Retail giant Steinhoff International Holdings NV, which owns American mattress brand Sleepy's and a string of chains across Europe, said its chief executive has resigned amid an investigation into accounting irregularities.
Shares in the company plunged more than 50% on Wednesday after it disclosed Markus Jooste's departure, halving the value of a company that had been worth more than $14 billion the day before.
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Steinhoff, once dubbed "Africa's IKEA," has in recent years expanded aggressively outside of its home market of South Africa with acquisitions in the U.S. and U.K. Earlier this year, it spun off its African retail business entirely.
Despite its African roots, Steinhoff has grown into one of the world's biggest furniture holding companies. Last year, it made its first foray into the U.S., agreeing to pay $2.4 billion for Sleepy's owner Mattress Firm Holding Corp. The company also acquired British discount retailer Poundland Group PLC in 2016 for GBP597 million ($716 million).
On Wednesday, Steinhoff said it had approached accountancy firm PwC to conduct an independent investigation in light of what it said was new information relating to accounting irregularities. It didn't detail any specific issues. The company had been expected to release its results for the year ended Sept. 30 on Wednesday, but said it would now publish results when it was in a position to do so.
Steinhoff has appointed Chairman Christo Wiese, one of South Africa's richest men, as executive chairman on an interim basis, and said he would conduct a detailed review of the business.
Steinhoff had doubled down on Africa when it bought discount clothing retailer Pepkor in 2015 for about $5.7 billion at the time. Pepkor's Africa operations and Steinhoff's other African retail businesses now form Steinhoff Africa Retail Ltd., or STAR.
Steinhoff moved its primary listing to Frankfurt in late 2015, following the likes of other South African corporate giants, like Anglo American PLC and luxury-goods giant Cie. Financière Richemont SA, which have also relocated their primary listings to other financial capitals. Those companies all retain a secondary listing on the Johannesburg Stock Exchange.
The majority of Steinhoff's business is in Europe, where it sells furniture and bedding through a number of brands, from Germany and Switzerland to Poland and Bulgaria. It also has operations in Australia.
The move to Germany was a sort of homecoming for the company, founded by Bruno Steinhoff, who started his business in 1964, selling cheap furniture from West Germany to East Germans. The fall of the Berlin Wall in 1989 put Mr. Steinhoff in a position to tap the growing consumer class in Eastern Europe. In 1997, the family acquired a stake in a South African furniture company, listing the combined entity on the Johannesburg Stock Exchange in 1998 under the Steinhoff name.
Oliver Griffin contributed to this article
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(END) Dow Jones Newswires
December 06, 2017 05:05 ET (10:05 GMT)