Poundland Owner, Steinhoff International, Plummets 66 Percent In Market Value

South African group, Steinhoff International Holdings NV, took a deep dive in shares after its CEO, Markus Jooste, resigned in the wake of accounting irregularities.

Jooste, who is the owner of the France-based Conforama furniture chain, Mattress Firm in the US and supermarket chain, Poundland, in the UK, announced on Tuesday that he would be stepping down as CEO. The exit prompted the holding company to postpone its full-year results. Steinhoff International has also asked the auditing company PwC to probe the matter.

Steinhoff International’s stock took a beating after the announcement, going down 60 percent Wednesday in Frankfurt. The loss equates to 7 billion euros ($8.3 billion). The shares, listed in South Africa and Germany, did recover 8 percent in market value later on. Back in 2015, the company’s stock closed at 5.075 euros on its first day of trading in Frankfurt, around the time Steinhoff International moved its primary listing from Johannesburg.

The retail giant owns 40 local brands in more than 30 countries, including furniture, homeware, clothing, footwear, and consumer goods. Steinhoff sees about 60 percent of its earnings from Europe and 34 percent from Africa. Besides Poundland and Mattress Firm, Steinhoff International also owns the Bensons for Beds brand in the UK, Pep, and Ackermans in South Africa and Snooze in Australia. Poundland was bought for 55 million pounds in 2015.

Jooste will be replaced by billionaire chairman, Christo Wiese, who is also South Africa’s fourth-richest man and the biggest shareholder in the company. Wiese bought a stake in Steinhoff International in 2014, partnering up with Jooste.

„The trust between Wiese and Jooste is broken, that is why Jooste is out,” claims Syd Vianello, a retail analyst based in Johannesburg.

According to Vianello, Wiese will have to restore the company due to the billionaire’s huge stake in Steinhoff International.

Steinhoff Africa and Shoprite shares fell 29 percent and 6.3 percent respectively. The Africa branch reported that its CEO, Ben la Grange, resigned.

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