Overseas Retailing 

	1999 £m	1998 £m	Currency translation effect £m
Sales	152	189
Trading Profit	42.7	47.9	(9.9)
Proportion of Group Trading Profit	7%	11%
Net Assets	133.1	144.8

The South African retail business operates a chain of 438 furniture retail outlets mainly in South Africa, but also with representation in Botswana, Namibia, Lesotho and Swaziland. Trading under the brand name Lewis, the business sells a range of furniture, electronic products and appliances mainly on credit to middle income customers.

Against a background of a very difficult retail environment during which the South African furniture retail industry reported a 5% decline, Lewis increased its sales denominated in Rand by 15% and its trading profit by 9%. Strong promotional activity together with very competitive merchandise offers assisted in achieving these results. However, with the value of the Rand falling by 19% in the year, trading profit, when translated into sterling, showed a fall of 11%.

A new small store concept selling electrical products and trading under the name Best Electric was pilot tested in October 1998. This initiative enables the group to trade in high consumer traffic areas and to benefit from the demand for electrical products as housing and electrification programmes develop in South Africa. Selective expansion of this concept will continue in 1999.

Major upgrades of information technology were undertaken in the last twelve months which will provide greater efficiency in stock and debt management, giving the South African business a competitive advantage.

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