Lewis shares extend drop

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Johannesburg - Lewis Group, a South African furniture and household goods retailer, is headed for its biggest weekly fall in eight months as bad-debt costs increased and sales declined during the four months through July.

The shares traded 2.3 percent lower at 58.27 rand as of 10:37 a.m in Johannesburg, the fourth consecutive day of declines.

The stock is on track for a 9.7 percent fall for the week, the most since the five-day period ending January 31.

“Protracted strike action, labor unrest, high levels of unemployment and high levels of indebtedness caused consumers to adopt a cautious approach to incurring debt and to be selective in paying accounts,” chief executive Johan Enslin said today in a statement.

Debtor costs for the period increased by 30 percent and merchandise sales declined by 0.8 percent, the Cape Town-based company said.

Shoppers in Africa’s second-biggest economy are cutting down on major purchases and defaulting on loans as more than one in four people remain unemployed and prolonged strikes affect growth.

Steinhoff International increased its stake in furniture retailer JD Group to 98 percent to support the company earlier this year, while African Bank Investments unit Ellerines is applying to be rescued after the lender incurred record losses. - Bloomberg News

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