Steinhoff Targets Ikea Share in European Furniture ExpansionJanice Kew
Steinhoff International Holdings Ltd., the South African owner of France’s Conforama furniture chain, plans to further expand in Europe after rising sales in the region helped increase full-year profit by 38 percent.
The company is under-represented in Germany, Eastern Europe and the Benelux countries, Chief Executive Officer Markus Jooste said in an interview yesterday in Johannesburg. Further growth could boost its share in continental Europe to 10 percent from 6 percent, he said, potentially eating into the lead held by Ikea of Sweden AB.
“Our focus will remain with the European Union,” Jooste said at the company’s headquarters. “There are still lots of gaps in our market share in the bigger countries, so we are busy all the time looking for what is available.”
Steinhoff, which also has operations in the U.K. and the Pacific Rim, has been expanding in Europe as retailers in South Africa struggle amid strikes, rising inflation and unemployment of more than 25 percent. The company said in June it’s seeking a listing on the Frankfurt Stock Exchange to increase exposure to investors on the continent. European sales accounted for 63 percent of the total in the year ending June 30, compared with 26 percent in Southern Africa.
Steinhoff declined 0.2 percent to 52.62 rand at the close in Johannesburg, following yesterday’s 4.4 percent gain. That values the company at 129.4 billion rand ($11.82 billion). The stock has advanced 18 percent this year, compared with an 11 percent gain on the FTSE/JSE Africa All-Share Index.
Steinhoff’s South African retailer JD Group Ltd. reported a full-year loss and halted its dividend on Sept. 8 as more customers failed to meet payment deadlines.
The company will return to profit in the year ending June 2015, Jooste said. Having agreed to sell its consumer finance unit, JD Group will focus on sales and may close some stores and increase the size of others, he said.
Steinhoff net income was 10.1 billion rand for the 12 months through June, compared with 7.3 billion rand a year earlier, the Johannesburg-based company said in a statement yesterday. Sales advanced 20 percent to 117.4 billion rand, including a 25 percent gain in continental Europe.
Steinhoff raised its full-year dividend by 88 percent to
1.50 rand per share.