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TWST: If we move on to the non-clothing market, what are the concerns, in your view, that investors have at the moment?

Mr. Blyth: Well, the big stocks there are mainly Boots (BOOT.L) and Kingfisher (KFL.L). And each of those is expected to come under pressure from the so-called Wal-Mart effect, as margins decline and product areas become commoditized. The two companies are completely differently rated. Boots is very lowly rated and Kingfisher is quite highly rated, because Kingfisher also has areas, FDIY and overseas, that Boots doesn’t yet have. So Kingfisher is slightly insulated from the supposed problem areas, but nonetheless it continues to trade well. I think the issue is that with Kingfisher, you shouldn’t overdo the bear points. So we remain buyers of Kingfisher. Boots had faced the problem that no matter how well they do, and they are doing okay at the moment rather than really well – though they’re certainly not doing badly - that no matter how well they do, people will always say, “Well, next time around Wal-Mart will get you,” or words to that effect. It hasn’t happened yet, and we think the fears are overdone. Lastly, the prospects for Boots are not as good as the prospects for Kingfisher. They are on the 10 multiples against 17 for Kingfisher, and we think that that is a fair multiple for Kingfisher, while it is very cheap for Boots. So the non-clothing general retail sector, again after a difficult period during the dot.com boom, I think remains quite attractive.

TWST: Let me just ask you again what you see to be the long term prospects for Boots as prices are coming down?

Mr. Blyth: They have shown over many years that they are able to manage their margins and to go into product categories in which they have an advantage. I think there will be some continued margin erosion in the non-core areas of Boots, and that will probably keep their growth rates lowish, but we are not talking about negative growth or indeed about a problem from Wal-Mart, which is going to be insurmountable. All indications at the moment, certainly in the UK, are that they are not making that big an impact, and even if that were to grow a bit, that Boots could also continue to grow in its chosen markets.

TWST: Do you think the sector can benefit from the Sterling-dollar rate or the interest rate environment at this point?

Mr. Blyth: Traditionally, the sector benefits when interest rates are perceived to be coming down and broadly speaking that continues, although these days, the cycle really seems to have smoothed. So there is not as big of an impact from those sort of changes. Consumer confidence is the crucial bit. Funny enough, that isn’t totally linked to interest rates anymore, but there are beneficiaries if the interest rates were to fall. The pound, though, is important from a supply point of view. The euro change is not much of a problem. Obviously the pound is perceived as being strong relative to the European currencies, but we don’t buy in the euro anyway and so it doesn’t make much of a difference.