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| Chris Heiberg | Derek Loudon | Ivan King | ||
| Group Merchandise and Marketing Executive |
General Manager Merchandise |
Merchandising Executive Lifestyle Division |
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Supported by five merchandisers and a logistics manager |
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Merchandising
Merchandising is core to the Group's success. We strive to create a product range that is uniquely Lewis and away from the "sameness" that pervades the industry, providing customers with choice and convenience.
Furniture accounts for 49% of the merchandise, with electrical appliances, audio-visual products and housewares making up the remaining 51%.
A key driver of the merchandising strategy is the strong strategic relationship forged with suppliers. This affords the opportunity to influence design, obtain exclusivity and generally enjoy good margins.
Products are sourced from a wide range of suppliers, with no single manufacturer producing more than 10% of the total purchases.
The supplier partnership strategy extends also to electrical categories where exclusive products are sourced from strong brand players.
In September 2004 the Professional Management Review (PMR) awarded Lewis the PMR Diamond Award as the highest rated retail group, based on a survey by manufacturers and suppliers of electronic and white appliances throughout South Africa.
Imports were positively impacted by the strengthening of the Rand over the past year, which saw the average exchange rate for the financial year improve from R7.06/$ in 2004 to R6.27/$ in 2005.
Products are sourced internationally - mainly from the Far East, Korea and Malaysia - to ensure exclusivity, product differentiation and higher margin. Strong relationships with local agents are key to the success of the import programme. It is necessary to maintain a balance between local and imported products for effective exchange rate risk management and supplier diversification.
The merchandise team has extensive knowledge of the retail furniture and appliance market and keeps abreast of customer needs through surveys and research, ensuring that new product ranges are aligned with market needs.
Merchandisers visit local and international factories and suppliers, as well as international trade fairs, on a regular basis. The Group has an inclusive approach to selecting new ranges and the merchandise team involves senior executives at head office as well as operational management in the process to ensure that new products are accurately targeted to different regions.
Merchandise is delivered directly by the supplier to stores which increases efficiency and reduces the need for distribution centres or warehouses. The management of the supply chain, combined with the merchandising system, leads to optimal low stock levels and rapid delivery times to customers. Stores handle their own deliveries to customers, with an estimated 90% of deliveries being made within 24 hours of the purchase.
Total stock holding at year-end was R160.1 million. An ongoing programme to reduce the level of slow-moving stock in the stores is a fundamental operational procedure. Stock turn has improved from 5.1 to 5.7.