Steinhoff has grown from humble beginnings selling cheap furniture into a household goods and general merchandise giant spanning 30 markets.
The business has already pulled off two big acquisitions in the past five years and is now bidding to make it a hat-trick by beating Sainsbury’s to the purchase of Argos owner Home Retail Group.
Retail Week takes a closer look at the rapidly growing South African retailer that is going toe-to-toe with one of Britain’s biggest grocers.
- Furniture and household goods retailer Steinhoff is headquartered in South Africa, but also operates in Europe and Australasia.
- The business was founded in 1964 by Bruno Steinhoff, who began sourcing cheap furniture from Eastern Europe, which he sold on the other side of the Iron Curtain in wealthier Western Europe. Despite being set up in Westerstede, Germany, its head offices were later moved to South Africa.
- Since then, it has grown to become the second largest furniture retailer in the world behind Swedish giant Ikea – the business it used to exclusively supply when it ran factories in South Africa – with a market cap equivalent to £14bn in Frankfurt where it is listed.
- According to a report by Deloitte earlier this month, Steinhoff is the fifth fastest-growing retailer in the world. It recorded a compound annual growth rate of 41.6% from 2009 to 2014.
- That growth has been buoyed by a series of acquisitions, including Austrian chain Kika/Leiner and its rescue of the South African furniture retailer JD Group.
- In 2011, Steinhoff acquired Conforama – a home furnishings retailer with more than 200 stores across France, Spain, Italy, Portugal, Switzerland, Croatia and Luxembourg – in the first of two mega deals that really put the business on the map on the Continent.
- By March 2015 it completed its second mammoth acquisition – the R63bn takeover of Pepkor. At the time, the acquisition was South Africa’s largest ever corporate deal.
- Following that deal, Steinhoff’s biggest shareholder is a family trust of South African billionaire and New Look owner Christo Wiese, who sold the Pepkor discount business.
- The transaction added the Pepco fascia to Steinhoff’s portfolio of 40 brands including Ackermans, Best & Less, Dunns, Kika, Lipo, Poco, Mozi and Shoe City.
- In the UK, Steinhoff owns Harveys Furniture, Bensons for Beds and Cargo, as well as the recently launched Pep & Co discount fashion chain, spearheaded by former Asda boss Andy Bond.
- Its latest full-year figures, for the year ending June 30, 2015, Steinhoff revealed it made an operating profit of R15.31bn (£720.78m) after raking in sales of R134.87bn (£6.35bn).
- According to those results, Steinhoff International operated 6,505 stores across 30 countries at the year end, employing 91,000 workers.
- At that time it had 4,111 general merchandise shops and 2,261 stores selling household goods and furniture.
- But earlier this week, Steinhoff’s South African furniture retail unit JD Group revealed plans to shutter stores and axe 4,110 jobs.