeds donated to a registered charity of the directors’ choice, in terms of the articles of association of the company.

Signed on behalf of the Board.

D M Nurek	A D Murray
Chairman	CEO
Cape Town
5 November 2009
Executive directors:	A D Murray, R Stein, P S Meiring
Non-executive directors:	D M Nurek (Chairman), Prof F Abrahams, S E Abrahams, W V Cuba, K N Dhlomo, M Lewis, D M Polak, N V Simamane
Company Secretary:	D Sheard
Registered office:	Stanley Lewis Centre, 340 Voortrekker Road, Parow East 7500
Registration number:	1937/009504/06
Share codes:	FOS – FOSP
ISIN:	ZAE000031019 – ZAE000031027
Transfer secretaries:	Computershare Investor Services (Proprietary) Limited,
	Ground Floor, 70 Marshall Street, Johannesburg 2001
Sponsor:	UBS South Africa (Proprietary) Limited