Saturday , June 19 2021

UPDATE 1-South Africa Lewis H1 earns profit on optimism sales growth

(Adds Sales Details, CEO Quotes)

South African retail chain Lewis Group Ltd reported Wednesday's 10.7-percent rise in semi-annual profits on Wednesday, thanks to the strong growth in commodity exchanges and the early benefits of diversification strategy.

The furniture and appliance provider, who is calling for medium and low-income consumers, said the six-month-end earnings per share (HEPS) rose to 180.8 cents in 163.3 cents in September.

The main EPS is the main profit meter in South Africa that removes certain disposable items.

The merchant advocate expands market segments and retail channels to reach consumers with higher incomes and attracted online buyers.

Brand sales were boosted by a recent acquisition of United Furniture Outlets (ULO), up 25.9 percent to $ 1.6 billion ($ 113.63 million).

The UFO contributed $ 230 million in sales for six months after successful brand integration in the group.

Last year, Lewis acquired the UFO, a luxury retailer of luxury home furniture, to change its target market, and approach higher-income users, and boost the mix to sell money.

Sales of cash accounted for 43 percent of total sales, compared to 31 percent in the previous period, he said.

The launch of the omnichannel INspire this year marks the entry of a group into the domestic retail chain with extensive product offerings over bedding, kitchen utensils, crockery, tableware and small electrical appliances.

After slower than expected, INspire reported sales of 4.2 million for four months ending in September, the company said.

"Our strategy is to attract customers to the LSM category of 4 to 8 categories to expand the presence of the group in urban areas," said chief executive officer Johan Enslin in the INspire report.

LSM is the way to segment the South African market. Categorizes people according to their standard of living, with 10 being the highest and 1 lowest.

More retail sales in South Africa are investing heavily on the network – the market where trades are exchanged with retail and wholesale stores at online retailers.

The share of online purchases in total retail sales in South Africa is still floating by about 1 percent. However, certain obstacles such as lack of Internet access are withdrawn, while online customers are attracted to a more convenient form of purchase.

$ 1 = 14.0808 rand
Reporting Nqobile Dread, Edited by Sherry Jacob-Phillips

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