Lewis Group is working hard to turn around its UFO furniture chain, which has been struggling since it was acquired in 2018 for R320 million.CEO Johan Enslin admitted that the division had another tough trading year, even though there was a modest improvement in the second half after new furniture ranges were introduced in October.

The company is focusing on stabilising the business by closing three underperforming stores and planning to shut two more in the next 12 months, rather than expanding aggressively.UFO currently has 38 stores across South Africa.

Management believes the main issue has been furniture ranges not hitting the mark for customers, and they are refining the merchandise offering while increasing marketing efforts with a stronger internal team and new external agency.High interest rates and household debt are making it difficult for the target market to afford big purchases.

Unlike the main Lewis brand, UFO does not provide in-house credit, and the new buy-now-pay-later options have not been popular due to short terms and high payments.In contrast, the rest of the Lewis Group performed well, with traditional brands seeing sales growth of 7.5% to R9.6 billion.Group revenue topped R10 billion for the first time, up 11.1%.The group continues to expand its store network, opening 58 stores this year and planning for about 40 more annually.Credit sales remain important, with the debtors’ book growing solidly.

Enslin is optimistic that with better products and marketing, UFO can improve over the next year, while the group keeps growing its footprint in South Africa and neighbouring countries.