Steinhoff to sell off assets in bid to cut debt pile
Embattled global retailer Steinhoff said today that it will sell off assets in the wake of a $7bn (£5.8bn) accountancy scandal.
In a bid to slash its debt pile, the troubled South African giant revealed plans to slim down into a retail-focused investment holding company.
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Chief executive Louis du Preez told investors that its current debt of over $10bn was “too high”, adding that the firm’s current strategy was its “only way to survive”.
Steinhoff’s management team said it would aim to sell off its non-retail assets and slash jobs at its French furniture chain Conforma as part of an effort to cut its debt.
In March this year the group said an independent report had discovered that the firm overstated profits for several years in a $7.4bn fraud that shocked investors.
A probe by Big Four accountancy firm PricewaterhouseCoopers (PwC) found the company had recorded fictitious or irregular transactions adding up to $7.4bn over a period covering the 2009 and 2017 financial years, a summary of the findings posted on the Steinhoff company website showed.
In July the company reported a €356m (£330m) loss from continuing operations during the first-half of the year, compared with a loss of €392m in the same period in the previous year.
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In its annual report the firm, which owns Mattress Firm in the US, partly blamed the “severely negative” consequences of the financial scandal for its results.
It said that a number of additional factors, such as asset disposals and a wider slowdown within the global economy, dragged on net sales.
Philip Dieperink, the group’s outgoing finance chief, said that a core part of the restructuring would take place in France, confirming the possibility of closures at Conforama.