Steinhoff International is a South African international retail holding company that is dual listed in Germany. Steinhoff deals mainly in furniture and household goods, and operates in Europe, Africa, Asia, the United States, Australia and New Zealand.
History
Steinhoff was founded in 1964 by Bruno Steinhoff in Westerstede, Germany. Bruno Steinhoff sourced furniture from communist Europe and sold it in Western Europe. In 1997, Steinhoff acquired 35% of South-Africa-based Gommagomma, preparing for a merger the following year. The company moved its headquarters to South Africa in 1998, attracted by the low production costs, and went public on the Johannesburg Stock Exchange that same year. In 2005, Steinhoff invested £86 million to revive the UK's Homestyle Group, thus taking ownership of the company. In 2011, Steinhoff bought Conforama, Europe's second largest retailer of home furnishings, with over 200 stores in France, Spain, Switzerland, Portugal, Luxembourg, Italy and Croatia, spending $1.2 billion for the acquisition. In December 2015, Steinhoff International moved its primary listing to the Frankfurt Stock Exchange, and founded a new Dutch holding company based in Amsterdam. The management remained in South Africa. In 2015, South African low-end retail investment and holding company Pepkor became a member of the Steinhoff International Group for $5.7 billion. In July 2016, UK discount retail chainPoundland accepted Steinhoff's takeover offer of £597 million which was then increased by Steinhoff to £610 million in August 2016. The takeover received shareholder approval in September 2016. In August 2016, Steinhoff announced its plan to purchase the US-based Mattress Firm for $3.8 billion. In October 2018, Mattress Firm filed for bankruptcy but emerged from Chapter 11 bankruptcy 2 months later after financial restructuring. A$1.9 billion margin loan was provided to Steinhoff by a consortium of lenders, including Japanese bank Nomura and a range of U.S. institutions. Nomura confirmed that it had booked an unrealised loss of 14 billion yen. The loan itself had been partly organised by Steinhoff's Chairman, Christo Wiese. In November 2019, UK chains Bensons for Beds and Harveys and upholstery and bedding manufacturer Relyon were sold by Steinhoff to UK-based private equity group Alteri Investors.
Controversies
On 5 December 2017 the CEO Markus Jooste resigned after the company announced possible accounting irregularities. The share price immediately plunged 66% and went on to fall by over 90% as it emerged that the company had overstated profits and assets by nearly $12 billion. In December 2017, the Standing Committee on Finance of the Parliament of the Republic of South Africa condemned Steinhoff and called for investigations of the company by regulatory bodies including the Financial Services Board and the South African Reserve Bank. A PricewaterhouseCoopers investigation, requested by Steinhoff, reported in March 2019 that "A small group of Steinhoff Group former executives and other non-Steinhoff executives, led by a senior management executive, structured and implemented various transactions over a number of years which had the result of substantially inflating the profit and asset values of the Steinhoff Group over an extended period" and went on to state "it appears that the Steinhoff Group entered into a number of transactions with allegedly independent third party entities which resulted in the inflation of profits and asset values." The report revealed irregular transactions with eight firms not tied to the Steinhoff group from 2009 and 2017 amounted to $7.36 billion. In March 2019 the company share price was still down 96% from its value before the scandal erupted. In September 2019, during a presentation to their investors, the company announced its intentions to sell off non-retail assets and cut jobs at French retail chain Conforma and urgently address its $10 billion debt.
Brands
As of August 2016, Steinhoff held retailing activities in 30 countries, counting 6,500 retail outlets belonging to 40 different brands, and employing about 90,000 employees. 60% of the company's revenue, and two-thirds of its benefits, are made in Europe. Steinhoff expanded into the United States market on 7 August 2016. Steinhoff's South African brands include Ackermans, Buco, Dunns, Flash, HiFi Corp, Incredible Connection, John Craig, Pennypinchers, Pep, Refinery, Russels, Shoe City, Tekkie Town, Timbercity and Unitrans. Powersales is another African Steinhoff brand. In the UK, Steinhoff owns the high street brands Pep&Co, Poundland and Sleepmaster. In Ireland, Steinhoff operates Dealz and Pep&Co. Steinhoff's other European brands include Conforama, Pepco and Poco.
