North West Company Fund Announces Higher Fourth Quarter Earnings and Distribution Increase

Market Wire, March, 2008

North West Company Fund (the "Fund") (TSX: NWF.UN) today reported 2007 fourth quarter earnings of $18.9 million for the period ended January 31, 2008, an increase of 15.7% over last year. The Fund also announces an increase in the regular quarterly distribution of 18.5% to $0.32 per unit to unitholders of record on March 31, 2008, distributable by April 15, 2008.

Report to Unitholders

The North West Company Fund reports fourth quarter earnings to January 31, 2008 of $18.9 million, an increase of 15.7% over last year's fourth quarter earnings of $16.3 million. Diluted earnings per unit improved to $0.39 compared to $0.34 last year. The quarter had 92 days of operations compared to 95 days last year as a result of changing the year end to January 31 and adopting a fixed calendar quarter end.

Sales increased 21.1% to $318.0 million compared to the fourth quarter last year. On an equivalent three month basis, sales increased 24.3% and were up 8.5% on a same store basis excluding the foreign exchange impact of a stronger Canadian dollar. Sales from new stores, including the acquisition of Cost-U-Less, Inc. on December 13, 2007, and strong general merchandise sales growth in northern Canada were the leading factors contributing to the sales increase in the quarter.

The Trustees have approved an increase in the quarterly distribution of 18.5% to $0.32 per unit to unitholders of record on March 31, 2008.

"This was a very good quarter for North West with excellent sales from both our Canadian and International divisions. With our recent acquisition of Cost-U-Less, we now have another source for growth that complements our core strength as a local neighbourhood and remote market retailer," commented North West President & CEO Edward Kennedy.

Management's Discussion & Analysis

CONSOLIDATED RESULTS

Quarter

Fourth quarter consolidated sales increased 21.1% to $318.0 million compared to $262.5 million in 2006 and were up 23.3% excluding the foreign exchange impact of a stronger Canadian dollar. The quarter had 92 days of operations compared to 95 days last year as a result of changing the year end to January 31 and adopting a fixed calendar quarter end. On an equivalent three month basis, sales increased 24.3% and were up 8.5% on a same store basis excluding the foreign exchange impact. Food sales increased 19.4% and were up 4.9% on a same store basis excluding the foreign exchange impact. General merchandise sales increased by 28.3% as a result of new stores and strong sales growth in northern Canada and were up 16.7% on a same store basis excluding the foreign exchange impact.

On December 13, 2007, the Fund acquired through its U.S. subsidiary all of the issued and outstanding shares of Cost-U-Less, Inc. (CUL), a leading operator of 12 mid-size warehouse format stores in remote island communities in Hawaii, the South Pacific and the Caribbean. The acquisition of Cost-U-Less, Inc. is a strong strategic fit with the Company's positioning as a leading retailer in remote markets and is expected to leverage both the Company's and CUL's specialized capabilities in merchandising and supply chain management. The results of CUL are included in the consolidated financial statements of the Fund from December 13, 2007 forward.

Cost of sales, selling and administrative expenses increased 21.2% to $286.5 million and increased 5 basis points as a percentage to sales compared to the fourth quarter of 2006. New and non-comparable store expenses accounted for approximately 88% of the increase. Continuing cost pressures related to recruitment and retention of store employees in Canada and higher freight and energy related costs were partially offset by higher sales, higher staff productivity and lower debt loss expense in Canada.

Trading profit(1) or net earnings before interest, income taxes, depreciation and amortization (EBITDA) increased 20.5% to $31.5 million compared to $26.1 million in the fourth quarter last year. On an equivalent three month basis trading profit increased 26.7% and was up 10.6% excluding CUL and non-comparable adjustments in the International operations. Comparable store sales growth and financial service revenue gains were the leading factors contributing to the trading profit dollar increase, offsetting lower gross profit rates and higher expenses in the quarter. Interest expense increased 35.7% to $2.5 million as a result of higher average debt levels in the quarter in part due to additional borrowings to fund the CUL acquisition. Income taxes increased $1.6 million to $2.8 million with approximately 50% of the increase due to higher earnings in the International operations. The increase in Canadian taxes is due to a decrease in future tax assets as a result of a reduction in substantially enacted tax rates and other net tax provision adjustments. In 2008, the annualized effective tax rate is estimated to be approximately 8% to 10% depending on the blend of earnings between Canada and International.

(1) See Non GAAP Measures Section of Management's Discussion & Analysis