content_image/177239.jpg
the country that still provides our most significant growth opportunity in the short and medium term. We will continue to grow our customer database and enhance the relationship we have with those customers. our customers are a key asset to Kathmandu in the world of multichannel retailing. 

## store network 

the focus on building our brand positioning and customer relationships is linked to the requirement for our store network strategy to adjust to the significant changes that are occurring in retail property as we decide on our best options for new and replacement stores. the key drivers of change are the weaker economic environment and the accelerated growth in online sales. the choices made today on store footprint, location and layout have never been more important. 

ten permanent new stores were opened in FY2012, and total store numbers increased by 13 stores year-on- year. this number was less than we had targeted, but it reflects our caution on site choices as we assessed the environment and our options in store formats in a number of local markets. permanent store numbers totalled 120 as at 31 July: australia 72, new Zealand 42 and uK 6. Stores currently open total 124. 

the permanent new stores opened during the year were: 

australia:  Warnambool, Chatswood*, tamworth, Shellharbour, the rocks (Sydney) and Moorabbin DFo (Melbourne). 

new Zealand:  Coastlands (Wellington), the palms (Christchurch), Willis St* (Wellington) and Masterton. 

*Both these stores are relocations, and the previous store has been converted to an outlet site that will likely become a permanent store. 

the relocation of newmarket and Camberwell stores to new enlarged sites meant the old sites for these stores are being traded temporarily as outlet stores until lease expiry in 2013. our other temporary stores are the central Christchurch store in the post-earthquake re-start retail precinct and Moonee ponds (Melbourne). 

as a result of the combination of the timing of our permanent new store openings in FY2012 and the lesser number opened (10 versus 14 in FY2011) there was a reduction in the earnings (at an eBItDa level) from new stores in FY2012 compared to FY2011. 

In FY2013, we have a substantial number of our annual target of 15 new stores already locked in. ten new store lease agreements have been negotiated and we expect 

<img src='content_image/177239.jpg'>

