June 1, 2010
Johan Enslin – he’s 36 years old. And yet after being in the hot seat for barely a year, Johan Enslin – CEO of household furniture and home appliances group Lewis – has taken the investment community into his confidence and demonstrated he was the right choice to fill the shoes of retail doyen Alan Smart. When delivering his first set of annual results just over a week ago, Enslin didn’t only impress investors with good numbers – given the harsh trading environment – but also outlined an ambitious growth plan for the group, which includes growing Lewis’s store base from the current 548 to 700 over the next three years and improving its debtors book.
While the good results might have been somewhat expected, given Lewis’s positioning in the market, Enslin’s commitment to grow its store base by 45 new outlets in the current year signals the group’s belief the sector has passed the worst of the recession. “We believe we’ve turned the corner. If you look at our merchandise sales growth over the past 12 months – which came in at 6% – our cash collection has really started to improve after our half-year results. So since October last year we’ve really collected good cash for seven months in a row and that also resulted in debtor costs starting to moderate. So we really believe we’re through the worst,” says Enslin.
“Our customers aren’t exposed to bank credit in a big way. Less than 5% of our customers actually have a house or a car financed through a bank.”
As chief operations officer, Enslin was thrust into succeeding Smart, who retired late last year after a rewarding career in the furniture retail industry and who’s largely credited with having built the Lewis chain into what it is today.
Stepping into those big shoes, Enslin is expected to build on that growth story. It’s thus not entirely surprising he’s already taken the bull by the horns. After all, he’s been strategically prepared for the position.
“I was privileged to have worked with Smart. He played an instrumental role in developing me and I was really flattered to be the person who actually got the opportunity to take over from him,” says Enslin.
Born in Humansdorp in 1974, a small farming town in the coastal part of the Eastern Cape, Enslin calls himself a “true-blue retailer”. He joined the Lewis group in 1993 as a salesman on the store floor in Kimberly, straight after matric. Over the years he climbed the ladder within the group, demonstrating his capabilities and eventually landing the top position.
Though admitting he’s always been ambitious, Enslin says his appointment came a little earlier than he’d anticipated. At the time he was appointed CEO designate in November 2008 he was 34. “You can never decline an opportunity to lead a company as great as this. It’s a one-off lifetime opportunity.”
Growing up in Gauteng and the Northern Cape, Enslin played his fair share of rugby, was an athlete and won several colours for his provinces. He has always been a very focused individual who knew from a young age what he wanted from life. “I think I developed into a leader quite early in my life: being captain of several sports, being head boy. When I was young, I wanted to become an attorney, but as I grew older I got interested in business and saw this sales position as an opportunity to get a foot in the door.”
Throughout the recession Lewis generally fared well compared with its peers. And the group remains a favourite among investors. Enslin isn’t surprised at that suggestion and shares his winning formula. “It all comes down to our business model. We have a customer-centric business model, focusing on retaining customers on our books. We encourage customers to come in and pay their accounts at the store. We don’t get people to sign debit orders. We want to see our customers and build relationships with them. It’s that personal relationship with the customer that makes us different,” says Enslin.
“We don’t collect cash out of a call centre. Stores do the collections, because they’re located where the customer is. They know the customer quite well and can be sympathetic if the customer is having some financial difficulties. Life isn’t easy: people have problems – and you’ve got to understand that. And because of that we build tremendous loyalty.”
That might sound old fashioned but it works very well. “Fifty-five percent of our business is done with repeat customers. People come to us because there’s personal service.”
Another advantage is that Lewis is largely a single brand group with the flagship chain contributing almost 85% of the group’s revenue. But Enslin throws cold water at that suggestion, saying while being a single brand has some marketing benefits, relevant merchandise and good pricing are what ultimately trigger consumers to buy.
Lewis has the best merchandising team who scour the world for best innovative products and value, he says. “Some of these guys have got the talent to actually design the merchandise and take it to a supplier to make it for us.” Currently, Lewis directly imports 25% of its merchandise.
And what of Enslin’s management style? He prefers a hands-on approach. “I like to lead from the front. I don’t like to sit behind my desk. The rolling up of sleeves is a very integral part of our company’s culture. As CEO it’s vital to know what’s going on in all your stores, otherwise you can’t make informed decisions. That’s one of my strengths. I grew up in this business: started as a salesman, branch manager, regional, divisional, general manager – so I saw all of that. If a branch manager discusses his frustrations with me, I can relate to that because I did that job. It’s not something I read in an American textbook that doesn’t apply to SA. It’s real experience.”
That’s the operational side. What about his team?
“I believe it’s the people around you who make you strong. You need to those people carefully. You need to deal with them with integrity, dignity and respect. And you need to motivate them to go the extra mile – not for you, but with you. I think that also speaks to my leadership style. I surround myself with strong people and as a team we deliver good results. So it’s not about me. It’s about all the good people I’ve worked with. I’ve been with the group for almost 17 years working with a lot of different people, and I’ve been privileged to touch their lives in the way they’ve also touched mine. This is about the team: it’s not about Johan Enslin.”
While mapping out a growth strategy for the group, Enslin has also had to rebrand its Lifestyle Living outlets – a small division contributing 3% to group revenue – into My Home following its ongoing lack of profitability.
“We’re now changing the entire furniture range – the whole merchandise offering in those stores – to attract a customer who will make use of credit facilities; traditional, but a little bit more inspirational than what you can get in our stores at Lewis.”