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financial and operational review: corporate services
Information and communications technology
In line with the group’s business model, a balance is maintained between centralised head office systems and decentralised systems to support administrative and decision-making processes at stores.
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 are located at store and head office levels.
Lewis 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 is in operation. 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. A generator has been installed at head office to ensure that key systems are maintained.
Substantial progress has been made in improving the effectiveness and resilience of the technology platform both in stores and in the group’s central data centres over the past year, including:
- Strengthening the group’s off-site data recovery facility.
- Expanding the self-generating electricity at head office to counteract power outages.
- Rolling out a new telephone system to stores.
- Installing new Microsoft-based terminals in-store to enhance work quality.
- Improving printing facilities to reduce the distribution of pre-printed materials.
Electronic catalogue cubicles were installed in all stores with interactive touch-screen capability to assist customers and allow sales staff to provide better service at the point-of-sale.
Over half of the central systems operating in the group’s data centre were upgraded. This will limit downtime on these critical servers and enhance efficiency by reducing the number of servers, despite the ever increasing volume of data.
Both the central credit management and branch systems were upgraded for the implementation of the National Credit Act in June.
Lewis operates on a stable satellite network within South Africa and during the year extended satellite connectivity to the branches in Lesotho, Botswana and Swaziland. The terrestrial network servicing Namibia was also upgraded. These changes have improved systems functionality while reducing the amount of downtime historically experienced in these territories.
Group property and development
| Best | Lifestyle | |||
| Lewis | Electric | Living | Total | |
| Stores at start of financial year | 410 | 79 | 19 | 508 |
| Opened | 11 | 8 | 3 | 22 |
| Closed | 4 | – | 1 | 5 |
| Stores at year-end | 417 | 87 | 21 | 525 |
| Stores relocated | 4 | – | – | 4 |
| Stores refurbished | 23 | – | 6 | 29 |
The group has continued to expand its store base despite the more challenging trading environment experienced in the second half of the year. 22 new stores were opened while 4 stores were relocated to improved trading sites.
Store location is key to trading performance and the three retail chains in the group have distinctive trading formats and store siting strategies:
- Lewis outlets are generally situated in main streets and town centres, with some presence in shopping centres. Eleven new stores were opened.
- Best Electric stores adopt a smaller format with high trading densities, and are generally located in shopping areas with higher footfall.
- Lifestyle Living’s stores are still predominantly in shopping centres.
The group’s property procurement and development is managed centrally to maximise operational efficiencies. The majority of premises are leased and the group currently occupies 479 rented sites in Southern Africa.
The costs of upgrading and maintenance of stores are controlled through the use of dedicated upgrading teams and contractual relationships with BEE partners.
Security measures are continually being reassessed. All stores are fitted with alarm systems and roller shutters to secure premises in higher risk areas.
Most of the group’s stores are equipped with drop safes and security contractors handle cash-in-transit. The impact of crime on the group is well within manageable levels.