Furniture group Lewis is making a strong play in the bed industry with an aggressive store expansion plan as it aims to take market share from competitors, despite the market being seen as overtraded.
The group, which owns UFO, Beares, Best Home & Electric and Bedzone, bought Real Beds, which CEO Johan Enslin said is a small acquisition, “but a very strategic one at this point in time”.
Real Beds is a cash-only retailer that sells to a wide range of customers. “It’s a deep discounting business model at this point and it’s all about the value offering that the brand brings to consumers,” said Enslin
Lewis had created a new speciality segment that will house Bedzone, Real Bed and UFO, which also sells beds. Bedzone is a premium bedding business for “more aspirational customers, and perfectly suited to open in all shopping centres, inclusive of high end shopping centres as well”, he said.
Bedzone and Real Beds have a combined 32 stores and the plan is to increase that to 150 in the next three to four years.
We are enjoying the benefits of having a very, very big order book
— Johan Enslin, Lewis CEO
According to Statista, the South African bed mattress industry's revenue will amount to $68.36m (about R1.2bn) this year, and it is projected the market will experience an annual growth rate of 5% in five years.
Enslin admitted the base-set market was over-traded with many independent companies. “We strongly believe ... we’re enjoying the benefits of having a very, very big order book, and we also have very special relationships with a lot of suppliers out there, and all of this gives us confidence to actually go out and expand even further, gain market share from other players in this market.”
He said the Bedzone stores that opened in Gauteng more than two years ago were performing in line with expectations, and that also encourages them to take the strategy further. “It’s not going to be easy, but we see this as an opportunity to go and basically strengthen our foothold in the base-set market.”
In the half year to September, Enslin said there was an increase in base-set sales across the business, making it the second biggest merchandise department. He said people were mainly buying necessities such as beds, fridges and stoves, hence the sales contribution from electronics merchandise didn’t perform well.
Enslin said if there was an opportunity for further acquisitions, it would most likely be in the base-set industry.
This week, the 90-year-old business delivered a strong trading and financial performance in a weak retail environment. Enslin said merchandise sales gained momentum over the six months, increasing by 8.5% to R2.4bn, supported by the demand for credit, exclusive merchandise offering and improving consumer confidence.
A strong credit sales growth trend continued as credit sales increased by 16.9%. Cash sales declined by 6.7% to the six months to September. Enslin said there was a small shift in September as cash sales started increasing.
Across the group, cash sales rose 3.7%. He said that in October the trend strengthened significantly, with sales growing north of 15% across the group. “There are two factors: consumer confidence is up, and supporting that confidence to go and spend is money flowing through the economy as a result of two pots.”
Credit sales from April to September accounted for 69.4% of total merchandise sales compared to 64.4% in the first half of the prior year. Account payment plans range from six months to 36 months.
The group’s total revenue, including merchandise sales and other revenue, increased by 13.6% to R4.4bn. In the six months, imports were 37% while 63% was locally-sourced merchandise.
The store footprint was expanded to 897 with the opening of 15 stores across the Lewis [six stores], Best Home & Electric [six stores], Bedzone [two stores] and Beares [one store] brands. UFO store footprint has shrunk over the years as Lewis works on turning about the business. UFO reported an operating profit of R1.5m in the first half of the 2025 financial year, compared to a loss of R9.8m in the prior period.
“We are reconsidering the growth strategy for UFO. We still need a further six months to cement the improved position that we reported before we decide on our plans,” said Enslin.
UFO, which has 39 stores, down from 47, does not offer credit to customers, and this had a negative impact on the business in the past few years as consumers are cash constrained.
With consumer confidence buoyed by lower inflation, interest rate relief, lower fuel and transport costs, as well as the suspension of load-shedding, Lewis expects the recovery in discretionary spending to be slow, and that consumers will remain under pressure in the short to medium term.
“In this environment, consumer demand for credit is expected to remain high and the group will continue to invest in the growth of its debtors book. Management also aims to capitalise on opportunities to acquire well-located trading space to expand the store base,” he said.
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