Steinhoff’s UK brands have announced they have secured a new two-year independent loan which will relieve their reliance on their embattled parent company.
Pepkor, which is chaired by Steinhoff’s former chairman and temporary chief executive Christo Wiese, has announced a two-year independent loan of £180 million from US investment management firm Davidson Kempner.
Although Pepkor runs Poundland and falls under Steinhoff’s umbrella, this loan will reportedly replace the planned investment from Steinhoff at Poundland, Harveys and Bensons for Beds in full.
This move seeks to reassure suppliers of the independence of the three UK retailers, cutting ties as much as possible to the ailing Steinhoff.
Pepkor Europe chief executive Andy Bond said that its European discount retail fascias, including Poundland, Dealz and Pep&Co are all performing well despite their parent company’s woes.
“They are all independent, profitable, delivering positive cash flows,” he said.
“Because of this strength, despite the ongoing issues faced by our parent company, we have been able to work quickly over Christmas to activate new sources of funding that will enable us to reassure suppliers, implement our investment plans and secure the future of these successful businesses.”
Part of this funding has also been set aside for Steinhoff’s other UK subsidiaries Bensons for Beds and Harveys.
Group chief executive for Harveys and Bensons for Beds Stuart Machin said: “Harveys, Bensons for Beds and our manufacturing businesses have always been run independently and for British customers.
“This new finance facility will allow us to continue to build on the progress we’ve made in the last few months.
“We face the new year with new confidence, focused on delivering great customer service and stylish, quality products at great value prices, executing our transformation plan for Harveys and continuing with our plans to manufacture even more of our great products in the UK.”
Yesterday, Steinhoff announced that its accounting irregularities, which have seen its stock prices dive bomb, could reach back as far as 2015 and could add further damage to its reputation and make recovery even more difficult.