South Africa's Steinhoff Claws Back From Cliff's Edge: QuickTake
Steinhoff Bonds Tumble on Moody's Cut to Junk
It could wind up being South Africa’s version of the Enron accounting scandal. Furniture retailer Steinhoff International Holdings NV captivated investors by growing into a global force, latterly under its former chairman, billionaire Christo Wiese. Now it’s drawing attention for all the wrong reasons. Shares in Steinhoff crashed 80 percent in two days after the company reported accounting irregularities. Chief Executive Officer Markus Jooste resigned, closely followed by Wiese, and the company is looking for ways to quickly raise funds while seeking leniency from its creditors.
The company had been a go-to choice for investors seeking a balance between developing and emerging markets. Its share price tripled between early 2012 and end-2016 as it expanded in the U.S. and Europe from a base in South Africa. It owns retail chains including Conforama in France, Poundland in the U.K. and Mattress Firm in the U.S., which encompasses the stores formerly known as Sleepy’s. Reflecting the global deal-making, the company has at least 200 subsidiaries and affiliates. It’s Amsterdam-registered and listed in Frankfurt and Johannesburg. Wiese and Jooste, meantime, are among the best-known members of a close-knit group of wealthy South African businessmen who own or have owned properties in the exclusive winelands around Cape Town.