CEO Interview

Pulling back the curtain on furniture-maker Steinhoff

Steinhoff International Holdings NV Stores As Retailer Sees Europe, Africa Growth
Steinhoff owns dozens of furniture brands. Does it have a handle on how they are run? Source: Bloomberg

Markus Jooste, CEO of German furniture company Steinhoff, admits he doesn’t really have much time for media interviews. “I don’t feel threatened easily,” he joked, “but I found magazine articles never really accurate.” He might be referring to a recent one from German weekly Manager Magazin, which said the company was “built on quicksand” and accused management of operating “on the edge of the law.”

These are accusations that Steinhoff vehemently denies. But then, a lack of transparency makes this German retail giant a rather easy target. Steinhoff might be the world’s second-largest furniture company behind Ikea, but unlike the Swedish giant, Steinhoff owns a dizzying array of 40 subsidiaries and brands spread across 32 countries. It is listed on the stock exchanges of Frankfurt and Johannesburg, South Africa, where its management headquarters have been based for the past two decades. The holding company, Steinhoff International, is based in Amsterdam for tax reasons.

That opaqueness, coupled with potential investigations into balance-sheet manipulation and a high-profile lawsuit, has started to take a toll on the company’s reputation with investors. Steinhoff’s market value in Germany has fallen from about €23 billion in August 2016 to €15 billion today. The mid-cap MDAX on which it is listed in Frankfurt has risen about 30 percent over the same timeframe.

Andreas Riemann, an analyst with Commerzbank, rejects the notion that the company is built on quicksand, but he does say it has a serious image problem: “Steinhoff simply isn’t transparent. More and more investors just don’t want to entrust their money to such a company anymore.” Perhaps that’s why Mr. Jooste, who has been running the company for the past two decades, decided to sit down for a rare interview. Once he gets going, it turns out he has quite a lot to say.

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