corporate services

group property and development

Store location strategy is key to trading performance. Lewis outlets are generally situated in main streets and town centres, with some presence in shopping centres. The Best Electric model is ideally suited for shopping areas with higher footfall, while Lifestyle Living stores are located in urban shopping malls.

The group property and development team is responsible for the administration of the property portfolio, negotiating lease agreements and renewals, sourcing new sites, managing store openings and refurbishments, co-ordinating store security and handling lease administration.

As the core business is furniture retailing and not property ownership, we have adopted a policy of leasing premises and currently occupy over 440 rented sites across the country.

Sourcing new locations is ongoing and the property team will continue to locate new sites and assist in managing the store expansions nationally.

	Lewis	Best Electric	Lifestyle Living	Total
Stores at 31/3/05:	400	58	17	475
– opened	6	14	3	23
– closed	4	–	4	8
Balance at 31/3/06	402	72	16	490

The group opened 23 new stores during the year, nine of which were in the Gauteng area.

information and communication technology

The information technology team is tasked with leveraging technology in the most cost-efficient manner to support the group's strategy. The main focus during the year was building further enhancements into the technology platform to improve service to branches, while creating infrastructure to ensure that all head office, branch and disaster recovery systems are resilient to external factors.

The Lewis Group has invested heavily since 1998 to create a technology platform that is up to date, stable, low cost and scaleable. The key investment areas are detailed below:

Credit management technology

Transact, an automated credit application processing system, was introduced in 1998 to enable online bureau enquiries and facilitate the introduction of both the first application scorecard developed by Experian and the application of centralised credit policies. While the Lewis Group utilises the international expertise of Experian in the development and maintenance of risk scorecards and strategies where necessary, the Lewis Group also maintains the required experience and technical skills internally to maintain, adapt and improve the application of credit management systems.

Customer relationship management technology

In 2003, the Lewis Group introduced an Experian-developed customer management system called “Stratagem”. The system is used for behavioural scoring, credit limit management, marketing and collections. Subsequent to the implementation of Stratagem, the first behavioural scorecard was adopted in mid-2003. Stratagem forms part of the monthly account management process and enables customers to be segmented at multiple levels. It also allows for a combination of customer management strategies to be applied to each customer. The system is not a modular-based system and additional scoring modules and actions can easily be added into the workflow without requiring any additional systems development or costs.

Branch computer systems

The Lewis Group's in-store financial transactions operate on a transaction processing point-of-sale system. Most transactions are initiated in the store environment and the system automatically updates, on a daily basis via satellite, both the debtor and inventory databases that are located at both store and head office levels. The system also has strict change controls over finance charge rates, minimum deposit percentages, insurance and maintenance premiums. All changes have to be verified by the Lewis Group finance and IT executives and no changes can be made at branch level.

Intranet technology

The Lewis Communication System (LCS), an intranet-based system which links head office with the branch network, was expanded during the year. LCS provides an online product knowledge training and assessment facility in addition to enabling easy communication between branches and head office. It also facilitates several automated functions which eliminates administrative costs.

Outsourced services

While the group has an in-house management team, the maintenance of the software portfolio is outsourced to systems developers from Universal Computer Services (UCS). Maintenance of the branch network is outsourced to Unisys and open-source Linux software is used in stores.

Disaster recovery

The Lewis Group operates a distributed network that allows branches to operate independently of each other and head office. However, the credit vetting process for new applications requires real time connectivity to the credit bureau, which is achieved through Transact. To prevent downtime, an off-site disaster recovery server for the Transact system has been set up. This disaster recovery site connects to the branch satellite network infrastructure and the credit bureau independently of the live environment. The whole Transact system is replicated at the disaster recovery site on a daily basis and can be activated within minutes of a disaster. Furthermore, a diesel-powered generator has been installed at head office to ensure that key systems are not put at risk.