Lewis group CEO at the time, Alan Smart, insisted that the financial and furniture legs of the business could not and must not operate independently.

Financial services had to subsidise the furniture retail business, he said.

When JD Group announced it was centralising its debt collection, he said that Lewis’s lower middle-class customers were better served by in-store service staff who handled the sale and the debt collection there, in front of the customer. The only part of the process handled centrally is credit approval, making it super-quick.

By building personal relationships with its customers through this strategy Lewis is also building a bridge to the second part of its operation - to identify customers with a good credit record and sell to them again on a number of occasions. Almost 55% of sales turnover is generated from repeat sales.

Lewis has not deviated from this strategy - despite a change in leadership last year. COO Johan Enslin took over the reins unofficially from Smart last January and officially in September when the incumbent retired.

These relationships with customers may be what separates Lewis from the rest as customers now cautiously re-enter the furniture market. A trading update released by Lewis - which has also never diversified from its single brand strategy - reports consistent revenue growth of 7,9% for the nine months to December.

Merchandise sales for the period increased by 7%, but ticked up in the last quarter by 7,3% and 11,7% in December.

In comparison, merchandise sales in the last quarter of 2008 rose by 2%.

Whether the up-tick in December will be sustained into 2010 remains to be seen. However, according to the company, January sales have been "encouraging".

"We had the stock," says CFO Les Davies, "knowing that we could always trim our February orders if December sales were worse than we expected. That played a big role in our success."

The update does not reveal to what extent sales were driven by the opening of new stores. Lewis, which had not participated as energetically as its peers in new store openings, is now playing catch up - at a time when rentals are probably more realistic than they were two to three years ago. At the interim results the company said it intended to grow its 550 stores to 700 - across its three trading brands Lewis Stores, Best Home & Electric and Lifestyle Living - over the next three years. About a third of these will be Lewis’s new small format store, which was designed to give the company access to shoppers in high traffic malls. "These are proving very successful," says Davies, "though finding suitable space is not always easy."

Nedcor Securities analyst Syd Vianello has made minor adjustments (upwards) for the 2010 and 2011 financial years and made a major adjustment for 2012.

"This is a very well run business," he says. "The only thing they need to manage carefully is the debt gearing, which has gone up."

This is very much on management’s minds. "We will probably report higher debtor costs at the year end," says Davies. However, collections have improved. "October, November and December all closed well. In the same period last year, collections from satisfactory’ customers deteriorated, this year they have improved."

Davies does not expect "fireworks" from the results, but is confident that better collection rates suggest that there is some "light at the end of the tunnel".

One move Vianello approves of is the company’s more cautious approach to recognising insurance income. Lewis has increased its provisions to account for extended contract terms. "The result is that recognition of insurance income is spread more equitably over the contract period, with less income recognised in the first year and greater amounts in subsequent periods. This enhances earnings quality."

Competitors Ellerines and JD Group will release trading updates this coming week. Both are likely to show little or no top-line sales growth. It goes to show that there is merit in Lewis’s slow and steady strategy.