Lewis's UFO deal beams up the cash
Acquisition of luxury brand gives Lewis a better client balance
Lewis Group's acquisition of cash furniture retailer United Furniture Outlets (UFO) may be one of its best decisions this year. The purchase of the luxury brand has helped Lewis draw in high-income earners and improve the ratio of cash sales to credit sales. Lewis CEO Johan Enslin said on Wednesday, after the retailer reported that its group cash sales had surged, that the plan was "to continue to run that business [UFO] as a cash-only retailer". "We see it as a mechanism to de-risk the business, and the first six months of trade under the Lewis Group have been good. We've seen some encouraging results coming out of UFO," he said. Mark Hodgson, an industrials analyst at Avior Capital Markets, said the acquisition of UFO with its 33 stores bodes well for Lewis. "The numbers [merchandise sales] are obviously higher because of UFO being in the base, but even stripping that out it's still pretty healthy, it's a lot better than it has been previously," Hodgson said. Cash can be king Lewi...
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