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Lewis bucks the trend of sector decline – The Times

January 22, 2010

Furniture retailer Lewis Group continues to earn solid returns – it released a trading update yesterday showing revenue for the final quarter of last year rising by 7.9%.

December was particularly encouraging, with sales up by 11.7%. For the interim reporting period, growth was up 8%.
Most of the food and clothing retailers have posted increased sales, but they have been below analysts’ expectations.

BoE retailing analyst Shanay Narsi said the Lewis Group had strong sales and a stable debtors’ performance.
“It looks like sales are improving and taking up the slack from lower inflation and financial-service yields,” Narsi said.

Lewis’s target market is less sensitive to interest rates, but more exposed to job losses.
The impact of unemployment on sales has been insignificant.

The group’s customers have a debt-to-disposable-income ratio of 35%, far lower than the South African average.
About 70% of the group’s account base does not have accounts elsewhere.

Real retailing sales declined for the 10th consecutive month in November, by 6.6% year on year, after October’s revised 6.1% decline, according to Statistics SA on Tuesday.