Steinhoff Acquires South African Shoe Retailer as Profit Risesby
Company agrees to buy Tekkie Town for undisclosed sum
Full-year profit attributable to shareholders gains 20%
Steinhoff International Holdings NV said it sees further opportunities for growth in its main markets as the acquisitive South African clothing and furniture retailer announced its latest purchase and reported a 20 percent rise in full-year profit.
The company agreed to buy Tekkie Town, a South African shoe retailer with 302 stores, Steinhoff said in a report posted on its website on Wednesday, without disclosing the value of the transaction. The deal is expected to close by the end of the calendar year.
Profit attributable to Steinhoff shareholders rose 20 percent to 1.17 billion euros ($1.32 billion) in the 12 months through June, the company said. The owner of the Conforama and Bensons for Beds chains earned 73 percent of its operating profit in Europe, while Africa accounted for 25 percent and Australasia 2 percent.
“Steinhoff continues to see opportunities for growth within our key markets,” Chief Executive Officer Markus Jooste said in a separate statement. Efforts to integrate the company’s supply chains and reduce costs will help boost profit margins and keep selling prices low, he said.
Steinhoff, which has more than 6,500 stores in 30 countries, is seeking to create a global retail group with a focus on the more affordable end of the market, Chairman Christo Wiese said in an interview last month. The company has had takeover offers accepted this year for Mattress Holding Corp. in the U.S. and the U.K’s Poundland Group Plc. Shareholders in the latter will vote on whether to approve the deal at a meeting on Wednesday.
Steinhoff shares gained 0.8 percent to 5.540 euros as of 9:32 a.m. in Frankfurt, where the company moved its primary listing in December. Steinhoff is registered in Amsterdam, has a corporate office in Stellenbosch, South Africa, and a secondary listing in Johannesburg.
The stock declined 7.5 percent on Aug. 31 after the company reported full-year operating profit below analysts’ estimates.