Investment case

Lewis Group offers Equity Investors exposure to the full spectrum of South Africa’s furniture retail customer market through it’s well established traditional brands operating in the low to middle income credit market, upper income cash customers through UFO and more recent entry into omni-channel retailing with Inspire.

The following factors motivate an investment case for the Lewis Group and should support long-term returns for shareholders:

Resilient business model in challenging environment

  • Focused on core business of retailing of furniture, home appliances, electronic goods and homewares
  • Decentralised customer–focused business model
  • Positioned to gain market share in the changing competitive landscape
  • Traditional retail brands and our omni-channel business operate in a growth segment of the South African population.

Diversified target market and sales channels
  • Exposure to customers across all income segments in South Africa
  • Lewis and Best home and Electric target low to middle income credit customers
  • INspire offers bedroom linen and small electrical appliances through different retail channels to lower and middle market segments
  • Beares targets middle income credit and cash customers
  • Cash retailer UFO targets the higher income market segment
  • Store base support by INspire omni-channel offering
Expanding retail presence’
  • National coverage with 664 stores across urban and rural areas in South Africa
  • Exposure to other African markets with 120 stores in Namibia, Botswana, Lesotho and eSwatini
  • Omni-channel offering through the INspire brand
  • Expanded into the higher income market segment with the UFO chain (36 stores)
Differentiated and exclusive merchandise
  • Differentiated, exclusive and quality product ranges across all brands
  • Focus on selling higher margin furniture and appliance product categories
  • Products sourced locally and offshore that appeal to the needs of specific income target markets serviced by the group’s brands
Proven credit risk management
  • Credit offered across traditional retail brands and INspire to facilitate sales growth
  • Group has extensive experience in managing credit risk in lower to middle income market
  • Centralised credit approval and granting ensures consistent credit risk management
  • Decentralised cash collections process at stores benefits collection rates
Customer loyalty and engagement
  • Loyal customer base with over 50 % of credit sales from existing customers
  • High levels of brand awareness and trust with customers
  • Traditional retail stores conveniently located close to places where target customers live and work
  • UFO stores located in high footfall areas where high end customers shop