Release Date: 28/06/2018 16:30
Code(s): SRR
Wrap Text
Tekkie Town Update

Steinhoff Africa Retail Limited
(Previously K2017221869 (South Africa) Proprietary Limited)
(Incorporated in the Republic of South Africa)
(Registration number: 2017/221869/06)
Share Code: SRR
ISIN: ZAE000247995 (“STAR” or the “Company”)


On Tuesday 25 June 2018, Bernard Mostert, the CEO of Tekkie Town, and other senior members
of management, resigned with immediate effect. In response, STAR immediately deployed an
interim management and support team from various other businesses within STAR, led by Riaan
van Rooyen (currently the Operational Director at Ackermans) to stabilise operations and to
ensure continued trading in Tekkie Town stores.

The background to the events occurring at Tekkie Town, as reported on SENS by STAR on
4 June 2018, appear to arise from a claim lodged by the original founders and shareholders of
Tekkie Town against STAR in respect of an earn-out agreement allegedly reached with
Steinhoff International Holdings N.V. As previously reported, STAR maintains that it is not a party
to any such earn out agreement and further confirms that it has received advice from senior
counsel that there is no reasonable prospect of STAR being held liable in this regard.

Tekkie Town is an important part of STAR, operating 368 stores within STAR’s total retail footprint
of more than 5 100 stores and contributes approximately 3% to STAR’s consolidated annual
revenue. More importantly, Tekkie Town currently employs almost 3 200 people whose
livelihoods depend on the continued operation of the Tekkie Town business and STAR is
determined to protect them.

The interim management and support team has been successful in ensuring that trading in
Tekkie Town stores continues normally. Sales performance to date has not been negatively
impacted despite the exit of the previous senior management team and attempts to disrupt
the business. In addition, contingency plans are in place to ensure that Tekkie Town continues
to operate at full capacity.

A notice of demand to remedy a breach was received from Braam van Huyssteen in respect
of the Tekkie Town head office and distribution premises in George. STAR has contested this

STAR, as a responsible listed company representing strong organisational cultural values which
have stood the test of time, will continue to focus on serving its millions of daily customers and
its 46 000 employees.

CEO Leon Lourens concluded: “Star’s trusted and iconic brands, such as Ackermans and PEP,
are testament to its values and business ethics – a reputation which was built up over many
years in Pepkor. We will stick steadfastly to these ethics and will not entertain any underhanded
tactics from any quarter. STAR will continue to protect the interest of its shareholders and
employees and will vigorously enforce its legal rights in this regard.”

28 June 2018

PSG Capital

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