London — The Steinhoff International Holdings is assessing ways to attract extra funding for Mattress Firm to execute a turnaround of the troubled US bedding retailer.

Bought for $3.8bn two years ago, Mattress
Firm has emerged as a
headache for Steinhoff as it strives to shore up liquidity following an
accounting scandal. The 3,300-store chain expanded too aggressively,
suffered from ineffective marketing, and has been embroiled in a dispute
with suppliers, Steinhoff said in a presentation to creditors in London
on Thursday.
Steinhoff bought Mattress Firm towards the end of an acquisition
spree that preceded the uncovering of accounting irregularities in
December, which wiped almost 95% off the share price. It secured an
agreement with lenders over the restructuring of almost €10bn of debt in
July, buying it time to stabilise an empire that also includes
Conforama in France and Pepkor Europe.
Mattress Firm needs “incremental liquidity” for its recovery
to be secured and management, led by CEO Steve Stagner, is considering
ways to access capital, Steinhoff said. Stagner has worked at Mattress
Firm since 1996, and, in March, returned to the CEO job he held for six
years up to 2016. Mattress Firm has hired restructuring advisers
including AlixPartners and Guggenheim Securities, along with law firm
Sidley Austin.
Tempur Sealy ended its supply agreement with the bedding retailer in
2017 after Mattress Firm demanded significant concessions following the
Steinhoff takeover. Tempur Sealy has since sued the retailer for
allegedly “selling confusingly similar products under the ‘Therapedic’
name.”
Steinhoff shares declined 5.5% as of 12.33 p.m. in Frankfurt, where
the company moved the primary listing from Johannesburg in 2015.
Pepkor growth
The first of two meetings with lenders on Thursday is scheduled to
last for almost three and a half hours and includes presentations from
the management of all Steinhoff’s major chains. Pepkor Europe, led by
former Walmart executive Andy Bond, demonstrated a healthier financial
position than its US sister company, with earnings growth across brands
such as Eastern Europe-focused Pepco and the UK’s Poundland. The company
is targeting more than 4,000 stores within five years, compared with
2,281 now.
Earlier on Thursday, Poundland said it would take over 20 stores
formerly owned by its near namesake Poundworld, which went bust earlier
this year.
More than 90% of the creditors across units Steinhoff Europe,
Steinhoff Finance Holding and Stripes US have now agreed to the debt
restructuring. The company plans to kick off a so-called company
voluntary arrangement in the UK for the Steinhoff Europe unit on October
19. It also completed the refinancing of the real estate unit
Hemisphere, extending the maturity of €775m of loans to December 2021.
Bloomberg
No comments:
Post a Comment