November 13, 2012
In the competitive furniture sector where consumers’ disposable income is under pressure, Lewis Group is in a position to fight for all available sales this festive season, its CE Johan Enslin said on Monday.
“It will be tough, but as a true-blue retailer, we always prepare well for Christmas. We are carrying more stock than a year ago, and we’ve taken a conscious decision to take control of stock earlier. We’re backing it up with very strong added-value promotions.
“We’ll be distributing 12-million brochures to the homes of potential customers over the next six weeks, we will also be handing out 8-million A4 leaflets at taxi ranks, stations, and bus ranks and we will have a very prominent position on TV as well,” Mr Enslin said.
Lewis Group, which sells furniture to the lower and lower-middle income market, yesterday reported a 10.6% gain in headline earnings per share to 419c. Revenue grew 6.6% to R2.4bn. The company’s interim dividend was increased 23.3% to 212c.
Mr Enslin said the company’s merchandise sales had shown an improving growth trend.
Merchandise sales in the group’s flagship Lewis brand, which accounts for 83% of group sales, increased 6.1%. Its Best Home and Electric division saw sales growth of 8.5%, while My Home advanced 6.8%. Credit sales increased from 73.2% to 75.2% of total sales.
“The overall quality of our debtors’ book has remained stable through an ongoing focus on tight credit granting and collections strategies. This has contributed to debtor costs declining 2.2%, with debtor costs as a percentage of net debtors reducing from 5.1% to 4.6%,” Mr Enslin said.
The group opened 13 new stores in the past six months to bring its store base to 610 — 57 of which are outside South Africa.
The group said it was on track to meet its store opening target of 20-25 stores in this financial year.
Although the majority of South Africa’s retailers have posted solid results over the past year, analysts are concerned the rate of growth is unlikely to continue as consumers start tightening purse strings.