Steinhoff’s Australasian unit Greenlit to sell merchandise division
The brands affected by the transaction included Best & Less, Harris Scarfe, Postie and Debenhams Australia, which include 322 stores and more than 6,100 employees
Embattled retailer Steinhoff, which is facing the prospect of multibillion-rand lawsuits that could bankrupt it, said on Monday its Australasian unit Greenlit will sell its merchandise division to Allegro Funds for an undisclosed amount.
Steinhoff is in the process of selling off assets to shore up its balance sheet, with the announcement coming days after it said it had sold Blue Group, owner of Bensons for Beds and Harveys Furniture, to specialist investor Alteri Investors for an undisclosed price.
The Greenlit sale includes Best & Less, Harris Scarfe, Postie (New Zealand) and Debenhams Australia, which include 322 stores and more than 6,100 employees, the company said.
The transaction, which is expected to be complete by end-December, forms part of Greenlit’s strategy of refocusing on its household goods division, which includes furniture retail and logistics.
After the transaction, Greenlit Brands will comprise 319 retail stores with more than 3,800 employees across Australia and New Zealand. It will remain a wholly owned Steinhoff subsidiary.
“The sale of Greenlit Brands General Merchandise division is a further step in Steinhoff’s programme of planned divestments, as we continue with our announced strategy of simplifying the group’s portfolio and deleveraging our balance sheet,” said Steinhoff CEO Louis du Preez.
Steinhoff’s share price has lost almost half its value so far in 2019, and is facing the prospect of multibillion-rand lawsuits from aggrieved shareholders, with its share price collapsing since it said in 2017 that it had uncovered about a R10bn hole in its accounts.
Steinhoff’s share price was unchanged at 93c in afternoon trade on Monday.
The market was far more concerned about impending lawsuits against the group and the future of its more significant operations, such as a possible listing of Pepkor Europe, said Protea Capital Management CEO Jean Pierre Verster.
The lack of a share-price reaction to either the Alteri or Greenlit disposals showed this, with Steinhoff not even disclosing the amounts involved, he said.
“They are significant in terms of revenue and number of employees, but in terms of profit contribution, they are very small,” said Verster.