Investment case

Lewis Group has extensive experience over many decades of operating as a credit retailer in South Africa’s middle to lower income market and is well-positioned in this growing customer segment. While the current economic and regulatory environments are challenging in the short-term, the following factors should support long-term returns for shareholders.

Strength of the business model

  •  Decentralised customer-focused business model positions the group for market share gains in the changing competitive landscape
  • Focused on one business: retailing of furniture and appliances
  • Operates in a growth segment of the South African population
  • Credit offered across all brands to facilitate sales growth
  • Customer loyalty: Approximately 50% of credit sales from existing customers
  • Low-cost structure; internal culture of cost containment
  • High operating margins through all economic cycles
  • Attractive dividend payout ratio
  • Acquisition of the Beares brand positions the group to service the higher LSM group

Differentiated and exclusive merchandise

  • Stores sell differentiated, exclusive and quality merchandise ranges
  • Products sourced locally and offshore that appeal to needs of lower and middle income target market
  • Focus on selling higher margin furniture and appliance product categories
  • Customers attracted into stores by value for money product offer

Proven credit risk management

  • Extensive experience in managing credit risk in the lower to middle income market
  • Centralised credit approval and granting
  • Decentralised cash collections process at stores
  • Advanced application and behavioural risk scorecards

Experienced management team

  • Stable long-serving executive team
  • Good balance of company and industry experience
  • Leadership continuity from strong senior management


Customer loyalty and trust

  • Customer loyalty: Over 50% of credit sales from existing customers
  • High levels of brand awareness and trust with customers
  • Beares offers exposure to higher income customers than Lewis and Best Home and Electric

Extensive store network

  • National coverage with 645 stores across urban and rural areas in South Africa
  • Exposure to other African countries with 116 stores in Namibia, Botswana, Lesotho and Swaziland
  • Stores conveniently located close to places where target customers live, work and commute

The Investment case should be read together with the Business model and Strategy and targets.