8 annual report 2012  kathmandu execution of this strategy is directly relevant to the same  store sales growth achieved in FY2011 and FY2012.  total inventories, $73.3m at 31 July 2012 increased by 35%  on the previous year. this increase was in line with our  targets, apart from the impact of opening fewer new stores  than planned. also the adjusted summer season delivery  schedule meant levels of goods in transit increased at 31  July by 88% (c. $6m) on the same time last year. on a per  store basis, there was an 11% increase in inventory after  adjusting for these one-off variations. We anticipate that  in the future, our investment in inventory will generally  increase in line with the rate of increase in sales and store  numbers. our primary focus is now on the management  of our inventory range, investing in highest growth product  groups and range planning to match the variation in our  store formats and geographical locations, particularly in australia. to have nine of these stores trading before the end of  2012. these will include our flagship site in pitt Street  Mall, Sydney. During that same period, we will also  complete four major store refurbishments or relocations,  including our new flagship site in Hay Street perth. Given  this development programme, we are confident that by  comparison to FY2012, the rollout of the new stores will  contribute incremental earnings in FY2013. our uK store portfolio is under review, but we remain  committed to maintaining a small retail network to support  the brand in that market. In FY2012, we closed our uK  regional office and warehouse, and integrated management  of the uK business back into the applicable functional  responsibilities of the australasian based Kathmandu  executive team. Costs associated with this re-organisation  had a one-off impact on earnings of c. $1m. Warehousing  and distribution are now being undertaken by a third party  provider. We envisage future sales growth in the uK will  be derived primarily from the online channel. We intend  to support the brand and our long-term emphasis on web  based selling with retail stores merchandised and fitted  out to best present the new brand identity, and located  primarily in london. Where required we will realign our  retail portfolio accordingly. We are committed to continuing re-investment in our  store portfolio, where justified on the basis of both return  on investment and the continuing improvement of our  brand positioning in key markets. In FY2012, we enlarged  our stores in newcastle and Hobart and refurbished our  Victoria Street store in auckland. all of these stores are  in prime Kathmandu markets and locations, and there will  be a number of similar projects undertaken each year,  generally in conjunction with lease renewals. In the first  quarter of FY2013, we refurbished our Highpoint and Knox  City stores in Melbourne, and relocated our nelson store to  larger and more central premises. Store formats will continue to be evaluated and potentially  modified in response to the wider retail and economic  trends, but also in response to local opportunities. In  particular we are confident from our experience in the past  two years that we have a number of new small format  store opportunities in australia which we will now pursue  within our overall network plan.  We completed several major infrastructure projects during  FY2012. Both the new Zealand and australian distribution  centres have been enlarged and will meet our projected  capacity requirements in the medium term. the new  Zealand distribution centre in Christchurch was a design  build project for Kathmandu, and became operational at the  start of FY2013. the lease of our previous site has been  exited. the Melbourne distribution centre had its floor area  increased by one-third following the end of a sublease  arrangement, and the full site will be re-laid prior to this  year’s Christmas sale. these projects will substantially  enhance distribution efficiency going forward. our  Melbourne support office was relocated at the beginning  of 2012. no other major physical projects relating to our  distribution centres or support offices are envisaged for at  least the next two years. We will continuously invest in improved systems to  support business growth. In august 2011, our upgraded  effective and relevant expansion of our product range has  been a core growth strategy since the Company listed  in 2009. During this period, we have increased our total  SKu count by approximately 30%. this range expansion  occurred through expanded product categories with new  styles, additional colours and sizes in existing styles, and  new fabrications or technologies offered. the successful  systems and online product range and inventory infrastructure  uk Business camberwell, Victoria