Excellent Performance In Leadup To Winter

HELLABY HOLDINGS
LIMITED News release, 16 May 2007

Hellaby Shoe Retail Divisions Record Excellent Performance In Leadup To Winter

Hellaby Holdings is pleased to announce that its subsidiaries, No 1 Shoes and Hannahs have recorded excellent total and same store sales growth in the crucial three month period to April 2007.

Total store sales (which include new store openings) rose 14.7% during the quarter to 30 April 2007 and 19.1% for the month of April, when compared with the same periods last year.

Same store sales for the quarter rose 5% when compared with the three months to April 2006. Same store sales for the month of April rose 9.4% from $12.1million to $13.3 million when compared with the same month last year.

The quarter to the end of April is an important period for shoe retailers because it incorporates the end of summer, back to school and the beginning of winter sales. Total store sales (including new store openings) for No 1 Shoes rose 22.5% from $18.3 million to $22.4 million in the three months to 30 April 2007 and same store sales rose by 8.5% for the quarter and 12.2% for the month of April.

Hellaby Holdings managing director David Houldsworth says also contributing to the impressive result were new marketing initiatives and the right product mix. “The start to the winter season has been extremely successful for No 1 Shoes with women’s footwear and Back to School sales rising considerably from the same time last year,” Mr Houldsworth says.

No 1 Shoes managing director Gerard Peterson says: “Women’s knee high and ankle boots have proved to be extremely popular with significant increases recorded in both these categories. This has had a positive impact on gross margins for the quarter.”.No 1 Shoes is continuing its store rollout programme with two more stores opening in the next 5 months, to bring total store numbers to 42. A new No 1 Shoes will open at Lynn Mall in West Auckland on 23 May, while another will open in Westfield mall in Manukau in September 2007. No 1 Shoes is also to relocate its Albany MegaCentre store to the new Westfield mall in Albany City later in 2007.

Hellaby Holding’s other retail subsidiary Hannahs has had an strong start to the winter under the direction of the company’s newly appointed chief executive officer David Gordon. Mr Gordon was appointed CEO of Hannahs in November 2006.

“Our winter stock has been exceptionally well received by customers with sales on our women’s winter stock up by about 20% on the same time last year. April was sensational with record weeks in some cases and May also started well with customers responding well to a new catalogue out last week,” Mr Gordon says. Same store sales for Hannahs during April rose 7.3%, when compared with the same month last year while total sales rose 12.1%.

Other marketing initiatives that have contributed to the result include Hannahs-specific marketing, as opposed to the marketing of individual shoe brands such as Pulp.

“In April, we relaunched the Hannahs brand with the ‘Life’s your Catwalk’ campaign. This has been very well accepted by the public,” Mr Gordon says. “In recent years we haven’t told our customers what Hannahs is about.

We can’t demand that people shop at Hannahs but we can ask that they put us on their shopping list.”

Hannahs new TV marketing campaign featuring two All Black players Rico Gear and Ma’a Nonu for the Back to School season has also translated into positive sales. As previously announced, Hellaby Holdings is currently undertaking a strategic review of No 1 Shoes and Hannahs. The outcome of this review will be provided to shareholders as soon as information becomes available..For further information please contact:

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