How Markus Jooste used rugby – and Steinhoff money – to shoulder his way into Stellenbosch society
- Other companies were slightly bemused when Steinhoff – a holding company without direct exposure to consumers – started sponsoring rugby in Stellenbosch.
- Some think the sponsorship, ultimately at Springbok level, had a lot to do with Markus Jooste's ego.
- Read the full excerpt from the new book "The Stellenbosch Mafia: Inside the Billionaires' Club".
In 2006 the name of Steinhoff International started to appear on rugby jerseys in Stellenbosch. Before too long other companies found themselves pushed out, and Steinhoff was sponsoring rugby at the international level – even though that holding company had no direct exposure to consumers.
For some, this seemed to be more about Steinhoff kingpin Markus Jooste's ego than business, writes Pieter du Toit in his new book "The Stellenbosch Mafia: Inside the Billionaires' Club".
Read the full excerpt from the book below.
How Markus Jooste used rugby sponsorships to muscle into Stellenbosch society.
"When Steinhoff arrived, the town’s culture changed. I asked, 'But who are these people?'" – Jannie Durand, CEO of Remgro.
In early 2008, the Varsity Cup, a South African inter-university rugby competition, was launched with glitz, glamour and a lot of razzmatazz.
Modelled on the successful American football college tradition, it was slated not only to light up dour and depressing post-weekend Mondays with matches between the country’s top university sides, but also to provide a conveyor belt of talent for the Springboks.
Steinhoff International was unveiled as one of the headline sponsors and, soon, its corporate logo – along with that of FNB – was emblazoned across university campuses all over the country.
Steinhoff appeared on branding, on jerseys, on supporters’ T-shirts, on the safety cushions on rugby posts; it was painted on the playing surfaces; it was the brand stamped across the chests of thousands of student supporters at rugby fields from Cape Town to Pretoria; it was everywhere.
Steinhoff had already been sponsoring residence rugby at the University of Stellenbosch since 2006. Every Friday, teams with Steinhoff brands, such as Grafton Everest, Timber City and PG Bison, on their jerseys took to the field. The team representing Wilgenhof, the university residence where Markus Jooste had lived while studying accountancy at Stellenbosch, wore the logo of Gommagomma, the furniture company that was Jooste’s vehicle into Steinhoff.
Besides residence rugby, Steinhoff sponsored a touch-rugby league for female students, and the value of the sponsorship in its first year came to R100 000, which included best-player prizes after every match.
It was an unusual link-up between rugby and the multinational – after all, Steinhoff, as a brand, was new to the university town, whose corporate environment was dominated by companies such as Remgro, PSG, Distell and Mediclinic. And Steinhoff certainly wasn’t a household name.
"I’d wondered why they decided to sponsor rugby, so I asked Jooste and Ben la Grange [then Steinhoff’s chief financial officer] the question. I mean, there’s no product called 'Steinhoff', so what is the point," says Piet Mouton, CEO of the PSG Group. "They said they wanted to market Steinhoff as the employer of choice for young graduates. I thought the answer was flimsy and unbelievable.
"I would have thought that Unitrans, Hi-Fi Corp or any of the other brands would be better to promote."
A senior Stellenbosch businessman, who didn’t want to be named, was puzzled. "Look, Steinhoff wasn’t a brand that appeared on store fronts, so why advertise on rugby poles and sponsor a tournament? I just thought, 'Shit, maybe Jooste just wants people to see.' It was all a bit flash."
Remgro had earlier wanted to get involved with Stellenbosch Rugby Club, the largest of its kind in the world and a jewel in the university’s crown. But they were elbowed out by Jooste and Steinhoff, Durand recalls. "We’d invested in the Stellenbosch Academy of Sport and later on we bought the Stellenbosch United Football Club. We started talking about getting involved in the rugby club, maybe in the form of awarding bursaries … but we were literally kept away from the club by Steinhoff; they were scared of our involvement. It wasn’t out in the open, but everyone knew we [Remgro and Steinhoff] didn’t like each other."
Mouton thinks he knows why Steinhoff wanted to sponsor rugby, first in Stellenbosch, and then nationally. "It was perhaps more about their egos than anything else," he said.
Given subsequent events, it seems like it was more about Jooste’s ego than anyone else’s.
On 15 December 2015, the SARU announced that Steinhoff would be the main sponsor of the Springbok men’s and women’s sevens rugby teams. The men’s team had just won the World Sevens Series, and Jurie Roux, the CEO of SARU and an old friend of Jooste’s from Stellenbosch University’s rugby club, was mighty pleased to get Steinhoff on board.
"From personal experience with the Varsity Cup, I know how effectively Steinhoff International work at leveraging their sponsorships and I am sure the sevens team, our Women Springboks and Sevens Academy will feel the benefit of Steinhoff’s involvement.
"It’s a tribute to the power of the Springbok Sevens brand that we have attracted the attention of such a major international player as Steinhoff," Roux said.
Jooste was equally thrilled: "The Springbok sevens team is a natural progression for Steinhoff in associating ourselves with this fast-paced sport, enthusiastic fans, and leading team [in] the global arena, where most of our businesses are also based. The attention that the sport and event [create] in cities such as Paris, Hong Kong, London, Sydney and Cape Town will enhance our corporate brand in these important retail markets for Steinhoff."
A month later, in Stellenbosch, the Springbok sevens team unveiled their new jerseys, with "Steinhoff" emblazoned on the front.
Up on stage, alongside the president of SARU, Oregan Hoskins, stood a grinning Jooste.
Jooste looked at Remgro and Rupert, and he listened to his friend Mouton and moved Steinhoff’s headquarters to the town. It was a homecoming for Jooste, and symbolic of his success to relocate his company and family from Johannesburg. And he knew what he had to do to gain acceptance, or at least make an impact.
He had always wanted to be part of the Stellenbosch set and he realised the path to instant influence among the elite was rugby. At the Danie Craven Stadium, large advertising boards were erected bearing the words: "Steinhoff: Main sponsor of Maties Rugby." And, now, the Springbok sevens team was also Steinhoff’s. Jooste’s ego was reinforced.
Pieter du Toit is an editor at News24, a sister publication of Business Insider South Africa. Takealot.com is part of Naspers-owned 24.com, as is Business Insider SA.
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