Lewis continued its good run by reporting a solid set of interim results. Many retailers have botched acquisition deals and, in particular, offshore strategies have largely failed. However, Lewis’s acquisition of local business United Furniture Outlets (UFO) two years ago has worked in its favour. With the backdrop of constrained consumer spending, the group generated double-digit growth for the six months ended September, in large part due to the investment in UFO. 

Lewis’s strategy to diversify across market segments is bearing fruit. The purchase of UFO, a cash business, has enhanced the cash/credit sales mix for Lewis, thus reducing the group’s overall risk rating. UFO has broadened the customer base by catering to the higher end of the LSM spectrum, while the Lewis and Beares brands cater to the mid to lower end. Plans are afoot to increase UFO outlets to 70 from about 40 within three to four years. There is a shortage of exposure to the Western Cape...

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