Things have taken a turn for the worse at Steinhoff Africa Retail (Star).
A month after Tekkie Town founder Braam van Huyssteen was pushed out of the management team and resigned as chairman of the group’s property division, senior managers, including the CEO Bernard Mostert, the COO, other top management and staff in the STAR specialty fashion and footwear business have walked out.
Van Huysteen warned at the time of his own resignation that the turnaround he claimed to have affected in the loss-making speciality division would not be sustained if the management team followed him out the door.
“I hope we get resolution before this gets out of hand,” van Huyssteen said at the time.
Things appear to have gotten out of hand on Monday night when the managers walked out. STAR says in a statement it will be business as usual as it rejigs its management structure to deal with the leadership vacuum left in the division.
Star owns a host of South African retail brands including Pep and Ackermans as well as a contested 100% of Tekkie Town, which was moved to it (as part of a massive restructuring) from Steinhoff. Problems emerged when the share price of Steinhoff, through which the Tekkie Town team was incentivised despite the company being shifted to STAR, collapsed in the midst of a governance crisis in December. At the time of his departure, Van Huyssteen who won SA’s entrepreneur of the year title in 2011, described STAR management as hostile and said it was impossible to work in the environment that had been created.
STAR operates more than 5,000 stores across multiple brands, including PEP and Tekkie Town, in 12 countries in Sub-Saharan Africa.
STAR’s Specialty division, boosted by the inclusion of Tekkie Town, contributed R14.5bn - about a quarter of the R58.6bn in group revenue - in the year to 30 September 2017.
In the results, management described the contribution to the group as “robust” thanks to the performance from the clothing, footwear and home retail brands which include Incredible Connection, Sleepmasters, clothing chain John Craig and Shoe City.
However, the Specialty division contributes just 7% of group operating profit.
Star issued a statement on the resignations and the future of the division: "Star regrets to advise the resignation of Bernard Mostert, the CEO of Tekkie Town, and certain other senior members of management, with immediate effect. In consequence of this, an interim management team led by Riaan van Rooyen (currently the operational director at Ackermans) has been deployed. Tekkie Town is an important part of Star and further support will be provided to Tekkie Town, as required, through Star's extensive operational capability. Tekkie Town will continue operating business as usual.”
Bruce Whitfield is a multi-platform award winning financial journalist and broadcaster.
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