A.S. Watson declared offer for shares of Merchant Retail unconditional in all respects
Merchant Retail board changes and delisting

London (14 July 2005)

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A.S. Watson (P&C UK) Ltd. announced today that the Offer for the entire issued and to be issued ordinary share capital of Merchant Retail Group plc had been declared unconditional in all respects.

Further to the announcement of 5 July 2005 that clearance has been obtained from the UK Office of Fair Trading in relation to the Offer, A.S. Watson, the retail and manufacturing division of Hutchison Whampoa Limited, announces that all conditions of the Offer have now been satisfied or waived. Accordingly the Offer has been declared unconditional in all respects and will remain open for acceptance until further notice.

Merchant Retail Board Changes
Earlier today, Dominic Lai (Executive Director, Hutchison Whampoa Limited), Ian Wade (Group Managing Director, A.S. Watson) and Martin So (Group Finance Director, A.S. Watson) have joined the Merchant Retail Board and Edith Shih (Head Group General Counsel and Company Secretary, Hutchison Whampoa Limited) has been appointed as Company Secretary. Ian Wade has also been appointed Chairman of Merchant Retail.

Delisting and Compulsory Acquisition
As at 3 pm on 13 July 2005, valid acceptances of the Offer have been received in respect of 97,542,863 Merchant Retail Shares, representing approximately 88.2 per cent of the existing issued ordinary share capital of Merchant Retail. Application has been made to the UK Financial Services Authority for the cancellation of the listing of Merchant Retail Shares on the Official List and to the London Stock Exchange for the cancellation of the admission to trading of Merchant Retail Shares on the London Stock Exchange, with each expected to take effect from 11 August 2005, being 20 business days following the date of this announcement.

In addition, if sufficient acceptances are received, A.S. Watson (P&C UK) Ltd. intends in due course to acquire compulsorily any outstanding Merchant Retail Shares to which the Offer relates.

About A.S. Watson
A.S. Watson Group (ASW) is the largest health and beauty retailer in the world. With a history dating back to 1828, ASW has evolved into an international retail and manufacturing corporation with operations in 31 markets worldwide. Today, the Group operates over 6,500 retail stores running the gamut from health & beauty, luxury perfumeries & cosmetics to food, electronics, fine wine and airport retail arms. Also an established player in the beverage industry, ASW provides a full range of beverages from bottled water, fruit juices, soft drinks and tea products to the world's finest wine labels via its international wine wholesaler and distributor. ASW employs over 87,000 staff and is a member of the world renowned Hong Kong-based conglomerate Hutchison Whampoa Limited, which has major interests in ports and related services, telecommunications, property and hotels, retail and manufacturing, and energy and infrastructure with businesses in 52 countries.

About Merchant Retail Group plc
Merchant Retail Group is a specialty perfumery retailer and department stores group, operating in the UK, Ireland, Australia and Jersey. The Merchant Retail Group has two main businesses, The Perfume Shop, and de Gruchy. During the 52-week period ended 26 March 2005, Merchant Retail Group completed the sale of its third business, Joplings, comprising four department stores in the Midlands and North East of England, for gross proceeds of £26.6 million.

The Perfume Shop has 114 branches located in both shopping centres and malls throughout the UK and Ireland and sells a range of branded fragrances. De Gruchy is the leading department store in Jersey, located in St Helier.

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