Johannesburg - Lewis Group has received regulatory and competition approvals for the acquisition of 20 Ellerines and Beares stores in Botswana, and 10 in Lesotho.
The furniture retailer, which has been battling tough economic conditions, made this announcement on Monday. It noted the acquisition comes after its November announcement that it intended buying 62 Ellerines and Beares stores in southern Africa for about R250 million. This effectively doubled the group’s African store footprint.
Last November, the company reported a 13 percent drop in first-half profit, which it blamed on a struggling mining sector and the worst drought on record.
The mining sector in SA has been hit by low global metal prices and power shortages that have led to shaft closures and job losses. The country is also in the grip of a drought that has seen crop output fall sharply.
Headline earnings per share - the main profit measure that strips out certain one-off items - fell to 323 cents in the six months ended September 30 from 373 cents a year earlier.
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CEO Johan Enslin says the acquisition of Ellerines and Beares stores in Botswana and Lesotho will enable Lewis to expand and diversify its southern African footprint.
“We are not only gaining access to new segments of the furniture retail market but also expanding our existing customer base in each of these countries.”
The stores in Lesotho have been seamlessly integrated into the group’s operations while the Botswana stores will commence trading in the Lewis stable from early March 2016.
Competition approvals are still awaited on the 21 stores purchased in Namibia and six in Swaziland.
Lewis was one of the first local retailers to expand into neighbouring southern African countries in the late 1960s. Prior to these acquisitions, the group had 62 stores in these four countries.
“Once all these stores are fully operational they are expected to make a meaningful contribution to the group,” says Enslin.
Lewis Group purchased the Beares brand and 61 stores in South Africa in November 2014 after parent company Ellerines Furnishers was placed under business rescue.
Enslin says the Beares chain has since been expanded to 84 stores in South Africa and enabled the group to attract customers in higher income segments than its traditional target market. “The addition of the Beares stores in southern Africa will further improve our buying power and bring immediate scale benefits,” he says.
Lewis dates its history back to 1934 and has 716 stores across all metropolitan areas.
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